Expanding EU energy market integration is key for EU decarbonisation and global competitiveness

ACER kicks off its 2025 Monitoring Report series with key insights into the EU energy markets, highlighting major developments in 2024, and examining the interplay between gas and electricity markets in the energy transition.

What are the key findings?

The report highlights progress towards Europe’s transition to clean energy, persistent challenges (such as high and volatile energy prices for European consumers and businesses), and how to address them. It sets out ACER’s recommendations on how Europe can unlock a clean, secure and competitive energy future.

• 2024 recorded the lowest energy prices since 2021, but with noticeable regional differences. Gas prices averaged 34 €/MWh and electricity averaged 81 €/MWh. The surge in negative and very low prices in 2023 intensified in 2024.
• Energy market prices remained volatile (but less extreme than during the crisis), driven by gas supply risks and renewables’ variability. Frequent swings in electricity prices (within a day) persist – on 70% of days, electricity price variations within the day reached 50€ or higher. Electricity price swings reveal a need for more short-term flexibility.
• Renewables grew significantly, accounting for 35% of power generation. Solar power confirmed its leading role in the energy transition whilst nuclear and hydro came back.
• Europe’s clean energy transition faces persistent challenges. Gas supply risks and unpredictable weather later in the year kept market prices volatile. In December, a ‘dunkelflaute’ episode in Germany sent electricity prices to nearly 1,000 €/MWh (far above the 81 €/MWh annual average). 
• Gas as a flexibility provider. Fossil fuels, especially gas and coal, remain essential for meeting peak electricity demand.

ACER’s recommendations to address these challenges:

For decarbonisation and global competitiveness, Europe must place renewed effort on further expanding EU energy market integration, enhancing energy efficiency, and driving power grid innovation:

• Target new transition cost drivers: Network costs are at risk of doubling by 2050. Enhancing grid capacity (rather than new build) is part of the solution. Better network tariffs and 'efficiency first' incentives to prevent stranded assets play an important role. Ensure capacity, flexibility, and renewables remain affordable while securing long-term supply.
• Harness energy efficiency and flexibility: Use demand response, electric vehicles (EVs), and batteries to balance supply and demand, cut price swings, and strengthen grid resilience, especially at peak times.
• Expand energy market integration: Support cross-border renewable use for flexibility and security. Strengthen interconnections to cut fossil fuel reliance and build trust in Europe’s energy markets.

Looking ahead 

In its 2025 Monitoring Report series, ACER will continue to pave the way for a clean, secure and competitive energy future by shedding light on:

• strengthened cross-border cooperation;
• energy transition monitoring; and
• efficient grid investment.

Upcoming reports:

• ACER's Monitoring Report on removing barriers to demand response (to be published here on 8 April).
• ACER’s report on EU electricity tariff practices (coming on 26 March).