The push for cheaper electricity in Europe will depend on accelerating the energy transition while introducing targeted short-term measures, according to analysis by Andreas Poullikkas.

The professor of energy systems at Frederick University and former chairman of the Cyprus Energy Regulatory Authority recently assessed the conclusions of the European Council adopted on March 19, 2026 regarding competitiveness and the single market.

“The battle for cheaper electricity now clearly passes through the energy transition but also through immediate interventions in costs,” he said.

He explained that the recognition by European leaders that price spikes in imported fossil fuels are not accidental but represent a structural risk sends a strong political signal.

“More renewables, storage, interconnections and domestic clean production are prerequisites for strategic autonomy and permanently lower electricity prices,” he explained.

At the same time, European leaders acknowledge that consumers and businesses cannot wait for the long-term benefits of the transition.

“Targeted short-term solutions are necessary due to pressure from industry and households,” Poullikkas said.

He added that this pressure is particularly intense in countries and sectors facing the risk of deindustrialisation and relocation of production outside Europe.

The ongoing crisis in the Middle East is already feeding into energy prices and acting as an accelerator, he noted.

“The European Council is calling for an immediate toolbox of temporary measures to address increases in the cost of imported fuels,” he stated.

He added that the proposed measures also extend to all components of electricity pricing, from fuel costs to regulated charges.

Poullikkas highlighted the importance of planned intervention in the EU Emissions Trading System.

“The European Commission has been asked to revise the emissions trading system by July 2026 to reduce carbon price volatility and its impact on electricity tariffs,” he pointed out.

He explained that this reflects a delicate balance between maintaining the role of carbon pricing as a driver of green investment and innovation, and limiting excessive volatility.

“Extreme volatility can harm competitiveness and disrupt supply chains,” he said.

According to Poullikkas, this opens a broader discussion on how climate neutrality ambitions can be combined with the European Union’s industrial policy.

He also pointed to the planned introduction of an ambitious package for electricity grids.

“Without strong and interconnected grids, cheap and clean energy will remain theoretical,” he mentioned.

He added that faster permitting, increased investment in resilience and stronger interconnections are essential for a functioning single electricity market.

This would allow consumers to benefit from renewable energy wherever it is abundantly available, such as in regions with strong wind or solar resources.

For Cyprus, the emphasis on interconnections and the acceleration of the Energy Union 2030 programme is directly linked to major infrastructure projects and the gradual reduction of dependence on expensive imported fuels.

Poullikkas also stressed the importance of what was not decided at the European Council meeting.

“The existing target model of the wholesale electricity market, based on marginal pricing, remains essentially unchanged,” he said.

He noted that despite strong pressure from some member states, recent discussions about revising the electricity market design did not lead to a formal mandate to review the model.

This reflects the position of the industry, as outlined in a letter sent on February 26, 2026 by Eurelectric to EU leaders.

“Any intervention in the price formation mechanism will not actually reduce the cost of energy for consumers but will shift it to other charges or subsidies,” the organisation stated.

Instead, the focus of the debate has shifted towards reducing taxes and levies on electricity bills.

“There is greater consensus around reducing taxes and charges on electricity,” Poullikkas said.

He noted that electricity taxes in the EU are on average three times higher than those applied to natural gas.

“The revision of the energy taxation framework is expected to align with climate neutrality goals and international competitiveness,” he said.

He added that this is likely to be one of the next concrete steps taken by the European Commission.

Summarising the political direction, Poullikkas further mentioned that energy policy is no longer treated as a purely technical issue.

“Energy policy is now at the core of European competitiveness,” he stated.

He explained that with the mandate given to the European Commission to propose measures on electricity prices, reform tools such as the emissions trading system and implement the Energy Union 2030 programme, attention now shifts to concrete proposals.

“The outcome will determine whether the EU can deliver clean, reliable and affordable electricity without sacrificing its industrial base,” he concluded.