Europe’s clean energy transition is advancing—but not yet transforming the continent’s underlying energy vulnerability. In 2025, wind and solar generated more electricity than fossil fuels for the first time in EU history, marking a major milestone in the shift toward renewables. Renewable energy accounted for nearly half of total EU electricity production in 2024, supported by initiatives such as REPowerEU and accelerated permitting for clean energy projects.
Yet despite this progress, Europe continues to face high energy costs, industrial strain, and strategic dependence on external suppliers.
At a Solar Power Summit, Ursula von der Leyen warned: “We know that as long as we depend on imported fossil fuels, we remain vulnerable.” Dan Jørgensen similarly acknowledged that Europe is “paying the price of inaction” despite already having many of the technologies needed for the transition.
The continent is producing more clean energy, but it has not yet built the integrated industrial and innovation systems needed to convert climate ambition into long-term economic resilience and energy sovereignty.
Recent reports of a European “solar glut” further illustrate the nature of the challenge. Europe is no longer struggling primarily to deploy renewable capacity. Instead, it faces the more complex task of integrating vast amounts of clean energy in electricity systems designed for a different era. Surplus daytime solar generation, storage bottlenecks, and grid instability reveal that the next phase of the energy transition is not simply about adding more renewables—it is about advancing a more collaborative energy ecosystem.
At JP Morgan’s European Energy Security Summit, Ann Mettler, president of Catalyse Europe, argued that Europe has relied too heavily on short-term crisis measures instead of developing a systemic energy strategy. While renewables are essential, she contends that policy has focused too narrowly on decarbonization without strengthening Europe’s industrial fabric or building home-grown clean energy solutions.
“We continue to pay for fossil fuels we don’t have—while subsidizing them to the tune of €600 billion since 2022,” Mettler noted. “Despite this, Europe still pays two to four times more for energy than the U.S.” Her critique goes beyond energy generation. Europe’s deeper weakness lies in fragmentation of policy, commercialization, and innovation.
These challenges echo across observations made decades ago by management thinker Peter Drucker, who stressed that innovation must ultimately produce meaningful market and societal outcomes—not simply meet policy targets or investment goals.
As a policy target, Europe successfully expanded renewable capacity, but often without innovation in storage, interoperability, microgrids, and market coordination. Europe’s energy transition increasingly consists of renewable technologies produced elsewhere being attached to legacy systems that were not designed to accommodate them.
Drucker also emphasized the importance of “planned abandonment”—the willingness to dismantle legacy systems to make room for the new. Europe’s continuing structural dependence on fossil fuels and imported technologies suggests the transition remains incomplete not only technologically, but institutionally.
The EU’s innovation pipeline is particularly vulnerable between research and deployment. Early-stage research is relatively well funded, but commercialization frequently stalls amid regulatory complexity and interoperability problems—reducing the potential benefits of energy startups.
Taken together, Mettler’s emphasis on localization and decentralization clarifies the need for a shift in Europe’s energy model—away from highly centralized systems and toward a model with:
- Greater strategic autonomy
- Better coordination across energy, industry, and innovation systems
- Stronger domestic manufacturing for clean energy technologies
- More seamless EU markets for startups and commercialization
- Less dependence on external supply chains
In practice, this points toward place-based innovation where cities and regions act as testbeds, utilities and startups co-develop local solutions, and procurement reforms create early demand for European startups and technologies. Europe is not short on clean energy aspirations, startup capacity, or policy vision. Its urgent challenge is orchestrating innovation, infrastructure, and communities into a resilient energy system. The continent must move beyond fragmented crisis management toward a more competitive model—and enable sustainable energy sovereignty. A new energy model for a new, disrupted era.
