Electricity tariffs remain a growing concern across Europe, with the European Commission now outlining seven targeted actions aimed at easing costs for households and businesses while strengthening the competitiveness of European industry, according to Andreas Poullikkas, an energy systems expert and former chairman of the Cyprus Energy Regulatory Authority (CERA).

Poullikkas said the central objective of the package is to narrow Europe’s widening gap with the United States and Asia, while continuing the green transition.

He noted that industrial electricity prices in Europe remain “two to three times higher than in the US and significantly higher than in China and Southeast Asia”, a cost difference that is increasingly prompting industries to consider relocating outside the EU in search of cheaper energy.

For countries such as Cyprus, Poullikkas explained, where electricity tariffs remain above the EU average and the market is small and relatively isolated, the situation places considerable pressure on households and weighs on the competitiveness of businesses.

Against this backdrop, he said, the European Commission is activating seven interconnected policy axes.

In this context, Member States are being urged to make full use of the new State aid framework (CISAF), which allows enhanced support for energy-intensive industries.

This, he mentioned, can take the form of interventions in energy costs as well as subsidies for their decarbonisation by 2030.

At the same time, the Commission is facilitating the mobilisation of untapped resources from the Cohesion Funds towards energy networks and storage infrastructure, through revised national programmes and technical support from its services.

Alongside this, Poullikkas pointed to the Commission’s support for the further development of bilateral power purchase agreements (PPAs), placing emphasis on long-term contracts between renewable energy producers and industrial consumers.

In this regard, he said, a €500 million pilot programme has already been launched in cooperation with the European Investment Bank to reduce the financial risk of such contracts and enhance access to cheaper renewable energy.

Further efforts are also focused on accelerating permitting procedures for renewable energy sources, storage and grid projects, building on the revised renewable energy directive, while additional simplification measures are being announced.

Moreover, emphasis is placed on strengthening cross-border interconnections and national grids, so that electricity can be efficiently channelled to areas with high demand and elevated prices.

The “energy corridors” initiative, he explained, targets eight critical bottlenecks, including improved interconnection of the Iberian Peninsula with France, reinforcement of energy supply in the Balkans and South-Eastern Europe, and the gradual lifting of Cyprus’ electricity isolation through new interconnections with mainland Europe.

Cyprus’ electricity interconnection, Poullikkas stressed, is of strategic importance, as it is expected to reduce costs, strengthen security of supply and enable the country’s full integration into the Energy Union.

In parallel, he said, the Commission is promoting further diversification of natural gas suppliers through a joint demand-side mechanism for countries in the region, alongside cooperation with partners such as the United States, Norway and Qatar, with the aim of achieving more competitive prices and enhanced energy security.

Attention is also turning to energy taxation, which in some cases can account for up to one third of the final electricity bill.

According to Poullikkas, the EU is preparing recommendations for targeted tax cuts, focusing on energy-intensive industries and vulnerable consumers, so that interventions deliver an immediate and measurable impact.

Based on the Commission’s estimates, he said, the package of measures could generate savings of around €45 billion as early as 2026, rising to more than €130 billion per year by 2030 and accumulating a total benefit of €2.5 trillion by 2040.

Ultimately, Poullikkas emphasised that the effectiveness of these interventions will depend largely on the speed and quality of implementation at national level.

He explained that if Cyprus and its Eastern Mediterranean neighbours make timely use of available European tools, financial resources, state aid rules, PPAs and tax arrangements, they can strengthen the resilience and competitiveness of their economies.

Otherwise, he warned, there is a risk that the expected benefits will be delayed and prove insufficient relative to the pace of developments in international energy markets.