Deindustrialisation has already seen manufacturing production decline in many European countries, with recent plant closures announced in multiple sectors. For example, Nyrstar suspended operations at its Buden zinc facility in the Netherlands in early 2024, BASF has shut several chemical production lines in Germany, steelmaker ArcelorMittal plans to close two facilities in France, while Audi ended automobile production at its Brussels plant at the end of February 2025.

Demonstrating the scale of the challenge, we calculate that European wholesale electricity prices were €80/MWh in 2024, compared to €55/MWh in the US and €60/MWh in China. The gap in wholesale gas prices is even greater, from just €5.9/MWh in the US, to €32/MWh in Europe, although China’s average wholesale gas price is close to the European figure.

Given that energy-intensive industries are responsible for around 9% of total industrial employment and that they have a high multiplier effect on other sectors, a shift in production from Europe would have fundamental economic, social and energy impacts across the continent. It would also have profound implications for energy companies operating across the energy value chain, from energy generators to distributors to retailers.

Energy companies as catalysts for resilience
However, energy companies could dramatically reduce the risk of deindustrialisation by supporting the transition to a more competitive and sustainable industrial landscape. A massive electrification of EU industries and networks is needed to provide access to locally produced decarbonised energy, which would reduce the EU’s energy dependence and improve European competitiveness. Generation companies, network operators and retailers must therefore go beyond energy provision to act as architects and lobbyists of a competitive industrial future.

This requires a focus on four key areas – innovative pricing models, operational efficiencies, technology innovation, and market design and innovation. Some of these are already in development, while others still need to be activated.

Generation companies
By investing in vast expanses of renewable energy infrastructure, generation companies can harness the sun, the wind and other abundant resources to deliver cost-effective power, particularly in conjunction with battery storage and the integration of green hydrogen. This shift reduces dependence on volatile fossil fuels and positions them as champions of price stability, offering long-term power purchase agreements that give industries the predictability they crave.

Network operators
Meanwhile, transmission network operators and distribution network operators must reimagine the grids that bind Europe’s industrial landscapes, for example by urgently deploying smart grids equipped with advanced metering and automated controls. Networks must become flexibility enablers, allowing industries to dynamically manage their energy consumption and reduce costs during peaks.

In addition, strategic investments in industrial energy hubs (shared zones of renewable generation and hydrogen storage) would offer a vision of localised, efficient power tailored to meet industrial demands while reducing systemic losses.

Energy retailers
Finally, energy retailers must extend their role beyond simple transactions – they must become partners in innovation. For example, by crafting bespoke contracts (including time-of-use pricing and flexibility incentives), they can encourage industries to align their consumption with grid capacities, sharing the benefits of optimised energy use. Retailers can also guide industries along the path to decarbonisation, offering tailored solutions that blend electrification initiatives with tangible incentives, such as reduced tariffs or access to green financing.

At the same time, the energy sector should engage with government and regulators to gain their support. This includes advocating for policies that align energy and industrial strategies, such as subsidies for energy-intensive industries that are transitioning to low-carbon processes, and working with governments to implement carbon border adjustment mechanisms to level the playing field with global competitors.

Generation companies, network operators and retailers must therefore go beyond energy provision to act as architects and lobbyists of a competitive industrial future.

Uniting for transformation
The stakes are high, but the rewards could be transformative. It is critical for all energy players to work together on the challenges European industry faces, along with the solutions required. This will involve collaboration with governments, regulators and industries themselves to create a long-term vision that builds the infrastructure investments and incentives needed to enhance industrial resilience. This will require:

• A long-term vision – temporary measures like subsidies won’t suffice; systemic solutions and infrastructure investments are essential to mitigate Europe’s energy challenges and enhance industrial resilience. Governments, regulators and industries must collaborate with energy companies to ensure incentives that support industrial resilience.
• Proactive positioning – energy companies have a unique opportunity to lead by driving innovations, advocating for regulatory adjustments and enabling a shift toward renewable energy while maintaining competitiveness.
• Urgency to adapt – industries must integrate energy strategies into broader business decisions, prioritise sustainability and proactively adapt to the shifting energy landscape.
• Industrial partnerships – building closer ties with industrial clients and codeveloping customised energy solutions can differentiate businesses and create mutual value. To secure their own future, energy companies need to embark on a joint journey with industries.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘Eurovision: the path towards an electrified, decarbonised, Europe’. European energy trade association Eurelectric has a vision of future European industry that is electrified and decarbonised; however, there are a number of potential obstacles along the way.
• Former Italian Prime Minister and European Central Bank Chief Mario Draghi’s much-anticipated report on the future of European Union (EU) competitiveness warns that the bloc faces an ‘existential challenge’ unless it vastly increases investment and reforms its industrial policy. Faced with slowing productivity, rising global competition and high energy costs, the report says that European leaders could be ‘forced to choose’ between climate, economic and foreign policy goals if the EU does not become more productive.