Central Europe could have energy that is one-third cheaper. All it takes is strengthening cross-border energy connections
In early October, the Puls Institute published two EMBER studies in Czech that present a visionary outlook on the energy future of Central and Eastern Europe (CEE). The detailed analyses highlight the region’s potential in wind and solar energy and suggest how these countries could achieve energy self-sufficiency and security if they adopted ambitious decarbonization strategies. A key element is strengthening cross-border energy connections and doubling interconnection capacity in Europe over the next ten to fifteen years. The studies then offer a path for CEE countries to optimize the use of renewable energy sources, achieve climate neutrality, and simultaneously reap economic benefits from the entire process.
Regional Security and the Economic Potential of Energy Interconnectors
In the context of geopolitical tensions and dependence on fossil fuels—particularly from Russia—energy security is a key priority for CEE countries. Wind and solar energy could be crucial tools for building energy security and reducing vulnerability to political blackmail and economic pressure. According to the study *A Shared Path to Cleaner and Cheaper Energy in Central and Eastern Europe*, CEE countries have significant potential for wind and solar power generation, which could reach up to 200 GW by 2030. Such capacity could lead to a 29% reduction in electricity prices for ordinary consumers and enhance the region’s energy security. For the Czech Republic, this would mark a truly pivotal turning point in the development of electricity prices, which, according to an online tool for European wholesale electricity price data are nearly at the highest levels in the EU.
Wind and solar energy not only offer environmental benefits but also economic ones. Affordable electricity attracts new investment and maintains competitiveness. Countries that join initiatives such as RE100 and those that seek to stabilize their operating costs through renewable energy purchase agreements will derive significant benefits from these sources. An increased share of renewable energy will lead to a decline in wholesale prices, benefiting not only industry but also households.
The EMBER study examines two scenarios: a baseline scenario, reflecting current policy ambitions, and an ambitious scenario based on “high” projections from the energy industry. In the ambitious scenario, renewable energy production in the CEE region would increase by 31% by 2030, leading to a 29% reduction in wholesale electricity prices. The costs of new wind and solar power generation are already lower than those of coal- and gas-fired power plants, and this trend is expected to continue as the cost of carbon emissions rises.
However, to achieve these benefits, it is essential that CEE countries adopt appropriate renewable energy targets. The current ambitions of most of these countries are significantly lower than the EU average. The share of energy from renewable sources in total electricity consumption in the EU rose to 37% in 2020, up from 34% in 2019, according to a 2022 report by the statistical office Eurostat. Austria had the highest share of renewable energy in electricity consumption within the EU, while the Czech Republic was among the five countries with the lowest share.
A scenario modeled by EMBER would bring the Central and Eastern European region into alignment with EU goals, which would open up additional funding opportunities needed to carry out the energy transition. CEE countries already have access to funding such as grants under the Recovery and Resilience Facility, the Just Transition Fund, and the Modernization Fund. These funds can be crucial for achieving the transition to climate neutrality. However, for these funds to be released, strategic documents such as the RRP and NECP must include ambitious strategies and targets for wind and solar energy that are compatible with policies such as the agreement on a 42.5% share of renewable energy in electricity generation set out in the EU Renewable Energy Directive.
The countries of Central and Eastern Europe thus face a historic opportunity. They can adapt their energy strategies, adopt ambitious targets for renewable energy, and thereby pave the way for energy self-sufficiency, security, and prosperity—which, in turn, will also strengthen European cohesion.
Stronger cross-border connectivity can pave the way to prosperity
In a recent study titled “Lift the Barriers: The Path to Affordable and Clean Electricity Lies in Opening Borders,” the organization EMBER emphasizes that doubling the current interconnection capacity of Europe’s power transmission grids over the next ten to fifteen years is an absolutely essential step that could lead to the achievement of the EU’s climate targets and climate neutrality. However, current plans for expanding interconnections do not fully reflect these ambitions, leading to a discrepancy between the projected and expected interconnection needs of energy systems in 2030 and 2040.
The EMBER study examines in detail how the interconnection of electricity transmission grids enables the optimization of renewable energy sources, such as wind and solar, and how this contributes to achieving Europe’s decarbonization goals. Between 2025 and 2030, interconnections could save 14 Mt of CO2 per year—equivalent to Lithuania’s annual emissions in 2021—and between 2030 and 2040, they could save 31 Mt of CO2 per year—equivalent to Slovakia’s annual emissions in 2021.
Cross-border exchange of lower-cost electricity from renewable sources offers an alternative source of flexibility and, among other things, reduces Europe’s vulnerability to fluctuating gas prices and geopolitical risks. This study focuses on the importance and necessity of interconnectors within Europe’s energy infrastructure. Interconnectors are cross-border high-voltage cables, and given that Europe is the largest interconnected grid in the world, its regional cooperation on cross-border energy interconnections is highly desirable for the future. Interconnectors will ensure a flexible system capable of balancing geographical differences in wind and solar power generation, thereby reducing fluctuations in output and minimizing supply constraints. This will ultimately lead to lower electricity prices.
The study emphasizes that Europe must double its current interconnection capacity over the next ten to fifteen years to achieve its energy and climate neutrality goals. The projected interconnection capacity is insufficient, with estimated cross-border exchange capacity in the reference grid at 136 GW in 2030, while the system’s needs range from 148 to 187 GW. In 2040, the gap between the reference grid and system needs is even greater, with expected interconnection capacity of 155 GW, while system needs range from 225 to 274 GW.
Conclusion and Recommendations for Policy Making
It is essential that policymakers take the recommendations in these documents into account when formulating future energy strategies and policies. Better energy interconnections will enable more efficient cross-border exchange of clean electricity from renewable sources, and at the same time, this robust grid can serve as a catalyst for European solidarity and unity during periods of geopolitical and energy uncertainty. Furthermore, the study proposes concentrating existing EU funds into a dedicated European instrument for energy networks.
It is essential to identify the areas where priority political support is needed to ensure that interconnections do not hinder the expected expansion of new wind and solar power plants. Strategic planning and investment in energy infrastructure can yield long-term benefits in terms of energy security and stability.
Governments should take immediate action to update the NECP so that it aligns with industry forecasts and economic potential, and include ambitious plans for the development of wind and solar energy and grid expansion projects in the RRP chapter on RePowerEU. Last but not least, it is absolutely essential to remove domestic barriers hindering the deployment of wind and solar energy.
Ember is an independent think tank that focuses on the transition to a low-carbon energy sector through data analysis and the preparation of expert studies.
RE100 is a global initiative that brings together the world’s most influential companies committed to using 100% electricity from renewable sources.