The new proposals are to create a single energy market to help the EU lower prices, improve interconnectivity, move towards a lower carbon future, increase energy efficiency and counteract Russia’s ‘monopoly’ on gas supplies to the continent.

The EU announced its new strategy policy framework for an Energy Union today after many years of discussion. It is yet to be formalised by Ministers and the EU Commission but is expected to be approved later this year.

Maroš Šefčovič, the Vice-President responsible for the Energy Union said: “Today, we launch the most ambitious European energy project since the Coal and Steel Community. A project that will integrate our 28 European energy markets into one Energy Union, make Europe less energy dependent and give the predictability that investors so badly need to create jobs and growth.

“Today, we set in motion a fundamental transition towards a low-carbon and climate-friendly economy, towards an Energy Union that puts citizens first, by offering them more affordable, secure and sustainable energy.

“Together with all other Commissioners who have worked closely on the project team and with the support of the entire Commission, I am determined to now turn this Energy Union into reality.”

The Energy Union will adopt a number of inter-related policies. These will include new laws to overhaul the electricity market and make gas contracts more transparent. There will be new legislation to secure supply for electricity and gas and more funding for energy efficiency and renewable power.

It will also set out measures to achieve the target of 10% electricity interconnection by 2020 a minimum requirement for the electricity to flow and be traded between member states. And it will help set a legally binding global agreement for the Paris Climate Change Conference this December.

The commission will be reporting annually on the ‘State of the Energy Union’.

Energy Secretary Ed Davey has welcomed the Energy Union but said the EU needs to do more to support all technologies like Carbon Capture and Storage (CCS) and nuclear power for Europe to reduce dependence on Russian supplies.

He said: “The UK has been at the forefront of work to secure a coherent EU energy and climate policy and this strategy will benefit British consumers by bringing bills down, boosting energy security and providing a more cost effective route to a low-carbon economy.

“But to meet all our goals, the EU must do more to support all low-carbon technologies, including nuclear power and carbon capture and storage, alongside renewables and energy efficiency.”

The EU is the largest energy importer with 53% of its total energy imports costing more than €400 billion (£292bn) annually. An interconnected European energy grid could save consumers up to €40 billion (£29.3bn) a year, according to the EU.

Quang Minh