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Energy, Climate change, Environment
Energy

Energy system integration

Energy system integration supports the energy transition by creating a more interconnected and coordinated energy network that makes better use of renewable resources and enhances efficiency. 

The EU’s future energy system will be very different from today’s. As the energy system relies more and more on renewables, the direct use of electricity, rather than fuels, is the most cost-efficient way to decarbonise our energy use.

4 vertical columns represent the traditional energy system, where different energy carriers such as fuel, coal, gas and electricity feed into specific end uses such as transport or industry. And arrow points to the future integrated energy system which is represented by a circle with different energy sources feeding into end uses which are all interlinked with eachother

A more flexible and decentralised energy system, driven by energy system integration, is therefore needed to smoothly absorb additional renewable generation and reach the EU’s decarbonisation goals.  

What is energy system integration?

Energy system integration means creating stronger links between different types of energy carriers (such as electricity, liquid, gas and solid fuels, heat and cold), energy infrastructure and consumption sectors. This integration supports the optimisation of the energy system to deliver decarbonised, reliable and resource-efficient energy services, at the least possible cost. 

It includes a strong focus on electrification of demand, for example through electric vehicles, heat pumps and industrial processes. Some categories of energy demand are difficult to electrify and require indirect electrification through the conversion of electricity into fuels, such a hydrogen. In the heating and cooling sector, which represents half of the EU’s energy demand, electrification is not always the most efficient decarbonisation solution: it can be based on renewable heat or waste heat, for instance. Finally, some key cross-cutting elements, such as digitalisation of the system, flexibility markets and energy storage reinforce the efficiency of the system as whole. 

The traditional energy system was built on vertical energy value chains linking specific resources with specific sectors. Meanwhile, in an integrated energy system electricity becomes the key carrier bringing decarbonised energy to demand sectors that previously depended on fossil fuels, either through direct electricity use or indirectly, for example through hydrogen generation based on electrolysis. Electricity is also complemented by decarbonised solutions of heating and cooling, such as geothermal, biomass or solar heat.

The construction of an integrated energy system also relies on a comprehensive planning and operation, relying on interconnected infrastructure, flexibility and digitalisation.

EU strategy for energy system integration

As part of the European Green Deal, in order to encourage this smart sector integration, the Commission presented an EU strategy for energy system integration in July 2020.

The EU strategy on energy system integration promotes a greater direct electrification of end-use sectors and involves various existing and emerging technologies, processes and business models, such as ICT and digitalisation, smart grids and meters and flexibility markets.

Better integration will allow for the optimisation of the energy system as a whole, across multiple energy carriers (electricity, heat, cold, gas, solid and liquid fuels), infrastructures and consumption sectors, by creating stronger links between them with the objective of delivering decarbonised, reliable and resource-efficient energy services, at the least possible cost for society. It includes a stronger focus on the electrification of demand (through electric vehicles, heat pumps and industrial processes, for example), flexibility and storage, hydrogen and heating and cooling, which represents half of the EU’s energy use.

Electrification of transport

The electrification of transport is a good example of the potential for integration. Electric vehicles (EVs) connect the transport and power sectors, but also buildings, where the charging points are often located.

In particular, smart charging, allowing EVs to charge at the best time, not only helps reduce grid congestion, but also contributes to the wider use of renewable electricity and lower charging costs for consumers. Indeed, charging can be done at whatever time of day or night electricity prices are lowest or when renewable production is abundant. Discharging, in which the battery feeds the grid, can be done when prices are high. It allows EVs to act as distributed energy storage, feeding power back during peak demand or low renewable production. This enhances grid resilience, supports decarbonisation, and offers cost-saving opportunities for EV owners, accelerating the clean energy transition and serving as an example of the flexibility required by an integrated energy system.

The electrification of ports also has an important role to play on the path to decarbonisation. In September 2024, the Commission published a report Port electricity commercial model (project pilot). Its primary objective is to offer pivotal insights and guidance to decarbonise European ports. 

Monitoring progress

In order to assess the progress made towards energy system integration in Europe and to identify the remaining barriers, a study was published in 2024. It analyses the electrification of transport, industry and buildings and the use of renewable energy, the uptake of clean hydrogen, the utilisation of waste heat, energy infrastructure, energy storage and digitalisation.

Energy system integration will likely follow different pathways in each EU country, depending on their respective starting points and policy choices. Some of these are already reflected in the national energy and climate plans 2021-2030.

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