A Joint Path Toward Cleaner and More Affordable Energy in Central and Eastern Europe

Countries in Central and Eastern Europe could improve their energy security and lower electricity prices through regional cooperation and greater use of wind and solar energy.

In this report, the think tank Ember proposes an ambitious plan to expand wind and solar energy in the countries of Central and Eastern Europe (CEE): Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Bulgaria, and Romania. It shows that the accelerated deployment of renewable energy sources can lead to increased security of supply and lower electricity prices. The study uses a newly developed open model of the European electricity market.

Central and Eastern European countries can improve security by accelerating the development of wind and solar energy

The region should set ambitious targets for wind and solar energy by 2030 in order to lower electricity prices and become more competitive.

The countries of Central and Eastern Europe (Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Romania, and Bulgaria) have made significant progress in the area of energy transition in recent years. This region accounts for roughly 20% of the EU’s population and territory, 15% of the EU’s GDP, and 17% of electricity demand, but it still contributes only 7% of the EU’s wind capacity and 12% of its solar capacity. However, current renewable energy targets in most Central and Eastern European countries are significantly lower than the EU average. This hesitant approach to the deployment of wind and solar energy, coupled with a persistently high dependence on fossil fuels, is now jeopardizing the region’s energy security, increasing the cost of living, and reducing the competitiveness of its economies. 

Modeling a more ambitious approach to renewable energy by 2030 shows that a different path offers significant benefits. If Central and Eastern European countries harness their wind and solar potential by removing barriers to the deployment of renewable energy, wholesale electricity prices will fall by 29% in 2030 compared to the path under current policy conditions. This would not only increase the region’s competitiveness in Europe but also improve energy security. Key milestones for energy planning in Central and Eastern European countries: including the process of updating National Energy and Climate Plans (NECPs), which is to be completed by mid-2023, and the required inclusion of REPowerEU chapters in Recovery and Resilience Plans (RRPs) in the second quarter of 2023. To gain full access to the benefits of low-cost energy from renewable sources, Central and Eastern European countries should seize the opportunity and propose ambitious decarbonization pathways.

New wind and solar capacity will reduce electricity prices in Central and Eastern Europe by 29%

By accelerating the deployment of wind and solar energy, the Central and Eastern European region could reduce average wholesale electricity prices by 29% compared to current policy targets. The region could also become fully self-sufficient in electricity generation and export 23.1 TWh of electricity in 2030, compared to imports of 7.3 TWh in 2022. If the region does not participate in Europe’s energy transition, it will lose its economic competitiveness and become dependent on electricity imports.

Central and Eastern European countries could supply 200 GW of wind and solar energy by 2030

By 2030, the Central and Eastern European region could harness 130 GW of solar energy, 45 GW of onshore wind energy, and 20 GW of offshore wind energy—a sixfold increase from the current wind and solar capacity of 35 GW and nearly double what is likely under current policy conditions. This would enable the Central and Eastern European region to achieve a 63% share of renewable energy in electricity generation by 2030, up from just 25% in 2022, thereby making a net-zero EU energy system achievable by 2040.

Cooperation and interconnectors are essential to realizing the region's full potential

Only through cooperation among individual countries can the region add more than 100 GW of offshore wind power capacity. Accelerating existing and proposed interconnection projects will enable better integration of wind and solar energy, which will reduce power curtailment and lower electricity prices.

Aligning national renewable energy strategies with EU policy paves the way for at least 136 billion euros in public funding

Setting renewable energy targets in line with EU climate policy would open up funding opportunities for the energy transition in Central and Eastern Europe totaling at least 136 billion euros from the Recovery and Resilience Facility, the Just Transition Fund, and the Modernization Fund.