Column by Jacob Østergaard, Professor at DTU Wind and Troels Ranis, Vice Director of the Confederation of Danish Industry. Published in Altinget on 03.04.2025.
The energy crisis following Russia’s invasion of Ukraine has taught us many lessons. One of them is staying ahead of the curve. And it hasn’t become any less relevant given the geopolitical reality Europe is facing right now.
Every day, new major policy initiatives impact European businesses, economic growth, and - ultimately - the everyday lives of Europeans. What we used to be able to estimate is now completely unpredictable. The latest example is the US tariff imposed on European products.
To maintain growth, increase competitiveness, and strengthen resilience to the US, China, and Russia, Europe needs to focus on specific areas of strength. The energy sector is an obvious choice as it has a huge potential for growth and innovation.
Despite fierce international competition, Europe has some of the world’s best research environments in the field of energy, and this is because Denmark, among others, is home to some of the most prominent companies in the renewable energy sector.
If collaboration between research and industry can be further strengthened, including through a national and European focus on increasing investments, it will not only create increased growth and competitiveness in Europe.
It will also create a robustness towards the outside world that is necessary in terms of security policy.
Lack of investment
In the current situation, Europe remains dependent on energy imports from geopolitically unstable regions, and innovation is therefore a critical factor in reducing this dependence.
By promoting the development of renewable energy technologies, we can create a more stable and independent energy supply in Europe.
In terms of research, there is a great need to sharpen the focus on system solutions that make energy technologies work together at a more general level. Take electric cars and Power-to-X technologies, for example.
In this area, research is not just about developing a single technology, but about activating an entire value chain of players, including technology providers, grid companies, electricity traders, and market operators, that need to talk to each other to make technologies act flexibly and on market terms.
This requires smart, well thought-out system solutions that are robust to fluctuations. These are solutions we don’t currently have at our disposal. This is partly due to the fact that investments in system solutions are almost impossible to obtain, while funding for a single component or technology in itself has much better conditions.
In the big picture, this means that Europe’s chances of becoming self-sufficient are diminishing. Simply because it was not realized in time that the development and innovation of technologies cannot stand alone if Europe is to be self-sufficient with renewable energy in the near future.
New energy strategy
Increased research and collaboration between the various players in the energy sector can create new energy technology and system solutions that create jobs and industrial growth.
This requires public authorities to create the right, efficient framework conditions, while private companies must be more willing to invest and take risks.
Finally, investments in the broader system solutions should be prioritized to accelerate Europe’s readiness to build the renewable energy system of the future.
In short: There is a lack of a comprehensive innovation strategy for energy that not only frames how Europe will achieve 100% energy independence from the outside world. But that also aims for a Europe that can become a global energy frontrunner by investing heavily in innovation and growth.
We hold all the right cards to succeed. It all depends on whether we dare to prioritize the effort required.
