In2022,thewarbrokeoutinUkrainewithmassiveimpacts.Consumerswereheavilyimpactedbythecrisis+14,5%+76%€646bnEU-27mediumRetailpricesfornewEUgovernments'fundingtohouseholds’billscontractsincapitalcitiesshieldhouseholds&firms2021-20222021-2022Source:Eurostat,HEPI,BruegelEnergy-intensivessawtheirproductiondecreaseDomesticproductiondropvs2015100=2015level110Wood,paper,printing105andreproduction100Chemicals,pharmaceutical95productsandpreparations9085Non-metallic80mineralproducts7-2019Metalandfabricatedmetalproducts,exceptmachinery5-2020andequipment3-20211-202211-202235-45%EUaluminium,zinc,andsilicontakenoffline,withriskofpermanentsmelterclosures,in2022.Source:Eurostat(2019-2023),EurometauxOil&gascompaniesreapedhugeprofits2022195bnOil&gas53bn+268%profit2017-2021avgPowerutilities2022+25%profit15bn12bn2017-2021avgFiguresrepresenttheaverageprofitsmadebythe5largestoil&gascompaniesandutilities(EDFandUniperlossesexcluded)Source:EurelectricbasedonannualreportsofthecompaniesUtilitiesfacedliquiditycrunchduetohugecollateralneedsMarginingexposureforEuropeanutilities6050(€Bn)40Energypricesshotup30€148bn20Creditlinesfrom10governmentstoutilitiestomeetliquidityneeds0H120212021HI20222020Source:ScopeRating,BruegelPoliticalinterventionshinderedpowermarkets-53%0ActivityontheIberianforwardPracticallynoactivityonRomanianmarketin2022vs.2021forwardmarketafteremergency-75%ordinanceinAugust2022UtilityPPAcapacitysigned-59%in2022vs.2021Windfinalinvestmentdecisions(FIDs)in2022vs2021Source:Eurelectric,EFETbasedonEEXandOPCOM,PexaparkforPPAfigureYetgassavingssurpassedexpectations-15%gasreductionthresholdFinlandChangeinnaturalgasconsumptionLithuania(Aug2022-Jan2023vs2017-Jul2022)Sweden-19%EstoniaLatvia-60%-40%-20%0%20%40%60%80%NetherlandsLuxembourgBulgariaCroatiaGreeceDenmarkHungaryRomaniaAustriaGermanyCzechiaEU-27ItalyBelgiumFrancePortugalSloveniaPolandSpainIrelandTurkeySlovakiaMaltaNorway-80%Source:NRG_CB_GASMEurostatToday,weseesignsofrelieffromthecrisisGaspricesfall,electricitywholesalepricesfollow250Day-aheadelectricitypricesvsgasprices227200140132120150100€/MWh10010180504647,810060344014,69,640,909,6202019202020212022Averagegasprice(Eur/MWh)02023YTDAverageDay-aheadelectricityprice(Eur/MWh)Electricitypricesfollowedmarketfundamentals.Althoughstillhigherthanin2019,pricesfallingsinceautumn2022.Source:Eurelectric,ENTSO-ETPforelectricityprices,investing.comforthegaspricesRetailpricesstarteddecliningHouseholdretailpriceindex(newcontractsincapitalcities)300250-34%200IndexPoints150100500JanAprJulOctJanAprJulOctJanAprJuly202120222023YTDAveragepricein2023howeverstill58%higherthanin2021.Source:Eurelectric,HEPIPowersector'semissionintensityreacheslowestlevelevergCO2/kWh396239245200020212022Jan-Aug-45%since20002087102023Jan-Aug2030Carbon-neutralaround2040Source:Eurelectric'sElda(2021,2022,2023),Eurostat(2000).,ALLBNKscenarioofEC’s2030ClimateTargetPlanImpactAssessment(2030)Electrificationratemusttripleby2050OverallelectrificationrateinEU-27(%)8022.8%7060201720192021202620302040205050HistoricaldataFF55-inspiredscenario4030201002015HistoricaltrendRadicalActionscenarioSource:EurelectricEurostat(2000-2021)&Eurelectric’sdecarbonisationscenarios(2023)Theurgencyison.1.Weneedtostrengthensecurityofsupplythroughlarge-scaleelectrificationEuropereached20millionheatpumpsin2022Heatpumpsales/yearMillions5,2620305433+36%21020122013201420152016201720182019202020212022Source:Eurelectric,EHPAforhistoricdata&Eurelectric’sdecarbonisationscenariosfor2030(2023)TheEVolutionneedstoaccelerate8000ElectricPassengerCars707000BEVPHEV58%6060005040MillionsofEVregistrations500030%ofnewregistrations20400021.6%10300002030200010000202020212022Source:Eurelectric,EuropeanAlternativeFuelsObservatory(2018-2022)&ACEA(2030)E-busesstillasmallfractionofnewfleetNewregistrationsofelectricbuses&coachesover3.5t1200004510000040%EVregistrations8000040%ofnewregistrations6000013.7%354000030200002502019202020212022201510502030BEVPHEVSource:Eurelectric,EuropeanAlternativeFuelsObservatory(2018-2022)&ACEA(2030)NumberofpublicchargersforEVsneedtodrasticallyincreaseCumulativenumberofEVPublicChargersintheEU(inthousands)35003500300025002000150010004504805001753030202120222023Q120302020Source:Eurelectric,EHPAforhistoricdata&Eurelectric’sdecarbonisationscenariosfor2030(2023)Thedataisfrom21Europeancountries,exceptfor2022whereitisonlyfor16markets.Capacitymustdoubleby2030Installedcapacityalltechs(GW)25002004200015001020976100050002022SolarWindonshore2030OtherRES2021HydroWindoffshoreCoalNaturalGasOtherFossilFuelsNuclearSource:Eurelectric,WindEurope,SolarPowerEurope,Entso-ETransparencyPlatformPermittingproceduresyettoseeimprovementOnshorewindcapacityunderpermittinginEurope(GW)FranceFinlandSpainSwedenGermany80GWGreeceWindcapacitystuckItalyinpermittingin2022NorwayCroatiaNetherlandsPolandLatviaDenmark0246810121416Source:EurelectricbasedonWindEuropedataEUdomesticproductionlacksincertainstagesofthesupplychainShareofEUproductioninglobalproductionfordifferentstagesofthesupplychainRawmaterialsProcessedComponentsAssembliesmaterialsLithium-ion1%9%0%batteries8%Windenergy1%12%18%58%Source:CRMAImpactAssessment(March2023),ITREreportonCRM(December2022)StoragesolutionsneedamassivepushEnergystoragecapacityinEU+UK(GW)488NewstorageinstallationsperyearinEurope14320201GWPumpedHydroStorageV2G19114020212.5GWUtility-scalebatteries20224.5GWProsumer-scalebatteries6GW2023Other(expected)60518857124476277202120302050Source:EurelectricDecarbonisationSpeedways,InternationalHydropowerAssociation,EASE(EnergyStorageTargets2030and2050;ActivityReport2022)Theurgencyison.2.WeneedtodrivetheexpansionanddigitalisationofelectricitygridsPowersupplyisincreasinglyreliable20182021Source:Eurelectric’sNationalassociationsNetworkextensiondoesnotmatchgrowingneeds+19%+1.5%primary+0.8%substationsand+1.2%additionalconnectedintotallength(km)customers2019-2022secondarysubstationsbetween2021and2022between2018and2021+19%+1.7%+0.2%connectionrequestsinundergroundcablesbetween2020and2021inoverheadlines(km)(km)between2021andbetween2021and20222022Source:AggregatedandanonymizeddatafromasurveyofDSOsintheEU,conductedbyEurelectric,andbasedonasampleofDSOsofallsizesSmartmeterroll-out:progress,butdisparitiespersist48%EUpenetrationrate56%(2020)EUpenetrationrate(2022)Source:Nationalassociations(datafrom2022,or2021ifnotavailable),BergInsight,EurelectricGridsmusturgentlybeboostedInvestmentsindistributiongrid/year(in2022bnEuro)706560+8%+84%50achievedneeded40353632293020100202120222023e2020-20502020Source:Eurelectricforfutureprojections.HistoricfiguresbasedonIEA’sworldenergyinvestments2023.Theurgencyison.3.WeneedtofosterafairdistributionofrisksandbenefitsFosterafairdistributionofrisksandbenefitsFairnessamongFairnessforenergysupplierscustomersFairnessforMemberStatesSecurityofsupplyPolicyFairnessRecommendations•Finalise&implementGreen•EnsureproportionalityinDealwithfocusonDistributionGridspoliticalinterventionselectrification•LaunchanambitiousPower•Targetsupportmeasuresto•FacilitatepermittingforInfrastructureDealvulnerablecustomersandelectricitygenerationandreducetaxesandleviesoninfrastructure•Modernisetariffsandelectricityincentiviseanticipatory•Ensureadequateinvestmentinvestment•Avoidcounterproductivesignalsforallneededassetsmarketinterventions(e.g.•Ensureaccessofdistributionbanningdisconnections)•ModerniseandupdatethegridstoEUfundssystemadequacy•Acknowledgedifferentmethodology•Facilitatepermittingforgridstartingpoints&includejustinfrastructuretransitionmeasuresinnextMFF•FormulateamodernmandateforRegulators