European Electricity Review 2026

In 2025, the EU took an enormous step forward towards a clean power system backed by wind and solar. For the first time, wind and solar produced more electricity than fossil fuels in the EU. Homegrown renewables remained nearly half of EU power, as record-breaking solar worked in tandem with wind.

In 2025, the EU’s energy priorities focused on cutting energy costs for households and businesses. The European Commission’s Affordable Energy Action Plan correctly diagnoses the root cause of Europe’s high energy prices: its dependence on costly imported fossil fuels. In the power sector, coal is nearly on its way out, reaching a new historic low in 2025 after years of steep decline. However, the EU is still significantly dependent on gas. An increase in gas generation amid a decline in hydro in 2025 pushed up the EU’s fossil gas import bill by 16% and led to price spikes in electricity markets.

The stakes of the EU continuing to make progress on energy transition remain starkly clear. For the EU, risks of energy blackmail from fossil fuel exporters loomed large in 2025. Investing in homegrown renewables is a key strategy to lower that risk, as geopolitics continue to destabilise. 

The EU agreed on legislation to ban imports of Russian gas by the end of 2027 in December 2025. However, new fossil dependencies have emerged with a rise in imported US LNG. Heavy reliance on a single supplier threatens EU security and weakens bargaining power in geopolitical negotiations and trade disputes.

Expanding batteries, enhancing the grid and scaling up demand flexibility can unlock greater shares of solar and wind in the mix. Not only will this improve security, they are also crucial to ensure predictable and stable prices.