Why Europe's push for energy sovereignty could fail at the last mile

Europe’s energy security is under threat. The fallout from the ongoing conflict in the Middle East is once again exposing the fragility of our energy system, and households, businesses and communities are paying the price.

This is not our first wake-up call. Anybody who’s paid an energy bill since 2022 will be familiar with the vulnerability that came with our reliance on Russian natural gas. The price spikes, supply disruptions, and emergency policy measures we’ve seen across Europe since then are symbolic of a system that has, for too long, prioritised short-term efficiency over long-term resilience.

But as the war rages on, the message is finally getting through. In recent weeks, leaders across the continent have called for a reduction in our reliance on foreign energy and the expansion of our own renewable generation capacity.

Their instincts aren’t wrong. Accelerating renewables deployment is an economic, environmental and strategic imperative. But shifting to a sovereign energy system is about more than building wind farms. As the scramble for sovereignty continues apace, it’s increasingly clear that generation alone is not the problem.

The state of Europe’s energy infrastructure

Our energy networks aren’t cut out to cope with the enormous pressure that an increase in generation capacity would bring. More than 40% of Europe’s distribution grids are over 40 years old. Designed and built to power centralised, fossil-fuelled economies, these networks can’t keep up with the realities of today’s decentralised, electrified systems.

We’re already seeing the consequences. Across Europe, thousands of renewable energy projects are languishing in connection queues, because we simply don’t have the capacity to bring them online.

At the same time, European states are falling over each other in the race to roll out new, power-hungry data centres, with little attention given to how our ailing energy systems will service their enormous demand.

Many of these projects are being funded and deployed by US entities, raising serious questions about European sovereignty over data processing and compute power. Amongst rising geopolitical instability, calls to prioritise grid connections for ‘local’ data centres over those backed by foreign investors are understandably growing.

Whoever is behind them, there’s a real risk that these critical projects could be hamstrung by the state of our ageing energy grid. True sovereignty will only be achieved if we address these issues and treat grid modernisation with the same urgency as renewable generation and data centre development.

Modernising the grid

Bolstering the grid of course means investing in physical upgrades like expanding our distribution network, building new transmission lines, and installing interconnectors.

But building new infrastructure is seldom popular with those who live near it, and laborious permitting, design and construction processes are incredibly time and capital intensive. While these upgrades must form part of our strategy, they can’t be the only solution.

This is where technology has a critical role to play. New tools such as physics-enabled digital modelling can give utilities and infrastructure providers unprecedented insights into the health of their networks, leading to faster design and planning, and supporting real-time decision-making.

At Neara, we recently used our platform to conduct a study of the UK and Ireland’s distribution networks, which found a staggering three quarters of power lines could safely carry more electricity than current operating restrictions allow.

These findings highlight the enormous potential for new technologies to help us extract more from existing infrastructure. Pinpointing and harnessing additional capacity is critical to cutting connection queues and facilitating Europe’s transition to a sovereign, renewable energy system.

Modernising the grid isn’t just about capacity. Energy networks are increasingly becoming a major target for hostile actors, and the threat is not just physical. As grids become ever more digitised, utilities are increasingly forced to defend against cyberattacks on critical infrastructure. With this in mind, it’s crucial that security is embedded into every level of grid design and maintenance. New tech like digital monitoring and AI-powered detection systems can play a crucial role in helping decision-makers respond to threats, safeguard assets, and defend the grid against attacks.

A watershed moment for investment in the sector?

Despite enormous potential across the sector, some are concerned that investment in the technology that will power Europe’s energy transition shows signs of waning. Global uncertainty, drying capital flows, and shifting political priorities appear to be creating a more cautious funding environment. If the last few weeks show us anything, it’s that such hesitation is short-sighted.

Moments of immense geopolitical disruption have often served as catalysts for industrial change. Today’s push for energy sovereignty could have a similar effect: forcing governments, investors, and utilities to confront the deep structural barriers that lie in the way of secure, sustainable energy.

For innovators, this is an enormous opportunity. The next phase of the scramble for sovereignty will be defined not by the scale of generation or data centre deployment, but by the intelligence, flexibility and resilience of the systems by which these are underpinned. Technologies that enable faster deployment, reliable connections, and resilient networks will be central to securing our energy future.