Transition to Renewable Energy could Save 9% of GDP in the European Union

The energy transition has ceased to be a distant idea and has become a sensible economic decision. New data show that a European system based on renewable energy can save 9% of GDP, with gains in competitiveness and energy security.

Sustainable economy in the EU: why renewable energies can save 9% of GDP by 2050

The numbers are clear: a European energy system centered on renewables and smart electrification could save 1.637 trillion euros by 2050, about 9% of GDP. This estimate, compared to a scenario of slow transition with prolonged dependency on fossil fuels, results in less volatility, lower geopolitical exposure, and better public health.

The study also indicates an intermediate saving of 331 billion euros as early as 2035. To grasp the scale, this is a comparable order of magnitude to the total annual health spending in several Member States. And it’s not a leap into the unknown: between 2000 and 2024, the share of wind and solar in EU electricity has risen from 0.8% to about 30%, with records such as solar surpassing coal in 2024 and countries like Portugal reaching over 85% renewable electricity in certain months.

Behind the cost differential are three drivers: the rapid drop in the price of onshore wind and solar kWh, efficiency of end uses (heat pumps, electric mobility, electric thermal processes), and smarter grids that take advantage of storage and demand management. In contrast, a path favoring nuclear, carbon capture, and hydrogen adds between 487–860 billion euros to the system by mid-century.

What does “9% of GDP” mean in everyday life?

For families, the difference reflects in more predictable energy bills. For companies, it translates to lower operating costs and greater autonomy. For the bloc, it implies a reduced need for energy imports: dependence would drop from 71% projected for 2030 to 22% in 2050 in the renewable scenario, reducing risks and trade deficits.

• ⚡ More competitive electricity: long-term contracts (PPAs) with wind/solar reduce uncertainty.
• 🏠 Efficient buildings: lower consumption per m², stable comfort, and reduced energy poverty.
• 🏭 Decarbonized industry: electric industrial heat, high-temperature heat pumps, and e-boilers.
• 🛡️ Resilience: fewer price shocks from gas and oil.
• 👷 Jobs: the European wind supply chain can grow from 440,000 jobs to 600,000 by 2030.

The central point is simple: renewables + efficiency + networks is the combination with the best cost-benefit ratio for the EU. Next, see how this translates into practical decisions in buildings and industry.

Electrification and efficiency in buildings: concrete steps to capture the 9% GDP savings

The largest share of European energy consumption is in buildings. By combining high-performance insulation, air tightness, heat recovery ventilation, and heat pumps, it is possible to reduce the energy need by 50–80% in a typical dwelling. On average, the investment pays back between 5 and 12 years, depending on the climate, energy prices, and local incentives.

Consider a condominium in Braga that modernizes the envelope (improved U-values), replaces gas boilers with air-to-water heat pumps, and installs 10 kWp of photovoltaic for shared self-consumption. The result? Almost half of the electricity bill covered locally on weekdays, superior thermal comfort, and a sharp drop in emissions. This is precisely where the “9% of GDP savings” materializes, brick by brick.

Recommended intervention sequence

To avoid costly mistakes, the sequence matters. Reducing the heating/cooling load before electrifying equips systems with smaller power capacities and lower costs.

• 🧱 First, reduce needs: insulation of roofs and walls, thermally broken frames, external shading.
• 💨 Ventilate efficiently: MVHR (mechanical ventilation with heat recovery) (80–90%) for indoor air quality.
• 🔥 Electrify: appropriate heat pump for the climate and low-temperature emitters (underfloor heating).
• 🔋 Self-consumption: PV on roof, optimized microinverters, and, if it makes sense, home battery.
• 🧠 Control: programmable thermostats, CO₂ sensors, and integration with dynamic tariff.

Want to see practical examples and template plans? Open resources and technology comparators are making the decision simpler, and platforms like Ecopassivehouses.pt gather guides for informed choices, without jargon and focusing on the essentials.

Actionable summary: start with an energy audit, plan in phases, and capture quick savings (roof, leakages, controls) before the larger investment. It’s the safest route to long-lasting efficiency.

Networks, flexibility, and storage: the backbone of the 100% renewable system in the EU

There is no cheap energy without good networks. The expansion and modernization of transmission and distribution grids enable more wind and solar integration, avoiding cuts and congestion that make kWh more expensive. Smart meters, dynamic tariffs, and local flexibility markets pay consumers to shift consumption to times when there is excess renewable production.

Diverse storage — distributed batteries, pumped hydro, thermal energy storage, V2G in electric fleets — reduces peaks and stabilizes prices. When the price drops, heat pumps heat water for later use; when it rises, batteries discharge. The logic is simple: use more electricity when there is wind and sun, and less when there is scarcity.

Flexibility tools that already work

From Copenhagen to Lisbon, pilot projects show measurable gains. A neighborhood with 500 homes, each with 5 kWh of battery, creates 2.5 MWh of collective storage — enough to smooth critical periods and reduce local grid costs.

• 🔄 Dynamic tariffs: hourly price signal to shift laundry, EV charging, and hot water.
• 🔌 Aggregators: gather small resources (batteries, PV, EV) and sell flexibility to the grid.
• 🚗 V2G/V2H: electric vehicles as batteries on wheels, useful during evening peaks.
• 🌊 Pumped hydro: seasonal and large-scale storage with low cost per MWh.
• 🔥 Thermal storage: “cheap” heat stored when there is renewable surplus.

Compared to high-cost alternatives (nuclear, large-scale hydrogen, CO₂ capture), the networks+flexibility strategy keeps the system cheaper by hundreds of billions of euros until 2050. This is where detailed engineering delivers macro savings.

Practical conclusion from this section: link technology to price. The more consumption “listens” to the market signal, the cheaper the system becomes for everyone.

Self-consumption and eco-friendly materials: home decisions that add up to European savings

An efficient house is a small “energy system” that harnesses sun, stores heat, and uses equipment that does more with less. With 6–10 kWp of PV, heat pump, smart control, and low-footprint materials (engineered wood, cork insulation, clays), annual consumption and emissions drop dramatically without sacrificing comfort.

Six gestures are worth gold: external shading, airtightness tested by blower-door, rainwater harvesting, appropriate tariff, preventive maintenance, and energy monitoring. Together, these steps reduce “invisible” waste, which often adds up to 10–20% of the bill.

Realistic example of self-consumption

A T3 house in Évora installs 8 kWp PV, 10 kWh of battery, and AQS heat pump. With time-of-use tariff, the battery charges during sunny hours and discharges at peak night. The PV covers 40–55% of annual consumption; with slight adjustments in habits, it exceeds 60%. If we add an electric vehicle, the self-consumption rate grows even more.

• ☀️ Well-sized PV: avoid oversizing; prioritize self-consumption, not just gross production.
• 🧠 Smart management: connect the heat pump when there is solar surplus.
• 🪟 Shading: blinds and brise-soleils reduce cooling by up to 30%.
• 🪵 Natural materials: hygroscopic comfort and lower embodied footprint.
• 🔧 Maintenance: clean exchangers and check pressures → efficiency preserved.

Small decisions add up quickly. When thousands of homes do the same, the EU needs fewer imports and reduces systemic costs. It’s a virtuous cycle linking the backyard to GDP.

Policies and financing: how to accelerate the transition and protect consumers

The right policies align prices, reduce risks, and unlock investment. The EU is already observing milestones such as solar surpassing coal in 2024 and renewables reaching 46.9% of electricity production. To maintain momentum, the priority lies in smoother permitting, stable auctions, strengthening networks, and supporting deep retrofits, especially in social housing.

Plans like REPowerEU and cohesion funds can channel capital into heat pumps, rooftop PV on public buildings, electric mobility, and technical training. For SMEs, short/medium-term PPAs with solar/wind parks offer predictable pricing and a hedge against volatility.

Tools that work on the ground

Three practical pillars: simple incentives, cheap credit, and clear information. With a transparent ROI simulator and one-stop licensing desks, decision-making accelerates, and execution scales up.

• 🏦 Green credit: reduced rates for retrofitting and self-consumption.
• 📜 Fast licensing: maximum deadlines and “one-stop shop.”
• 📊 Transparency: standardized measurement and verification (M&V) for trust.
• 🤝 PPAs for SMEs: 5–10 year contracts with stable prices.
• 🎓 Capacity building: train installers and designers en masse.

For you, a simple action today: do a pre-energy diagnosis of your house or business, identify “3 quick return measures,” and plan the rest in phases. It’s the first concrete step to participating in the European savings of 9% of GDP — with comfort, efficiency, and common sense.

Source: dinheirovivo.dn.pt