EU Energy Policy: Implications for Renewable Energy Investments

Europe is currently facing a number of issues related to energy: climate change and decarbonisation; slow improvements in energy efficiency and the challenges posed by a higher share of renewable energy. The European Union is trying to address these challenges through various policies aimed at achieving full EU decarbonisation by 2050. Renewable energy contributes to the reduction of greenhouse gas emissions; and therefore, investments in renewable energy generation are seen as a tool to decarbonise the EU. However, this puts strong pressure on countries that rely on fossil fuels to switch to cleaner energy sources. This paper examines the business characteristics of three EU energy companies from the former Eastern Bloc: their production mix, their past efforts and their future plans in terms of investment in renewable energy sources. The question is how they can achieve the EU energy policy targets. The results show that the production mix of energy companies plays an important role in their adaptation to EU requirements. Not all energy companies will succeed in meeting decarbonisation targets within the deadlines set by the EU, as national economic interests could be a limiting factor. Finally, renewable energy sources alone are not sufficient to ensure a secure energy supply, but must be combined with each other or with nuclear power or gas.