Europe Urged to Rethink Future Energy Strategy
Europe’s energy system is under growing pressure as rising demand, high costs and global competition reshape the role of energy in the economy.
A report from the Tony Blair Institute for Global Change argues that energy policy must move beyond a narrow focus on emissions targets and instead prioritise abundant, affordable and secure electricity at scale.
Across major economies including the United States, China and India, energy strategy is increasingly focused on ensuring supply, with rapid expansion of generation, grids and domestic capacity. Clean energy is growing, but within systems designed first to deliver reliable and low-cost power.
Europe, by contrast, is facing mounting challenges. Electricity prices remain two to three times higher than in competing economies, while the region still imports nearly 60% of its energy, leaving it exposed to geopolitical shocks and volatile markets.
At the same time, demand is accelerating. Electrification across transport, industry and heating is increasing power needs, while the growth of digital infrastructure, including AI, is creating new and sustained sources of electricity demand.
The report warns that high costs, slow infrastructure deployment and fragmented planning are beginning to weigh on competitiveness, raising the risk of industrial decline and reduced global influence.
To respond, it calls for a coordinated, continent-wide reset—expanding grid infrastructure, improving interconnection, and accelerating system-wide electrification. Reform of energy markets and faster permitting are also highlighted as critical to unlocking supply and reducing costs.
Rebuilding Europe’s clean-tech manufacturing base is another key priority, alongside strengthening supply chains and reducing reliance on imports.
The message is clear: the global energy transition is no longer defined only by decarbonisation, but by the ability to deliver power at scale.
For Europe, maintaining competitiveness will depend on whether it can align climate ambition with the realities of cost, capacity and energy security in an increasingly demanding global system.