Purpose of the article Energy is one of the fundamental sectors of economy having significant impact on development of a country. Within the last decades a range of new challenges appeared in Europe, such as security of supply of energy sources, climate change, lack of competition between energy companies, affordable energy prices, and other. The existing legal framework of the European Union (EU) does not already perfectly fit to the requirements of the current situation, and there is a clear need for retailoring the energy policy. The new era in the EU energy policy was launched by the Riga process at the beginning of 2015 and found its first highlights in the communication of the European Commission devoted to the Energy Union. The resilient Energy Union aims to ensure EU consumers secure, sustainable, competitive and affordable energy, defining the five main action directions (dimensions). The purpose of the paper is to analyze the possible impact of the new Energy Union strategy on the existing energy sector. Methodology/methods The generally accepted quantitative and qualitative methods of economic science, inter alia comparative analysis, parameter estimation, grouping, economically mathematical modelling, synthesis, inductive, deductive, logically constructive and expert evaluation methods have been used for the research. Scientific aim is to provide an outlook on existing EU energy system, describe the approach proposed by the Energy Union and with a help of the GAMES model demonstrate how the five dimensions adjust the current situation to the new priorities. Findings The main findings of the research show that the Energy Union is a strong tool with a high potential to change the situation in the energy sector of the entire European Union and each its member state. The 5th freedom of the EU – free movement of energy, becomes a reality after building up physical infrastructure (hardware) connecting energy islands with capable “bridges” and adjusting legislation (software) in order to eliminate unjustified roadblocks and develop a proper market design. Conclusion The results of the data analysis and the GAMES model demonstrated that the proposed by the Energy Union strategy solutions have a high potential for changing the directions of energy flow within the EU and outside its borders by stimulating the local generation, building new infrastructure and strengthening existing one, as well as integrating isolated markets into the common energy network. The concept of the Energy Union is still young and should be further developed by the EU member states.