Members' Research Service By / October 28, 2022

Energy policy in the national recovery and resilience plans

The European Union (EU) has a shared competence in some areas of energy policy, notably: ensuring the functioning of the energy market; ensuring security of energy supply in the Union; promoting energy efficiency and savings and the development of new and renewable forms of energy; and promoting the interconnection of energy networks.

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Written by Alessandro D’Alfonso.

The European Union (EU) has an energy strategy focused on providing households and businesses with secure, sustainable, competitive and affordable energy. This will require a major transformation of Europe’s energy system as well as massive investment. Alongside national funding, various EU instruments contribute to the financing of energy policy, which is central to efforts to decarbonise the European economy under the European Green Deal.

The Recovery and Resilience Facility (RRF), the EU’s ground-breaking recovery instrument, created to counter the impact of the pandemic crisis, is a new and important source of funding for the policy area, since it includes investment and reform in the areas of energy efficiency, clean power and energy networks. The national recovery and resilience plans (NRRPs), through which the RRF is implemented, have a strong focus on energy, investing €88.49 billion (17.9 % of their resources) in the policy area.

The energy dimension of the NRRPs varies across the Member States, depending on factors such as their specific challenges, priorities and preferences in green spending, and size of the plans. One criticism that has emerged is that the plans could have done more to develop cross-border projects. In any case, other significant sources of public and private financing will be required to meet the major investment needs of the policy area.

The REPowerEU plan, designed to end the EU’s dependence on Russian fossil fuels and accelerate the green transition, has increased these needs. The European Parliament, a strong advocate for a common energy policy and a key player in scrutiny of RRF implementation, has stressed the need to enhance the RRF contribution to mitigating the consequences of the Russian invasion of Ukraine. The European Parliament and the Council are currently examining a European Commission proposal to finance additional investment and reform in the field of energy. It would introduce new REPowerEU chapters to the NRRPs, using sums still available for RRF loans, some fresh resources and voluntary transfers from other EU instruments. The REPowerEU chapters should enhance the already important contribution that the RRF is making to financing energy investment and reform.

Read the complete briefing on ‘Energy policy in the national recovery and resilience plans‘ in the Think Tank pages of the European Parliament.

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