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2. THE GREEN TRANSITION AND EU CLIMATE GOALS efficiency would be missed, and the development of the internal energy market itself would be greatly slowed. Smart grid deployment is therefore not an end in itself, but a means to achieve broader policy goals: a cleaner, more efficient and interconnected European energy system. 2. THE GREEN TRANSITION AND EU CLIMATE GOALS The green transition denotes the sweeping shift from a fossil-fuel based energy model toward a sustainable, low-carbon economy. In Europe, this transition is driven by ambitious climate and environmental targets. Under the European Green Deal and subsequent legislation, the EU has committed to reduce greenhouse gas emissions by at least 55% by 2030 (compared to 1990 levels) and to reach net-zero emissions by 2050, effectively achieving climate neutrality*. Decarbonizing the power sector — which means replacing coal, gas, and other carbon-intensive generation with renewable and carbon-free sources — is central to meeting these goals. The share of electricity generated from renewables in the EU is expected to rise from roughly 37% in 2020 to 6096 or more by 20307. Achieving this will require integrating vast amounts of wind and solar capacity onto European grids in a short timeframe. The “green transition” in the electricity sector thus encompasses not only the growth of renewable energy, but also improvements in energy efficiency, the electrification of transportation and heating, and the adoption of technologies like energy storage and demand response — all aimed at reducing carbon emissions and environmental impact. This clean energy transition has taken on increased urgency and complexity in light of recent energy crises. In 2022, the war in Ukraine precipitated a severe disruption in European energy markets, with curtailed natural gas flows and soaring electricity prices. This crisis exposed the EU’s vulnerability due to reliance on imported fossil fuels and underscored that the green transition is not only an environmental imperative but also a strategic necessity for energy security. In response, European policymakers doubled down on renewable energy deployment and energy savings. EU Member States invested approximately €110 billion in new renewable energy projects in 2023, roughly ten times more than investments in fossil fuels, reflecting a strengthened resolve to shift to domestically produced green energy and reduce dependence on foreign suppliers®. At the policy level, the European Commission and Council launched the * HOLMAN & SIEMPLENSKI LEFORT, 2024. > European Commission: Electricity market design ® HOLMAN & SIEMPLENSKI LEFORT, 2024. +13 +
