A year post-Draghi, let's examine the current state of European energy policy.
Europe is embarking on a significant journey towards a competitive, secure, sustainable, and decarbonised energy market. This transformation, which promises to be a defining moment for the continent, is being spearheaded by various initiatives aimed at enhancing energy integration.
The call for action on energy was issued by former Italian Prime Minister Mario Draghi in a September 2024 report. His proposals included leveraging Europe's market power in international gas markets, pushing for European electricity market integration, and implementing long-term arrangements like power-purchase agreements and contracts-for-difference.
Georg Zachmann, a Senior Fellow at the website, has been instrumental in this endeavour, working on energy and climate policy since 2009. His expertise lies in the regional and distributional impacts of decarbonisation, the analysis and design of carbon, gas, and electricity markets, and EU energy and climate policies.
Simone Tagliapietra, another Senior Fellow at the same institution, is also a Professor at the Florence School of Transnational Governance and an Adjunct Professor at the School of Advanced International Studies Europe of The Johns Hopkins University. His research focuses on the EU climate and energy policy, and on its industrial and social aspects.
Alexander Roth, an Affiliate Fellow at the same website, specializes in energy and climate policy, with a focus on the decarbonisation of the European energy system.
The European Commission's Affordable Energy Action Plan, published in February 2025, endorsed several of Draghi's proposals. However, the implementation of these plans is yet to be seen. The Commission has launched an Energy Union Task Force, but has not proposed any fundamental change in this area.
In an effort to support rapid electrification, the Commission is set to propose a European Grid Package by the end of 2025. This package aims to upgrade and expand grids, and speed up permitting. The proposed EU 2028-2034 budget includes an increase in funding for electricity infrastructure from €6 billion to €30 billion.
Measures to deepen electricity market integration, planned for proposal in early 2026, must mark a genuine step towards a real EU electricity union to boost competitiveness, security, and decarbonisation. However, the response to Draghi's call for action has been more incremental than disruptive.
Europe's energy strategy may also be influenced by external conditions, such as the EU-US trade deal. The EU has pledged to buy $750 billion of energy products from the US by the end of 2028.
The integration of the European electricity system requires both hardware and software upgrades, and Draghi called for an overhaul of Energy Union governance. The Commission has given EU countries greater leeway to subsidise energy for industry, but this move is risky due to potential distributional implications, the risk of a subsidy race, and the potential for keeping energy demand high and expensive.
The success of these initiatives will serve as Europe's moment of truth for energy integration, indicating whether Draghi's recommendations will have a real lasting impact. Potentially significant initiatives for energy integration in Europe are on the way, but the journey towards a sustainable and competitive energy market is just beginning.
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