Europe’s electricity prices remain significantly higher than those in many competing economies. The premium increasingly reflects not only fuel costs, but also the investment required to build a resilient, decarbonised and secure electricity system. The report examines how this structural challenge affects inflation, industrial competitiveness and growth, while highlighting the investment opportunities emerging from grids, storage, electrification and climate-resilient infrastructure.
Key takeaways
- Europe’s electricity premium is becoming structural: Europe’s electricity price gap reflects resilience, decarbonisation and infrastructure costs, alongside exposure to weather volatility and geopolitical shocks.
- Higher power costs are a competitiveness issue: Elevated and volatile electricity prices can affect inflation, industrial investment, productivity and the attractiveness of Europe as a manufacturing base.
- Infrastructure investment is central to the solution: Reducing the premium will require investment in grids, storage, interconnection, flexibility, digitalisation and climate adaptation.
- A multi-year investment theme is emerging: Potential beneficiaries include regulated networks, grid technology, battery storage, energy management, automation and resilient infrastructure providers.
Sector implications
Potential beneficiaries 
- – Regulated networks
- – Grid technology
- – Battery storage
- – Energy management
- – Climate adaptation
Potentially challenged
- – Chemicals
- – Steel & aluminium
- – Cement & glass
- – Paper
- – Fertilisers
Our view
The key question is not whether Europe’s electricity price premium disappears entirely, but whether planned investment in grids, storage, flexibility and low-carbon generation can narrow the competitiveness gap over time.
