Energy transition: the transformation of the energy sector

Green Stairs

In the dialogue surrounding the twin climate and energy security crises, the term “energy transition” is becoming ever more prevalent. It is widely accepted as a necessary step towards curbing carbon emissions and improving energy efficiency. The efforts it entails are not to be underestimated, but the situation requires urgent action to limit global warming, while helping Europe wean itself off imported fossil fuels. This is why it is urgent that everyone delivers on the commitments made in Paris at COP21 and in Glasgow at COP26. Here is an overview of what the commitments made by EU countries may translate into when overhauling the energy system as we know it.

The energy transition – A permanent switch to clean and renewable energy sources

The International Renewable Energy Agency describes the energy transition as “a pathway toward transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century”. In order to accelerate the transition and attain a sufficient level of decarbonisation to limit global warming, sustainable energy transition initiatives must be embraced on a planetary scale. The IRENA estimates that, if applied correctly, these efforts could “potentially achieve 90% of the required carbon reductions”.

The shift from fossil fuels to clean and renewable energy sources throughout the global energy sector, along with the spread of electrification and better energy storage solutions, will play an instrumental role in the energy transition. Currently, at global level, the power sector is still predominantly dependent on non-renewable energy sources, such as natural gas, coal, and oil. Sources of clean energy include renewable sources (which come from a clean an inexhaustible supply) and carbon neutral sources (which may or may not be renewable, but produce zero carbon emissions).

However, in Europe, the transition to carbon neutral energy sources is accelerating. In 2020, 66% of the electricity used across the continent came from clean and renewable sources, like wind, solar, hydropower and nuclear. By 2030, these sources could cover as much as 80% of the mix.

Since the sun is an inexhaustible source of power, making solar energy a greater part of our energy system will be key to reaching the net zero emissions ambition.

The wind is another source of renewable power which can be used to generate carbon-free electricity, providing a clean and reliable solution to power the world.

Similar to wind, and solar, water though hydropower is another abundant source of clean energy. What’s more, pumped hydropower represents 94% of Europe’s electricity storage capacity.

Though it is not renewable, nuclear power does have the benefit of being a zero-emission, clean energy source.

But renewable energy projects have benefits that go beyond decarbonisation. Eurelectric's Power Plant report shows how integrated renewable energy projects, such as applications in agriculture through agri-PVs, can protect biodiversity and even restore degraded ecosystems.

Why should we move away from polluting energy sources?

If the energy transition is crucial for our future, it is because the current model is unsustainable. The impacts of global warming, which include extreme weather events, rising sea levels, bushfire, and droughts to name a few, could have even more severe long-term repercussions. By the end of the decade climate change will become the major driver of biodiversity loss. This, in turn, will reduce our ecosystem's ability to capture carbon emissions, further increasing the pace of climate change.

According to the Intergovernmental Panel on Climate Change (IPCC) sustainable energy transition initiatives are non-negotiable if we wish to limit global warming to 1.5°C and avoid irreparable damage to our environment.

Zero-carbon: an achievable goal?

In 2015, 196 countries signed the Paris Agreement, pledging to take concrete steps towards cutting carbon emissions to mitigate global warming. With a goal to limit the temperature increase to a maximum of 1.5°C, the EU made a commitment to reduce its greenhouse gas emissions by 55% (compared to 1990) by 2030.

According to the IPCC, about 60% of global greenhouse gas emissions come from the use of fossil fuels, 25% of CO2 emissions originate in heat and electricity production, 24% in land use (agriculture and forestry in particular), 21% in the industry sector, and 14% in transportation.

The European electricity sector is fully committed to lead the energy transition and support the decarbonisation of the EU economy. As the production and use of energy account for more than 75% of the EU’s greenhouse gas emissions, targeting the power sector will be critical in achieving our 2030 climate objectives.

Making the energy transition a reality

To this end, the European Green Deal will focus on ensuring a secure and affordable clean energy supply in the EU. It will decarbonise, integrate, interconnect, and digitalise the EU’s economy. Il will also prioritise energy efficiency programmes, aimed at improving the standards of living while reducing the energy consumption. As the power sector becomes increasingly reliant on clean and renewable energy, the electrification of end use sectors, like transport, buildings and industries is the most cost-effective solution for reducing their CO2 emissions and energy demand.

Power generation

As electricity becomes carbon neutral, electrification will speed up decarbonisation across the economy. However, the deployment of clean energy sources is impeded by a lengthy permit-granting process, as it currently takes 4 to 8 years to receive the authorisations required to install solar or wind energy farms. While we do have the technical means to deploy over 500 GW of additional renewable capacity needed to meet the decarbonisation targets, the administrative roadblocks need to be addressed.

In the aftermath of Russia's invasion of Ukraine, the European Commission announced measures to cut the EU's reliance on imported fossil fuels and shield energy consumers from skyrocketing energy prices. The plan includes measures to speed up the deployment of clean and renewable energy sources, and considers identifies ways to cut the administrative red-tape.

Reskilling the workforce

According to the IRENA, the renewable sector employed 12 million workers in 2020. To add to their numbers and compensate for the job losses caused by the transition from fossil-fuelled to clean power generation, job retaining programmes must be implemented. These measures would address the loss of income that the sectoral shifts in the economy will imply. By re-skilling and up-skilling a workforce trained with the needs of carbon-intensive industries in mind, many will be able to find employment in growth sectors.

The Game Changers report, released by Accenture and Eurelectric, points in the same direction. It highlights that 7.4 million roles could be created across the electricity value chain. Moreover, around 489,000 employment opportunities could be made available in efficiency and demand optimisation; 340,000 in green hydrogen, while the electrification of automotive sector could provide 199,000 job openings.

The just transition

To reduce the social and economic impact of the energy transition and support Member States as they take the necessary measures to create a climate neutral economy by 2050, assistance will be provided in the context of the Just Transition plan. As part of these measures, the Just Transition Fund focuses on the regions that are most dependent on fossil fuels and whose ability to finance the necessary investments is more limited. Moreover, the European Social Fund Plus will allocate 25% of its €100 million budget to fostering social inclusion, similarly targeting those most in need.


Sustainable energy transition initiatives should also address energy storage, one of the main issues we are currently facing when it comes to switching to renewable energies. As the technology continues to progress, energy storage solutions will make renewable power much more secure and reliable than it is today.


Clean and renewable energy sources are a reliable and economical means of producing electricity. In the United Kingdom and Europe, the cost of solar and wind-generated power has plummeted, making it cheaper than high-carbon energy sources, and a sound investment for the private sector. As consumers are offered viable alternatives to fossil fuel-based means of transportation, heating, and cooling, they will play a greater part in the energy transition. Climate policies are likely to have an impact on low-income populations, however, and mitigating measures will need to be implemented.


The success of the energy transition is conditioned by Europe’s distribution grids, which bring the electricity from generators to consumers. Although the upfront investment to decarbonise, decentralise, and digitalise the power system will be significant (€375-425 billion), the economic impact will be offset by the societal benefits overall.

Rapid and coherent action will be indispensable to stop climate change in its tracks and prevent irreversible damage to our environment, economy, and society. The European Social Partners in the electricity sector acknowledge that making the energy transition a reality will be challenging. This is why they want to ensure that the transition will be a just one, which will contribute to economic growth and to the creation of high-quality employment in Europe.

Related topics