The Tipping Point: How Europe's Power Revolution Rewrites the Rules for Danish Business

A Historic Milestone in 2025 Signals Fundamental Shifts in Energy Economics, Competitive Dynamics, and Strategic Planning

January 22, 2026

History doesn't often announce itself with such clarity. We tend to recognize pivotal moments only in hindsight, when the dust has settled and the implications have fully unfolded. But occasionally, the data arrives with such unmistakable force that we know immediately we're witnessing something genuinely transformative. The European Electricity Review 2026, published today by the energy think tank Ember, delivers exactly such a moment.

For the first time in the history of the European Union's electricity system, wind and solar power generated more electricity than all fossil fuels combined in 2025. Read that sentence again, because its implications ripple through every aspect of how we think about energy, industry, competitiveness, and Europe's economic future. Wind and solar reached 30.1% of EU electricity generation, edging past fossil fuels at 29.0%. This isn't a projection or a target, it's what actually happened last year across the 27-nation bloc.

For Danish businesses operating in what is increasingly a renewable-powered European economy, this milestone represents far more than an environmental achievement to be celebrated at climate conferences. It signals a fundamental rewiring of the competitive landscape, a shift in the economics of industrial location, and a transformation in how smart companies think about energy strategy, supply chain resilience, and long-term planning.

This isn't your typical energy transition story about distant targets and aspirational scenarios. This is about understanding how the European business environment has already changed in ways that create both enormous opportunities and genuine risks for companies that don't adapt their strategies accordingly. Whether you're manufacturing components for the renewable energy sector, running energy-intensive industrial processes, developing real estate, or providing services to businesses across Europe, the power system transformation documented in this report affects your competitive position in ways that deserve serious strategic attention.

The Numbers That Changed Everything

Let's start with the raw data that defines this watershed moment, because the numbers themselves tell a remarkable story of how quickly fundamental systems can transform when technology economics, policy support, and market dynamics align.

Wind and solar generated 841 terawatt-hours (TWh) of electricity across the EU in 2025, accounting for 30.1% of total generation. All fossil fuel sources combined, coal, gas, and oil, generated 809 TWh, representing 29.0% of the total. The margin isn't enormous, but the direction is unmistakable and the momentum is accelerating.

To appreciate how dramatic this shift has been, consider the trajectory. Just five years ago in 2020, wind and solar accounted for 19.7% of EU electricity while fossil fuels represented 36.7%. In half a decade, wind and solar grew by more than 10 percentage points while fossil fuels declined by nearly 8 percentage points. This isn't gradual evolution—it's a phase shift in the fundamental composition of Europe's power system.

Solar power deserves particular attention for its starring role in this milestone. EU solar generation reached a record 369 TWh in 2025, growing by 20.1% compared to 2024—the fourth consecutive year of 20%+ annual growth. This is an increase of 62 TWh in a single year, equivalent to adding the annual electricity production of three French nuclear power plants. Over the past five years, solar generation has more than doubled, growing from 145 TWh in 2020 to 369 TWh in 2025, representing an average annual growth rate of 21%.

Put differently: solar power grew more in the past five years than any other electricity source in European history, and it's showing no signs of slowing down. Every single EU country saw solar generation increase in 2025. In Hungary, Cyprus, Greece, Spain, and the Netherlands, solar now provides more than 20% of total electricity—more than double the global average.

Wind power, despite experiencing a challenging first quarter of 2025 due to unusually calm conditions, remained the EU's second-largest electricity source at 16.9% of total generation, producing more power than gas (16.7%). The wind sector added 5.3 GW of new capacity in the first half of 2025 alone, demonstrating continued strong growth even as the technology matures.

Together, these two variable renewable sources have become the backbone of the European power system in a remarkably short timeframe. In 14 of the 27 EU countries, wind and solar combined now generate more electricity than all fossil sources. Two countries, the Netherlands and Croatia, crossed this threshold for the first time in 2025, and several others including Greece, Bulgaria, and Slovenia are on the cusp.

For Danish businesses, these aren't abstract statistics. They represent a fundamentally different power system than existed even five years ago, with profoundly different economics, price dynamics, and strategic implications.

Perspective One: Energy Security Through Homegrown Resources

Let's examine the first critical lens through which Danish businesses should view this transformation: energy security and supply chain resilience. The shift from imported fossil fuels to homegrown renewables represents one of the most significant changes in Europe's economic fundamentals in generations, with implications that extend far beyond the electricity sector.

The End of Energy Blackmail

The Ember report doesn't mince words about what's at stake: "For the EU, risks of energy blackmail from fossil fuel exporters loomed large in 2025." This isn't hypothetical concern, it's lived experience. The 2022 energy crisis, triggered by Russia's weaponization of gas supplies, cost European businesses and consumers hundreds of billions of euros and triggered an inflation spiral that reshaped the political and economic landscape.

The remarkable aspect of 2025's renewable milestone is that it occurred despite—or perhaps because of—continued geopolitical instability in energy markets. The EU agreed on legislation in December 2025 to ban imports of Russian gas by the end of 2027, a move that would have seemed impossibly risky just a few years ago. The confidence to take this step stems directly from the accelerating deployment of renewable generation that doesn't depend on supply agreements with authoritarian regimes.

But here's where the analysis gets more complex and more relevant for business strategy: the EU hasn't actually eliminated energy import dependency. It has begun shifting that dependency from one set of suppliers to another. Gas generation increased by 8% in 2025 compared to 2024, largely compensating for a 12% drop in hydro generation due to dry conditions. This increased gas use pushed the EU's fossil gas import bill up to €32 billion—16% higher than 2024 and the first annual increase since the 2022 energy crisis.

More concerning from a strategic perspective: much of the slack created by reducing Russian gas has been taken up by increased imports of liquefied natural gas (LNG) from the United States. Heavy reliance on a single alternative supplier, particularly one whose trade policy can shift dramatically with electoral cycles, creates new vulnerabilities even as old ones are addressed. As the report notes, this "threatens EU security and weakens bargaining power in geopolitical negotiations and trade disputes."

For Danish businesses, the strategic implication is clear: the path to genuine energy security runs through further acceleration of renewable deployment, not through swapping one set of import dependencies for another. Companies with high energy intensity should be modeling their long-term competitiveness under scenarios where European power becomes increasingly renewable and domestically sourced, reducing exposure to global fuel price volatility and geopolitical supply disruptions.

The Economics of Homegrown Power

There's a powerful economic logic underlying the energy security argument that deserves explicit attention. Every euro spent importing fossil fuels leaves the European economy, flowing to gas producers in the United States, Norway, Qatar, or Algeria. Every euro spent on European renewable generation, by contrast, largely stays within the European economy, paying for solar panels and wind turbines (increasingly manufactured in Europe), installation services, grid connections, maintenance, and operations.

This isn't just about where money flows. It's about where jobs are created, where innovation occurs, and where economic resilience is built. The renewable energy sector employed over 1.5 million people in the EU as of 2024, a figure that continues growing as deployment accelerates. These are largely well-paying manufacturing, engineering, and technical jobs that can't be easily offshored.

For Danish businesses specifically, this creates multiple strategic opportunities:

Supply chain positioning: Denmark's strength in wind turbine manufacturing, blade production, and offshore installation gives Danish companies natural advantages as European wind deployment continues scaling. Similarly, Danish expertise in district heating, heat pumps, and building energy efficiency positions Danish firms well for the broader electrification trend.

Cost competitiveness: Industrial facilities that can access renewable power through corporate power purchase agreements (PPAs) or locate in regions with abundant renewable generation can increasingly compete on energy costs with operations in other global regions. The marginal cost of renewable electricity is essentially zero—once built, wind and solar generate power without fuel costs. As renewable penetration increases, this fundamentally changes the economics of energy-intensive industries.

Innovation and services: The complexity of integrating variable renewable generation creates enormous demand for grid services, flexibility solutions, demand response technologies, and sophisticated energy management systems. Danish companies with expertise in these areas face expanding European markets.

The energy security perspective, properly understood, isn't primarily about geopolitics, it's about economics. Renewable energy is becoming the cheapest, most stable, and most strategically secure source of power for European industry. Companies that build strategies around this reality gain advantages over competitors that don't.

Perspective Two: The Price Dynamics Revolution

The second critical perspective for Danish businesses centers on how renewable penetration is fundamentally transforming electricity price dynamics in ways that create both opportunities and risks that require sophisticated understanding and active management.

The Divergence of Day and Night

One of the most practically significant findings in the Ember report concerns the growing divergence between electricity prices at different times of day. This isn't a minor technical detail, it's reshaping the economics of industrial operations, commercial facilities, and residential buildings across Europe.

Wholesale electricity prices increased in 21 of 27 EU countries in 2025 compared to 2024, with increases ranging from 22% in Austria to 3% in Greece. But these annual averages mask a more important story: prices during different hours of the day moved in sharply divergent directions.

During morning and evening peak demand periods, hours when gas-fired generation typically runs to meet load, prices spiked significantly. These "gas hours" saw prices 11% higher on average across the EU in 2025 compared to 2024. In Germany, electricity prices jumped by 19% during high gas-use periods.

By contrast, during midday hours when solar generation is abundant, typically between 7 AM and 4 PM, wholesale electricity prices rose by only 3% on average across the EU. In Germany, prices grew only 8% during solar-abundant hours despite the 19% increase during gas-heavy periods.

This growing intraday price spread creates fundamentally new economics for any business with significant electricity consumption. The businesses that win in this environment are those that can shift energy-intensive operations to align with renewable generation patterns.

Real-World Business Implications

Let's make this concrete with scenarios relevant to different types of Danish businesses:

Manufacturing facilities: A factory running continuous operations faces very different economics than one that can concentrate energy-intensive processes during daylight hours when solar is abundant. The ability to shift production timing, even partially, can translate to 20-30% differences in electricity costs for the same annual consumption. This isn't marginal, it can determine whether a European production facility remains competitive with operations in regions with cheaper baseline energy costs.

Cold storage and refrigeration: These operations offer natural flexibility through their thermal mass. Advanced cold storage facilities can "over-cool" during cheap solar hours, allowing compressors to run less during expensive evening peaks while maintaining required temperatures. The technology to do this exists today; the business case strengthens with every year of increasing intraday price spreads.

Data centers: Computational workloads increasingly offer flexibility in timing. Non-time-critical processing, data backups, batch processing, model training, rendering, can be scheduled for hours when renewable generation is abundant and prices are low. Danish data center operators that build this intelligence into their systems gain cost advantages over competitors running flat profiles.

Commercial buildings: Heating, cooling, and hot water heating represent major electricity demands that can be shifted in time using building thermal mass and storage systems. Smart building management systems that respond to price signals and renewable availability can dramatically reduce energy costs while improving grid stability.

Electric vehicle charging: This is perhaps the most obvious opportunity. Workplace and fleet charging can be overwhelmingly concentrated during solar-heavy daytime hours, while home charging can be incentivized during windy nighttime hours in regions with strong wind resources. The businesses that build EV strategies around renewable generation patterns will see dramatically lower operating costs than those charging during peak price periods.

The unifying theme: flexibility has become valuable in ways it never was when electricity prices were relatively flat throughout the day. The businesses that can be flexible, either in when they consume power, or in deploying storage to shift consumption in time, gain real competitive advantages.

The Battery Storage Opportunity

This brings us to one of the most forward-looking sections of the Ember report: the emerging role of battery storage in addressing price spikes and creating new business models around renewable energy.

Grid-scale battery deployment accelerated dramatically in 2025, with EU large battery capacity exceeding 10 GW, more than double the 4 GW installed just two years ago. More significantly, the pipeline of announced and permitted battery projects reached record levels, with over 40 GW of projects in development. If even a substantial fraction of this pipeline is built, battery capacity could grow tenfold from 2023 levels within just a few years.

The economics driving this acceleration are straightforward: batteries can charge during hours of abundant (cheap) renewable generation and discharge during evening peaks when gas sets high prices. In Italy, for example, solar power stored in a battery and shifted to evening hours could cost around €64/MWh, compared to the €111/MWh cost of gas generation. This price differential creates robust business cases for battery projects even before considering additional revenue from grid services.

For Danish businesses, the battery storage boom creates multiple strategic opportunities:

Direct investment: Companies with capital and suitable sites (particularly those co-located with renewable generation or near grid constraints) can invest in battery projects that generate revenue from energy arbitrage and grid services while supporting system stability.

Industrial flexibility services: Businesses with flexible loads can increasingly sell that flexibility into markets, effectively operating their facilities as "virtual batteries" that adjust consumption in response to system needs and prices.

Technology and services: Danish companies with expertise in power electronics, energy management systems, forecasting, or optimization can serve the rapidly growing battery sector across Europe.

The report offers a telling case study: Italy's grid-scale batteries grew by 40% in 2025 alone, reaching 1.9 GW, with a development pipeline of 10 GW suggesting rapid continued expansion. In September 2025, Italian batteries discharged an average of 1.1 GW during evening peak hours. That's only 3% of demand currently, but with the planned pipeline, batteries could quickly supply meaningful portions of evening demand, displacing expensive gas generation and reducing price spikes.

The comparison to California is particularly instructive. California's grid-scale battery capacity matched Italy's current level (2 GW) in 2021 but then soared to 13 GW within just four years. Italian development could follow this trajectory, and similar patterns may emerge across other EU countries. In California, batteries now routinely supply almost a fifth of evening peak demand, and the share of fossil fuels in evening demand dropped from 44% to 34% in just four years (2021-2025), while battery contribution surged from 3% to 22%.

This suggests a clear path forward for European markets: as battery deployment scales, it can progressively displace gas generation during expensive peak hours, reducing costs for all consumers while improving the business case for renewable generation.

Perspective Three: The Coal Decline and Industrial Transition

The third critical perspective concerns the end of coal and what it reveals about how major industrial transitions actually happen in practice, insights that have profound implications for how Danish businesses should think about navigating the broader energy transition.

Coal's Remarkable Collapse

Coal's decline in the EU has been nothing short of spectacular. In 2025, coal generated just 9.2% of EU electricity (257 TWh), a new historic low. To appreciate the speed of this transition: just ten years ago in 2015, coal represented nearly a quarter of EU electricity generation (24.6%), producing 705 TWh. In a single decade, coal's absolute generation fell by nearly two-thirds and its market share dropped by more than 15 percentage points.

This isn't happening because coal plants are reaching the end of their technical lifetimes and being retired as planned. It's happening because coal has become economically uncompetitive with alternatives, primarily renewables, but also gas during the transition. When carbon prices are factored in, coal is now the most expensive way to generate electricity in Europe in most hours. Plants that were built to operate for 40-50 years are being shut down after 30 years or less because running them is more expensive than alternative sources of generation.

Nineteen EU countries now have zero or less than 5% coal in their power mix, two more than in 2024. Ireland stopped burning coal in June 2025. Finland effectively phased out coal in April, ahead of the country's mid-2029 deadline, with strong wind growth filling the gap. The EU's remaining coal generation is now highly concentrated in just two countries—Germany and Poland—which account for more than 74% of EU coal generation. Even in these countries, coal fell to all-time lows in 2025.

The Gas Paradox That Wasn't

Here's what's particularly instructive about coal's decline for businesses thinking about the broader energy transition: the reduction in coal was not matched by an equal increase in gas or other fossil fuels. This directly contradicts the conventional wisdom that has shaped decades of energy policy debate.

The traditional argument against rapid coal phase-out was that it would simply be replaced by gas, swapping one fossil fuel for another without meaningful emissions reduction. The data shows this didn't happen. In each of the 22 EU countries that ever had coal in their generation mix, the reduction in coal over the last ten years was not matched by an equal increase in gas or other fossil fuels.

What actually happened: renewables, particularly wind and solar, absorbed most of the generation previously provided by coal. This wasn't inevitable; it happened because renewable deployment accelerated at precisely the time coal was declining, driven by technology cost reductions and supportive policies that made renewable investment attractive.

The lesson for Danish businesses: major industrial transitions can happen much faster than conventional wisdom suggests when economics align with policy support. Companies that base strategic planning on slow, gradual transitions risk being caught flat-footed when change accelerates.

Industrial Competitiveness in a Post-Coal Europe

Coal's rapid decline has profound implications for industrial competitiveness across Europe, particularly for energy-intensive industries. The countries and regions that are successfully transitioning away from coal while maintaining industrial competitiveness share certain characteristics:

Rapid renewable deployment: They're not just shutting coal, they're actively building renewable capacity to replace it and provide affordable power for industry.

Grid infrastructure investment: They're upgrading transmission and distribution networks to handle variable renewable generation and move power from where it's generated to where it's needed.

Flexibility deployment: They're implementing demand response, storage, and interconnections that allow the system to balance variable renewable generation.

The countries and regions that are struggling with the coal transition, by contrast, tend to be those that have shut coal without adequately replacing it with affordable alternatives, creating electricity price spikes that undermine industrial competitiveness.

For Danish businesses with operations or investment decisions across Europe, this pattern should inform location strategy. The regions that will offer the most competitive and stable electricity costs in the 2030s are those investing most aggressively in renewable generation and grid flexibility today, not necessarily those with the lowest costs currently.

The Gas Challenge: Europe's Unfinished Business

While celebrating the renewable milestone is appropriate, the Ember report is clear-eyed about Europe's continued vulnerability to fossil gas, a dependency that increased rather than decreased in 2025 and represents the most significant remaining challenge in the power sector transition.

Why Gas Increased Despite Renewable Growth

Gas generation rose 8% in 2025 compared to 2024, an increase of 34 TWh. This might seem surprising given the record renewable deployment, but the explanation reveals important system dynamics.

The primary driver was weather: 2025 started with unusually warm temperatures over the North Atlantic, leading to drier and less windy conditions across Northern Europe in the first quarter. Cumulative rainfall was 33% lower and average wind speeds fell 23% in January-March compared to the five-year average. This reduced both hydro generation (down 12% for the full year) and wind generation (down 2% despite fleet growth).

When the variables that typically balance the European grid, wind and hydro, under-performed due to weather, the system turned to dispatchable generation to fill the gap. With nuclear largely fixed and coal in terminal decline, that meant gas. Germany provides a telling example: the hours with the largest increase in gas generation coincided with the biggest fall in domestic hydro generation and reduced imports from France, Switzerland, and Austria, all experiencing similar hydro declines.

Spain saw gas increases for additional reasons. Following the Iberian blackout in April 2025, there was increased use of gas power plants for grid services like voltage control, at least temporarily. However, rule changes approved in June 2025 will allow generators other than gas plants to participate in voltage control services starting January 2026, addressing this issue going forward.

The critical insight: in the current European power system, gas remains the marginal source of generation that balances the system when weather reduces renewable output. Until sufficient alternative flexibility is deployed, batteries, demand response, improved interconnections, expanded storage, the system will remain dependent on gas as a backup.

The €32 Billion Question

The 8% increase in gas generation, combined with gas prices that were 5.6% higher in 2025 than 2024, resulted in the EU spending €32 billion to import fossil gas for power generation, 16% more than in 2024. This is the first annual increase in the EU gas import bill since the 2022 energy crisis.

For context: €32 billion is roughly equivalent to Denmark's entire annual defense budget or about 1.5% of Germany's GDP. It's money flowing out of Europe to gas producers abroad rather than staying in European economies. And it represents vulnerability to future price spikes and supply disruptions.

Italy and Germany paid the most, reflecting their large economies and gas dependence, but 15 of 27 EU countries saw gas generation increases. The countries most affected were those with the largest declines in hydro generation and those with limited alternative flexibility resources.

For Danish businesses, the gas dependency issue matters for several reasons:

Price volatility: As long as gas sets marginal prices during significant hours, wholesale electricity prices will remain exposed to gas market volatility and geopolitical events affecting gas supply.

Emissions intensity: Companies with carbon reduction commitments or exposure to carbon pricing can't fully decarbonize their electricity consumption while grid average emissions remain elevated by gas generation.

Energy security: Continued gas dependence means continued exposure to supply disruptions and energy blackmail, risks that could materialized suddenly and severely as 2022 demonstrated.

The path forward is clear in principle but challenging in execution: deploy the flexibility resources, batteries, demand response, interconnections, and additional renewable capacity, needed to reduce reliance on gas as the system's swing source. This will take sustained investment and policy support, but the economics are increasingly favorable and the strategic imperative is obvious.

What This Means for Danish Businesses: Strategic Implications

Having examined three major perspectives on Europe's power transition, energy security, price dynamics, and the industrial transition, let's synthesize the strategic implications for Danish businesses operating in this rapidly evolving environment.

Rethink Energy Strategy from First Principles

The power system that will prevail in Europe by 2030 will be fundamentally different from the one that existed in 2020 in ways that require businesses to rethink energy strategy from the ground up rather than making marginal adjustments to existing approaches.

Question inherited assumptions: Many corporate energy strategies are built on assumptions that no longer hold, that baseload generation dominates, that prices are relatively stable throughout the day, that fossil fuels will remain the marginal source indefinitely. These assumptions are increasingly obsolete.

Model multiple scenarios: The pace of change in power systems means that deterministic forecasts are essentially useless. Instead, businesses need scenario planning that considers different rates of renewable deployment, battery scaling, policy evolution, and technology cost trajectories.

Value optionality: In a rapidly changing environment, strategies that preserve optionality and flexibility are more valuable than those that lock in rigid commitments. This might mean shorter-term power purchase agreements with flexibility provisions, modular investments in on-site generation and storage that can be scaled based on experience, and operational practices that can adjust to changing price signals.

Embrace Flexibility as a Strategic Asset

The single most important strategic insight from the renewable power transition is that flexibility, the ability to adjust when and how you consume electricity, is becoming enormously valuable and will only become more so as variable renewables grow.

Audit flexibility opportunities: Every business should conduct a systematic audit of where flexibility exists in its operations. When can energy-intensive processes be scheduled? What thermal or other storage could be deployed? Which loads could respond to price signals? The answers may surprise you.

Invest in enabling technologies: Smart meters, building management systems, industrial control systems, and energy management platforms that enable flexible operation aren't costs, they're investments that directly improve competitiveness in a high-renewable power system.

Participate in flexibility markets: Many European markets now offer payments for demand response, frequency regulation, and other grid services. Businesses with suitable loads can generate revenue from flexibility while contributing to system stability.

Design new facilities for flexibility: When building new facilities or conducting major renovations, design for flexibility from the beginning. This might mean oversized equipment that can run intensively during off-peak hours, thermal storage integrated into building systems, or production processes designed for interrupted operation.

Evaluate Renewable Integration Opportunities

For many Danish businesses, active participation in renewable energy generation rather than passive consumption represents strategic opportunity.

On-site solar: Rooftop and ground-mounted solar at business facilities offers not just emissions reduction but genuine cost savings and price hedging. Danish solar resources, while not as strong as Southern Europe, are sufficient to make well-designed systems economically attractive, particularly for businesses with daytime electricity demand that aligns with solar generation.

Corporate PPAs: Power purchase agreements directly with renewable generators allow large electricity consumers to lock in long-term prices, hedge against fossil fuel volatility, and support new renewable development. The PPA market in Europe has matured significantly, and structures exist to suit different business needs and risk profiles.

Community energy participation: Businesses can participate in community wind or solar projects, combining price benefits with local engagement and stakeholder relations.

Behind-the-meter storage: For businesses with both on-site generation and significant time-of-use price variability, battery storage that can shift solar generation to evening consumption may increasingly make economic sense.

Consider Location Strategy Through an Energy Lens

For businesses making location decisions for new facilities or evaluating existing operations, the power system transition should factor explicitly into the analysis:

Grid renewable intensity: Regions with high renewable penetration offer lower-carbon electricity and often lower average prices. Nordic countries, Spain, Portugal, and increasingly Germany lead in renewable deployment.

Price stability: Regions with diverse renewable generation (both wind and solar), good interconnections, and flexible resources tend to have more stable prices than those heavily dependent on a single source or heavily reliant on gas.

Regulatory environment: Countries with clear, stable renewable energy policies and supportive frameworks for flexibility provide more certainty for long-term business planning than those with inconsistent or retrograde policies.

Access to corporate PPAs: The sophistication and liquidity of corporate PPA markets varies across Europe. Businesses for whom direct renewable procurement is important should factor this into location decisions.

Prepare for Continued Rapid Change

Perhaps the most important strategic insight is simply that the pace of change in European power systems is far faster than most businesses have built into their planning processes.

Solar generation has grown 21% annually for five years. Battery deployment grew by 150% in two years. Coal collapsed by two-thirds in a decade. These aren't marginal changes that can be accommodated with incremental adjustments—they're transformational shifts that require businesses to build adaptive capacity into their organizations.

Shorten planning horizons: Ten-year strategic energy plans made sense when power systems changed slowly. In the current environment, three-to-five-year plans with annual reviews are more appropriate.

Build internal expertise: The businesses that navigate the energy transition successfully are those that build genuine internal expertise rather than relying entirely on consultants or utilities to tell them what to do. This doesn't mean every company needs energy PhDs on staff, but it does mean having people who understand power markets, technology options, and regulatory developments.

Engage in policy processes: The evolution of renewable energy policy, grid regulation, market design, and carbon pricing will shape business outcomes. Companies that engage constructively in these processes, directly or through trade associations, can help shape frameworks that support both sustainability and competitiveness.

The Danish Advantage: Why This Transition Favors Danish Industry

While the European power transition creates challenges for all businesses, Danish companies enter this new era with distinct advantages that deserve explicit recognition and strategic leverage.

Technology Leadership

Denmark's historical leadership in wind energy technology isn't just a matter of national pride, it's a genuine commercial advantage as wind deployment continues scaling across Europe and globally. Danish companies like Vestas, Ørsted, and the extensive supply chain supporting them are positioned at the center of massive ongoing investment.

But the Danish advantage extends beyond wind. Expertise in district heating systems, combined heat and power, heat pumps, and building energy efficiency positions Danish companies well for the broader electrification trend that will accompany the power sector transition. As European countries work to electrify heating—currently dominated by gas—Danish solutions and expertise will be in high demand.

Market Understanding

Denmark's early and aggressive deployment of renewable energy means Danish businesses have decades of experience operating in high-renewable power systems. The challenges that other European countries are beginning to encounter, managing variable generation, integrating distributed resources, balancing renewable-heavy grids, are challenges Danish companies and Danish society have been navigating for years.

This experience has value. Danish businesses understand renewable energy economics, Danish engineers know how to integrate variable generation, and Danish policymakers have learned through trial and error what frameworks support renewable deployment while maintaining reliability and affordability. This accumulated knowledge can be exported as service and expertise to markets following Denmark's path.

Flexibility Culture

Denmark's power system has long required flexibility to accommodate high wind penetration. This has created a business culture and technical ecosystem oriented toward flexible operation, demand response, and sophisticated energy management—capabilities that will become increasingly valuable across Europe.

Danish companies used to adjusting operations based on wind availability or participating in flexibility markets have competitive advantages over companies from regions where baseload coal or nuclear dominated and flexibility was never valued. As European power systems become more variable, this Danish experience becomes more valuable.

Green Competitiveness

For businesses selling into markets where sustainability credentials matter, which increasingly includes both consumer markets and B2B supply chains, operations powered by renewable electricity offer genuine differentiation. Denmark's renewable energy success story provides credibility and marketing value.

Products manufactured in Denmark using Danish renewable energy can credibly claim among the lowest carbon footprints in global manufacturing. As carbon border adjustments and supply chain emissions requirements tighten, this advantage grows.

Looking Forward: The 2030 Trajectory

The Ember report documents where European power systems stood at the end of 2025, but the trajectory forward is equally important for business planning. Let's examine what the data suggests about the remainder of the decade.

Solar's Continued Acceleration

Solar growth showed no signs of slowing in 2025, and multiple factors suggest continued rapid expansion:

Economics: Solar costs continue declining, with utility-scale solar now the cheapest source of new electricity generation in most of Europe. Each year of cost reduction makes solar more attractive relative to alternatives.

Technology improvement: Solar panel efficiency continues improving, increasing the output from the same rooftop or land area. Bifacial panels, tracking systems, and improved inverters squeeze more generation from existing installations.

Policy support: While less generous than past feed-in tariffs, European renewable energy policies still strongly favor solar deployment through various mechanisms. The REPowerEU plan explicitly targets accelerated renewable deployment.

Behind-the-meter economics: Rooftop solar combined with storage is increasingly attractive for businesses and households as retail electricity prices remain elevated. This distributed deployment doesn't require the same complex permitting as utility-scale projects and can scale rapidly.

If solar continues growing at even half its recent rate, 10% annually instead of 20%, it would exceed 450 TWh by 2030, representing nearly 16% of EU electricity. More aggressive scenarios suggest solar could reach 20% of EU power or higher by decade's end.

For businesses, this means planning for a power system where midday wholesale prices are routinely very low or even negative during sunny periods, while evening prices remain elevated until sufficient storage is deployed. The value of generation shifting and flexibility will continue growing.

Battery Storage Reaches Critical Mass

If the current battery development pipeline is even partially realized, EU grid-scale battery capacity could reach 40 GW or higher by 2028-2030, nearly a tenfold increase from 2023 levels. This would fundamentally change system economics and price dynamics.

With sufficient battery deployment:

Evening price spikes moderate: As batteries discharge during peak demand periods, they limit the extent to which gas generators can set high prices, reducing the spread between midday lows and evening highs.

Renewable curtailment decreases: Rather than wasting solar and wind generation during periods of oversupply, batteries can capture and time-shift that energy, improving system economics.

Grid stability improves: Batteries providing frequency response and other grid services reduce the need for thermal plants operating in reserve, cutting costs and emissions.

Market opportunities emerge: The battery deployment boom creates business opportunities in manufacturing, installation, operation, and the sophisticated software systems required to optimize battery operation.

For businesses planning facilities or major investments in the late 2020s, assume battery storage will be a mature, widely deployed technology providing meaningful system flexibility, a very different assumption than would have been reasonable even five years ago.

The Gas Inflection Point

The continued increase in gas generation in 2025 represents a near-term setback, but the trajectory beyond 2025 looks more favorable for displacement. Several factors suggest gas use in power generation may have peaked or be very close to peaking:

Renewable additions: With solar growing 20%+ annually and wind deployment continuing, each year adds substantial zero-marginal-cost generation that displaces fossil fuels.

Battery acceleration: As discussed, battery deployment is entering a rapid growth phase that will directly compete with and displace gas peaking generation.

Demand response maturation: Smart charging of electric vehicles, flexible industrial loads, and building systems responding to price signals provide additional alternatives to gas for system balancing.

Policy pressure: Carbon prices continue rising under the EU Emissions Trading System, making gas generation increasingly expensive. Regulatory pressure to eliminate unabated fossil generation intensifies.

Technology maturation: Long-duration energy storage technologies beyond lithium-ion batteries, including hydrogen, compressed air, and thermal storage, are approaching commercial viability for seasonal storage.

The combination suggests that while gas may not decline steadily year-over-year (weather variability will create fluctuations), the overall trajectory points toward progressive displacement. By 2030, gas likely represents 12-15% of EU electricity rather than the 16.7% it reached in 2025.

For businesses, this implies progressively reducing exposure to gas price volatility, both by hedging existing exposure and by developing operational flexibility that reduces dependence on gas-heavy hours.

The Policy Environment: What's Coming Next

Understanding the policy environment is essential for business planning, as renewable deployment, grid infrastructure, and market design don't happen spontaneously, they're shaped by regulatory frameworks and policy decisions.

The Grids Package and Infrastructure Investment

The European Commission's proposed Grids Package, currently working through the legislative process, aims to accelerate permitting for cross-border transmission lines and strengthen the EU power grid. This matters for businesses because:

Reduced price divergence: Better interconnections smooth price differences between countries, reducing the extreme price events that occur when regional renewable output is low and imports are limited.

Improved reliability: Stronger grids make the system more resilient to individual component failures or regional generation shortfalls.

Renewable integration: Grid constraints currently limit renewable deployment in some regions. Infrastructure upgrades unlock additional renewable capacity.

While the specific policies will evolve, the direction is clear: significant public and private investment in grid infrastructure will continue throughout the decade. Businesses operating across Europe should expect better interconnected and more capable power grids in 2030 than exist today.

The Electrification Action Plan

The forthcoming Electrification Action Plan from the European Commission will aim to accelerate the electrification of transport, heating, and industry—all of which have profound implications for power sector development and business strategy.

Transport electrification: Expanding EV adoption creates new electricity demand but also massive potential flexibility, as vehicle charging can be scheduled to align with renewable generation. Businesses operating vehicle fleets should prepare for rapid electrification and consider how smart charging strategies can reduce costs.

Heat pump deployment: Replacing gas boilers with electric heat pumps in buildings drives electricity demand but eliminates direct fossil fuel use. Commercial and industrial facilities should evaluate heat pump opportunities, particularly in countries offering subsidies or tax incentives.

Industrial electrification: High-temperature industrial processes currently dependent on fossil fuels are increasingly considering electric alternatives. While this transition will take time, businesses in energy-intensive industries should monitor technology development and pilot opportunities.

All of this creates additional electricity demand, estimates suggest electrification could increase EU power demand by 15-25% by 2030, but also creates flexibility opportunities if implemented intelligently. Businesses that participate actively in electrification while building in flexibility will outperform those that treat electrification as a passive compliance exercise.

Carbon Pricing Evolution

The EU Emissions Trading System (ETS) will continue tightening, with the carbon price cap increasing and free allowances phasing out for many sectors. This affects power sector economics directly—higher carbon prices make fossil generation more expensive relative to renewables—but also creates pressures throughout industrial value chains.

For businesses:

Account for rising carbon costs: Strategic planning should assume carbon prices of €100-150/tonne by 2030, with possible spikes higher during supply crunches.

Evaluate carbon exposure: Understand where carbon costs appear in your value chain—not just direct emissions but embedded emissions in purchased electricity, materials, and services.

Consider carbon advantage: For businesses that successfully decarbonize, carbon pricing creates competitive advantage over slower-moving competitors, particularly in industries where carbon costs become significant.

State Aid and Support Mechanisms

Despite the economic competitiveness of renewables, various support mechanisms remain in place and will continue, though their form is evolving:

Contract for Difference schemes: Many countries use CfD auctions to support renewable deployment, providing revenue certainty for generators while protecting consumers from high prices.

Grid connection support: Recognizing that grid connections can be a bottleneck, some countries are streamlining processes and offering support for connection costs.

Battery deployment incentives: Various national schemes incentivize battery storage deployment, recognizing its system value.

Businesses should monitor national support schemes in countries where they operate or might invest, as these can significantly affect project economics for renewable generation, storage, or demand flexibility.

Conclusion: Navigating the New Normal

The European power system has reached a historic tipping point, with wind and solar generating more electricity than fossil fuels for the first time in 2025. This isn't the end of the transition, it's more accurately the end of the beginning. The journey from 30% wind and solar to 50%, 70%, or even higher requires continued sustained effort, investment, and innovation.

But the direction is unmistakable, the momentum is strong, and the implications for European business are profound. Companies that understand this transformation and adapt their strategies accordingly will thrive in a European economy powered increasingly by homegrown renewable energy. Those that treat the power system transition as someone else's problem, something happening in the background that doesn't require strategic response, risk waking up in five years to discover they're operating with outdated business models in a fundamentally changed competitive environment.

For Danish businesses, this moment offers particular opportunity. Denmark's decades of experience with high renewable penetration, its technology leadership in wind energy and broader energy solutions, and its culture of flexibility and adaptation position Danish companies well for a European market that is rapidly coming to resemble the Danish power system writ large.

The data is clear, the trajectory is established, and the implications are far-reaching. The only question is how quickly and how effectively individual businesses will adapt to the new reality of European power. The companies making those adaptations now, rethinking energy strategy, investing in flexibility, deploying renewable generation, and building expertise, are positioning themselves for sustained competitive advantage in the European economy of the 2030s.

The tipping point has been reached. The transition continues. And the opportunity is substantial for those prepared to seize it.

This analysis is based on the European Electricity Review 2026 published by Ember on January 22, 2026. Additional context draws from Eurostat energy statistics, ENTSO-E transparency data, and European Commission policy documents.