Europe now has €1.6tn reasons to double down on renewables

Europe’s energy transition is talked about, rightly, as a climate obligation. But that framing only tells half the story. At its core, this is equally about economic strength, energy security and the future of European industry.

And yet the same objections to renewables keep surfacing. Projects may be cheap to build, the argument goes, but once you factor in the full system – grids, storage, backup capacity – the economics fall apart. It’s a fair challenge. It deserves a serious answer.

A system-wide study from WindEurope, produced with Hitachi Energy late last year, provides one. It models the entire European energy system through to net zero, including all the infrastructure needed to keep power secure and reliable. The conclusion is unambiguous: even after accounting for full system costs, a renewables-led pathway remains the lowest-cost route to net zero.

The cost of going slow

The most striking finding is what the study reveals about the price of inaction. When Europe moves too slowly and misses climate targets, the cumulative cost rises by as much as €1.6 trillion by 2050. This is not a distant warning – by 2035, the savings from moving faster are already material.

Fresh analysis from the Renewable Energy Association reinforces the point from a UK perspective. The REA finds that renewable electricity is set to become the clear economic winner over fossil gas before the end of the decade – even after accounting for full system costs including grid upgrades, storage and balancing. Despite higher upfront investment, the clean power pathway saves significant money over time by curbing costly gas imports.

Put simply: Europe – and Britain – can invest now to build an affordable, secure energy system, or pay considerably more later for prolonged dependence on imported fuels.

Felt in every bill, every factory, every forecourt

That €1.6 trillion figure is not abstract. It translates into real pressure on households, manufacturers, data centres and energy-intensive industries competing globally. For them, stable energy prices are not a nice-to-have. They are a condition of survival.

The transition is also inseparable from energy security. Europe has seen in real time what dependency looks like when markets tighten and geopolitics shifts. Wind and sun cannot be embargoed. A slower transition keeps that vulnerability in place – and politicians and the public understand this more viscerally than they did five years ago.

So the question is no longer whether renewables can form the backbone of a net zero economy. The question is whether Europe will remove the bottlenecks that are slowing the transition down and pushing costs up.

A delivery problem, not a technology problem

Europe does not have a technology problem. It has a delivery problem.

Grid infrastructure has become the central constraint on decarbonisation. Without a step change in network planning and investment, viable renewable projects will continue to be delayed or stranded – not because the power is too expensive, but because the system cannot absorb it fast enough. This is not a technical inconvenience. It is a strategic failure in the making.

Removing the bottlenecks

Permitting remains the other major challenge. In Germany, classifying renewables as being in the overriding public interest has driven a sharp increase in development. Gains elsewhere will only materialise if member states apply similar approaches consistently. Faster permitting is not about cutting corners – it is about creating predictable outcomes for communities, authorities and investors.

Investment frameworks must do more to reduce risk. Stable, two-sided Contract for Difference pipelines remain one of the most effective tools Europe has to support deployment at scale. When policy becomes uncertain, the cost of capital rises – and that cost finds its way into bills and industrial competitiveness. Electrification policy needs to become more credible too, with electricity freed from non-energy taxes that undermine the economics of clean power.

Finally, Europe’s wind supply chain must be treated as a strategic asset – anchoring jobs, value creation and resilience inside Europe, and ensuring Europe captures the industrial benefit of the transition it is building.

The prize

There is no upside to lowering ambitions on renewable buildout. The idea that slowing down is the pragmatic choice falls apart the moment you look at the system-wide economics. The cost of delay runs into hundreds of billions – and ultimately up to €1.6 trillion.

A renewables-based energy system is not only essential for the climate. It is the most cost-effective, secure and resilient way to power Europe’s future. The evidence is in and the prize is enormous. Now Europe needs to match it with delivery – faster, at scale, and with the infrastructure and policy frameworks that make the transition genuinely investable.

Eduardo Medina is CEO of RES Group and also sits on the Board of WindEurope