Can Europe build its way to energy autonomy?

Europe’s energy autonomy will depend less on replacing fossil-fuel imports than on building the grids, industrial capacity and critical-material supply chains needed to electrify the economy.

• European power consumption is projected to rise by more than 40% between 2025 and 2040, driven by electrification in buildings, transport and industry and by data centres.
• Electricity networks may require €1.2 trillion of investment by 2040, including about €730 billion for distribution grids, while roughly 40% of Europe’s distribution grids are already more than 40 years old.
• Around 120 GW of mature renewable projects could fail to secure timely grid access by 2030 because of permitting delays, equipment shortages and connection constraints.
• In 2025, electricity prices for large energy-intensive industrial users in the EU remained more than twice US levels and about 50% above Chinese levels, weakening European competitiveness in chemicals, metals and advanced manufacturing.
• Electrification shifts rather than eliminates dependency: China accounted for about 91% of global refining of magnet rare earths and 94% of rare-earth permanent-magnet production in 2024, making processing, diversification and recycling strategically important.

Takeaway: Investors should look beyond renewable generation to utilities, electrical-equipment suppliers, developers with secured grid access, critical-material processors and recyclers, while favouring companies with scarce capabilities, existing infrastructure and the financial strength to execute.