Reflecting on energy dependence on imports, hoping to revive industrial capacity, Europe aims to build a 'power continent' with China and the United States
The electricity prices in Europe are twice as high as those in China and the United States, and without change, there will be no industrial future. "According to Reuters on August 1st, the cost of electricity in Europe ranks among the highest in the world. In the face of competition between the United States and China in manufacturing, artificial intelligence, and other fields, the European Union is planning to spend trillions of euros to build the world's first "electricity continent", hoping to revitalize Europe's industrial competitiveness by building a cheaper and safer power system.
The EU's' huge mistake '
Since the outbreak of the Russia-Ukraine conflict, European energy prices have soared. According to a Reuters report citing data from the International Energy Agency, electricity prices in Europe are currently at least 50% higher than those in China and the United States. The high energy costs have severely weakened the competitiveness of industries such as chemical, steel, and cement. On the other hand, according to statistics from the European Commission, the electrification rate in the EU is currently stagnant at 23%, with plans to reach 32% by 2030, while the electrification rates in China, South Korea, and Japan have already exceeded 30%. Last week, Fatih Birol, the Director General of the International Energy Agency, also criticized this situation. Birol said in an interview with the Financial Times that the EU's failure to accelerate the energy transition was a "huge mistake".
According to Deutsche Telekom, Brussels has not ignored these criticisms and has recently announced a new action plan aimed at building the EU into the world's first electricity continent, accelerating the transition of Europe's industrial, transportation, and construction sectors from fossil fuels to electricity. According to this new plan, by 2030, the EU will increase the proportion of renewable energy to 42.5%; By 2040, the proportion of electricity in terminal energy consumption will increase to 46%, with an annual investment of over 660 billion euros, focusing on the construction of infrastructure such as wind power, photovoltaics, power grids, energy storage, electric vehicles, and heat pumps. The EU hopes to reduce fossil fuel imports through this, saving 260 billion euros annually in fossil fuel import costs by 2040, while avoiding billions of euros in climate disaster losses, and creating a large number of local jobs and industrial chains.
According to the website of the European Commission, electrification transformation is beneficial for both EU countries and the general public. After all, reducing dependence on imported fossil fuels can make Europe more independent, competitive, and reduce vulnerability to geopolitical shocks. The modernization and decarbonization of the European energy system will help accelerate the green transformation, specifically for ordinary European consumers. For example, electric vehicles can save 78% of vehicle costs, and replacing gas boilers with heat pumps can reduce the average heating cost of households by 60%. In order to narrow the price gap between electricity and fossil energy costs, encourage cleaner electricity technologies, the EU's electrification plan also includes reducing grid costs and taxes for energy intensive enterprises, encouraging the use of smart meters, reducing the upfront costs of electrification technology in key demand areas, accelerating the deployment of the European grid through a package plan, accelerating the application of innovative electrification solutions, investing in electrification skills and jobs, and creating hundreds of thousands of high-quality jobs.
If electricity prices are not lowered, it will be difficult for Europe to compete with China and the United States
The road to independence in Europe began with the supply of electricity, "wrote Dan Jorgensen, the EU Energy Commissioner, in the German newspaper Handelsblatt, stating that the European" Electricity Continent "plan is an ambitious but imperative goal. The EU has seen the initial signs of an electrification revolution. In the first quarter of 2026, there will be over 500000 electric vehicles registered in the European Union. During the same period, over 400000 household heat pumps were sold only in France, Germany, and Poland. The article also provides an example that the cost of driving an electric car in Finland is 2.60 euros per 100 kilometers, while the cost of driving a gasoline car is as high as 9.20 euros per 100 kilometers. According to the Danish think tank Concito, European households can save 1700 to 3000 euros annually by combining electric vehicles with heat pumps.
The article also specifically calls on EU governments to take steps to catch up: firstly, it is necessary to build more wind farms, install more solar panels, and develop the next generation of nuclear power plants and technologies. Secondly, it is necessary to accelerate the construction of the European continent's power transmission network. By 2040, Europe needs to invest 1.2 trillion euros in transmission and distribution networks. According to the EU's estimate, investing 1 euro in each pair of power grid upgrades can save over 2 euros in overall energy system costs. The stagnant process of electrification in the current economic and social sectors must be changed.
According to a report by the Energy Economics and Financial Analysis Institute, a think tank in the United States, wind, solar, and heat pump construction will help the European Union get rid of its dependence on liquefied natural gas by 2030. If the EU can achieve its goal of installing at least 4 million heat pumps, adding 75 gigawatts of photovoltaic and 22 gigawatts of wind power installed each year, natural gas demand will be reduced by about 1/4 by 2030.
According to Reuters, the European Union believes that cheap and stable electricity guarantees are the foundation of the era of artificial intelligence. Currently, the United States owns more than half of the world's data centers, China accounts for about 30%, and Europe only accounts for 12%. If electricity prices cannot be lowered, it will be difficult for Europe to compete with China and the United States.
The real 'electricity country' is China
"Since the outbreak of the Russia-Ukraine conflict, the European mainland has replaced long-term oil and natural gas pipeline transportation with expensive imported U.S. liquefied natural gas, which has a profound economic impact." Reuters reported that due to the drag of high energy prices on chemical, fertilizer, aluminum, steel, cement, paper and other industries, the industrial development has slowed down for a long time, and the European economic growth has lagged behind most of the world since 2023.
However, there are still many challenges that urgently need to be addressed in Europe, which is planning a 'power continent'. Reuters reported that the EU's electrification plan still has a long road and obstacles before it can be implemented. Firstly, the plan is currently only a communication document rather than a legislative text; Secondly, the cost of electricity in EU countries is much higher than that of natural gas, with the cost of electricity for businesses reaching three times that of natural gas. The electricity tax in countries such as Germany and Italy is also three times that of natural gas. The primary goal of the European Union is to reduce electricity costs. In addition, there are measures such as accelerating the construction of the power grid and canceling subsidies for fossil fuels.
However, the EU has not yet set a specific timetable and needs to take into account internal challenges - some countries, represented by Poland and Italy, are calling for relaxation of climate rules, while Nordic countries are defending climate rules.
A recent analysis report by the Oxford Economics Institute pointed out that since the outbreak of the US Israel Iran conflict in 2026, China's exports of solar panels, batteries, electric vehicles, wind turbine components, and heat pumps have significantly increased, especially in Europe, Asia, Africa, and Latin America.
The report believes that after the outbreak of the conflict, under the dual influence of advanced technology application and geopolitical changes, China has actually become the world's first "electricity country", and this position is constantly being strengthened.