How renewable energy can restore Europe’s industrial competitiveness

Europe faces an energy competitiveness crisis due to high import dependency, with industrial electricity prices significantly higher than in China and the US. The document proposes that increasing the share of wind and solar in the power mix to 70-90% by 2050 could reduce total electricity system costs by nearly 30%. To achieve this, it recommends de-risking grid investments, deploying two-way Contracts for Difference for offshore wind, and rebalancing energy taxes to close the cost gap between electricity and fossil fuels.

• High dependency on energy imports has led to price volatility and a loss of industrial competitiveness in Europe. The EU imports nearly 60% of its energy, including over 90% of its oil and gas, resulting in energy prices that remain more than double pre-Ukraine war levels. This has contributed to a 10–15% production drop between 2021 and 2024 and the loss of nearly one million manufacturing jobs since 2019.
• Expanding the share of wind and solar in the European power mix to 70-90% by 2050 is projected to reduce total electricity system costs by almost 30%, decreasing from the current level of approximately 150 EUR/MWh. Offshore wind is expected to contribute 20% to 26% of that total mix.
• A significant barrier to electrification is the cost gap between electricity and fossil fuels; electricity is on average three times as expensive as natural gas for industrial end-users in the EU. The Electrification Action Plan (EAP) aims to reduce this ratio to a maximum of 2 for industry and 2.5 for households by 2030, targeting a 46% share of electricity in final energy consumption by 2040.
• To unlock competitive power, the document recommends three policy levers: providing state-backed financing and longer payback periods for grid investments, expanding two-way Contracts for Difference (CfDs) for offshore wind to stabilize revenues, and shifting fixed government taxes and levies off electricity bills.
• While renewable energy introduces variability, a balanced mix of one-third solar and two-thirds wind aligns with European seasonal demand. The occurrence of 'dunkelflaute' (prolonged low solar and wind) varies regionally, averaging 1.6 times per year across Europe, with Belgium having the highest frequency (three per year) and Portugal having none.

APA

Bjørndal, U. S. T. (2026). How renewable energy can restore Europe’s industrial competitiveness. World Economic Forum. https://www.weforum.org/stories/energy-transition/renewable-energy-europe-industrial-competitiveness/

Chicago

Bjørndal, Ulrik Stridbæk, Tord. How renewable energy can restore Europe’s industrial competitiveness. World Economic Forum, 2026. https://www.weforum.org/stories/energy-transition/renewable-energy-europe-industrial-competitiveness/.

Wikipedia

{{cite press release |last1=Bjørndal |first1=Ulrik Stridbæk, Tord |title=How renewable energy can restore Europe’s industrial competitiveness |publisher=World Economic Forum |date=13 October 2026 |url=https://www.weforum.org/stories/energy-transition/renewable-energy-europe-industrial-competitiveness/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{bjrndal2026how, author = {Bjørndal, Ulrik Stridbæk, Tord}, title = {{How renewable energy can restore Europe’s industrial competitiveness}}, publisher = {World Economic Forum}, year = {2026}, month = oct, url = {https://www.weforum.org/stories/energy-transition/renewable-energy-europe-industrial-competitiveness/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }