Schneider Electric, a global energy technology leader, has called on the EU to urgently accelerate energy efficiency and electrification in Europe as the only scalable, domestic and resilient response to ongoing energy price volatility.
With global energy prices expected to surge 24% this year – the biggest spike since 2022 – Europe is particularly vulnerable, with energy costs typically two to four times higher than other major regions. Against this backdrop, Schneider Electric is urging policymakers to stop treating energy efficiency and electrification as climate ‘add-ons’ and recognize them as Europe’s only scalable, homegrown energy resources. Accelerating them has the potential to unlock at least €250 billion per year by 2040, reducing energy demand, cutting fossil fuel reliance and strengthening competitiveness.
Europe remains structurally exposed: the EU still relies on imports for almost 60% of its energy, costing €336.7 billion in 2025. This is leaving households, industry and public services vulnerable to volatile global fossil fuel markets and geopolitical shocks. Schneider Electric argues that efficiency and electrification of end-uses can be deployed quickly with rapid payback, providing immediate relief while accelerating the transition to a stronger, more sovereign energy system.
Schneider Electric is calling on the European Commission and Member States to prioritize five policy actions:
1) Deploy energy efficiency solutions with short payback periods
Calls for support and incentives to help businesses scale proven, fast-return energy efficiency solutions that reduce demand within months.
• Buildings: interest free loans to expand connected controls and building energy management to optimize heating, cooling, ventilation and lighting in real time – cutting bills now and preparing buildings for electrified heating and demand response. Doing so could reduce total EU energy consumption by 5-6%.
• Industry: targeted support, particularly for SMEs, to scale energy management systems and low/zero-cost measures that can lead to savings of as much as 30% over time and create the foundation for digitalized production.
2) Implement existing EU efficiency and buildings legislation – fast and rigorously
Fully implement the Energy Efficiency Directive (EED) and the Energy Performance of Buildings Directive (EPBD) to unlock near-term ‘crisis response’ benefits. In particular:
• Rapid rollout of Building Automation and Control Systems (BACS) under EPBD, capable of delivering 450 TWh annual final energy savings, 64 Mt CO2 savings, and €36 billion lower energy bills.
• Strengthen EED energy audits by requiring follow-through on recommendations – starting with SMEs, supported by leasing and energy-as-a-service financing.
3) Accelerate electrification with targeted incentives
While more renewable electricity is being produced, much of how we use energy – the demand side – hasn’t switched over to electricity yet. As long as people drive petrol vehicles and heat their homes with gas, Europe will be at the mercy of imported energy and fluctuating prices.
Faster electrification will integrate renewables more effectively, reducing exposure to fossil fuel price swings. Doing so has the potential to reverse a decade long trend of stagnation in Europe, at 21% (10% behind China), where rapid electrification is taking place. Schneider Electric calls for:
• A major scale-up of heat pumps (which are 3-5 times more efficient than gas boilers), targeting one million installations per year by 2030. This requires supportive measures that lower upfront barriers, including options such as social leasing.
• Faster transport electrification through targeted measures, including incentives that accelerate corporate fleet electrification, helping expand the second-hand EV market.
4) Use taxation and funding to shift demand from fossil fuels to clean electricity
Schneider Electric urges policymakers to make electrification economically attractive by:
• Reducing taxes on electricity (including lowering VAT/excise duties where possible), to address the gap between retail electricity and gas prices.
• Redirecting and streamlining access to public funding to scale efficiency and electrification – including the Recovery and Resilience Facility and ETS revenues.
• Keeping any temporary support capping or subsidizing of gas prices minimal and time-limited, since this delays investment in clean energy resources.
5) Unleash self-generation, flexibility and smart grids to lower bills
Remove barriers and create incentives for flexibility, storage and digitalization that cut peak demand and system costs. Priorities include:
• Enabling building and industrial flexibility through rooftop PV, storage and digital controls, and supporting demand response.
• Faster, higher-quality smart meter deployment focused on functionality, real-time access and interoperability – prioritizing large commercial buildings, industry and EV charging.
• A more digital grid and smarter network planning, including support for grid-enhancing technologies, outcome-based KPIs, and tariff structures that reward peak reduction and grid-friendly consumption.
Laurent Bataille, Executive Vice President, Europe Operations at Schneider Electric, said: “The call to action for policymakers to prioritize energy efficiency and electrification is as relevant today as it was four years ago. The solutions haven’t changed. Yet in that time, Europe has lurched from one energy crisis to another – without making the progress it should have to shield itself from the price shocks and sky-high costs making its businesses, households and industry so vulnerable.”
“Complacency is Europe’s biggest energy risk. Plans to subsidize energy costs are sticking plasters, and inadequate in the long-term. Europe needs a structural change – one that incentivizes adoption of clean tech solutions so businesses and households alter the way they use energy for good. We need policies that promote an energy system built in Europe, for Europe – reducing exposure to volatility, enabling clean, reliable supply, and ensuring Europe can stay competitive.”
