Source - EC Affordable Energy Action Plan (COM-2025-79)
Communication from the Commission: Action Plan for Affordable Energy — Unlocking the True Value of Our Energy Union (Secure, Affordable, Efficient and Sustainable Electricity for All). COM/2025/79, published 26 February 2025. A non-legislative Commission communication setting out the EU’s strategy to bring down energy bills for households and industry, with flexibility as a central lever.
Document metadata
- Title: Affordable Energy Action Plan (AEAP)
- COM reference: COM/2025/79
- Published: 26 February 2025
- Raw file:
Raw/Clippings/EUR-Lex - 52025DC0079 - EN.md - Part of: Electricity Market Design Reform 2024
Context
Released as the first major Commission initiative under the new (2024) Commission mandate, the AEAP responds to continued high energy costs and positions flexibility as essential for lowering both wholesale and retail prices. The document was developed in parallel with the Commission’s 2025 Streamlining report on capacity mechanisms (COM/2025/65).
Key quantified claims
The AEAP makes several notable quantified claims about the economic value of flexibility:
| Claim | Figure | Source cited in document |
|---|---|---|
| Flexibility savings on grid costs by 2030 | EUR 26 billion | Commission analysis |
| Annual avoided peak generation capacity cost | EUR 2.7 billion/year | Commission analysis |
| Wholesale price reduction potential from demand flexibility | up to 40% (price reduction during peaks) | Commission analysis |
| Consumer savings from flexible retail contracts | 12–42% reduction in electricity bills | Various member state studies |
These figures have not been independently verified via the full source text (the document was too large to read in full; figures extracted via keyword search). They should be treated as indicative Commission estimates pending verification against the full document.
Structure and key themes
Pillar 1: Completing the internal energy market
- Full implementation of EMD Reform 2024 rules (Regulation 2024/1747 and Directive 2024/1711)
- Faster grid permitting and smarter grid connections
- Strengthening ACER cross-border oversight
- LNG price benchmark reform (REMIT)
Pillar 2: Boosting flexibility and demand response
This is the pillar most relevant to the wiki.
The Commission explicitly identifies flexibility as a key tool to reduce bills, with the EUR 26B grid cost savings estimate as the headline number. Key actions:
- Retail flexibility guidance (non-binding, Q1 2026): Commission will issue guidance to member states on how to remunerate flexibility providers in retail contracts — directly addressing the barrier that flexible retail contracts are complex and uncommon. This is a direct follow-up to Art. 19g/h of Regulation 2024/1747.
- Demand response and storage barriers: removing remaining obstacles to demand-side response and storage at the retail level
- Flexibility Needs Assessment implementation: monitoring FNA completion by member states under Art. 19e Regulation 2024/1747
- Smart meter rollout acceleration: connected to demand response potential
Pillar 3: Affordable investment finance
- Long-term contracts (PPAs, CfDs) to reduce price volatility for industry
- Access to EU funding mechanisms (Innovation Fund, CEF)
- Industrial PPA facilitation
Pillar 4: Consumer protection and empowerment
- Energy sharing rollout (member state implementation of Art. 15a Directive 2024/1711)
- Dynamic pricing expansion
- Vulnerable consumer protection
Flexibility guidance (Q1 2026)
The most concrete near-term action is the Commission’s commitment to issue non-binding guidance on remunerating flexibility in retail contracts by end of 2025 / Q1 2026. This would advise member states on:
- How to design retail tariffs that reward consumers for shifting load
- Template contract structures for flexible supply agreements
- How fixed-price contracts can coexist with demand response participation (as required by Art. 11(1b) of Directive 2024/1711)
The guidance is non-binding — member states are not required to follow it — but it signals Commission expectations and will shape regulatory pressure on national authorities including Ei.
Capacity mechanism streamlining
COM/2025/79 was released alongside COM/2025/65 (the streamlining report on capacity mechanisms). The AEAP references the Commission’s request to ACER to amend the ERAA (European Resource Adequacy Assessment) methodology to simplify capacity mechanism approval processes. The Clean Industrial Deal State Aid Framework (CISAF) proposals are also connected.
Relevance to wiki topics
- Flexibility: quantified EUR 26B grid savings and 40% wholesale price reduction claims provide an economic frame for the value of flexibility at EU scale
- Demand Response: retail guidance (Q1 2026) will be the key near-term policy output on flexible retail contracts
- Flexibility Need Assessment: the AEAP monitors implementation of Art. 19e FNA obligation; Q1 2026 guidance will elaborate member state obligations
- Power Purchase Agreement: PPAs highlighted as key tool for industrial competitiveness and price certainty under Pillar 3
- Electricity Market Design Reform 2024: the AEAP is the first major Commission implementation document for the 2024 reform
- Balancing Markets: wholesale price reduction potential from demand flexibility contextualises balancing market design