A coalition of major European investors, corporations and high-growth startups today published an open letter to European policymakers and leaders, calling for a commitment to make Europe the world’s first “electro-continent” – an economy where over 50 per cent of final energy consumption runs on clean, domestically produced electricity by 2040.
The letter, coordinated by Norrsken (inc Norrsken Foundation and Norrsken Evolve) and backed by the Corporate Leaders Group Europe (CLG Europe), H&M, Oatly, Einride, Flower, Trawa, and others, argues that Europe’s chronic vulnerability to energy price shocks must end.
The signatories are urging EU leaders to set a robust target: electricity's share of final energy consumption must reach 50 per cent by 2040, giving regulators, investors, and member states a shared destination to build toward.
I spoke to David Frykman, Founding General Partner of Norrsken VC, to learn more.
Three shocks, one lesson: Europe’s energy model is no longer viable
The open letter arrives as Europe weathers its third fossil fuel price shock since 2022. Russia’s weaponisation of gas pipelines, the Red Sea shipping disruptions, and now the closure of the Strait of Hormuz have each triggered spikes in European energy costs.
In the first 30 days of the Iran conflict, the EU paid an additional €14 billion in fossil fuel imports. Between 2021 and 2024, energy crises cost Europe an estimated €930 billion in crisis premiums above normal prices.
According to Frykman, in the first 30 days of the Iran conflict alone, the additional cost of fossil fuel imports could have financed two large-scale nuclear reactors. The crisis premium Europe paid between 2021 and 2024 could have financed more than the EU's entire existing nuclear fleet.
“The cost of inaction arrives with every crisis, and it is getting higher."
Between 2021 and 2025, Europe paid over €1 trillion in what could be described as an “energy crisis premium” — largely due to fossil fuel imports.
According to Frykman, this has reinforced external dependencies. That’s ultimately the core issue this initiative is trying to address.
He offers a strong wake-up call, asserting:
“Europe runs on fuel it does not own, shipped through waters it does not control. Three energy shocks in four years should settle the argument.
The region can no longer rely on burning expensive imports.
The only cheap energy Europe can produce at scale, on its own soil, is clean electricity. It is time to end the fossil fuel chokehold on Europe's economy, once and for all. Europe must become the world's first electro-continent.”
What does the “Electro Union” actually mean in practice?
At its core, the proposal sets a clear target: by 2040, 50 per cent of Europe’s economy should run on clean electricity — roughly double today’s level. Today, that figure is closer to 25 per cent.
According to Frykman, in practical terms, this is about doubling electrification across industries — from transport to heavy industry — using existing technologies.
Technically, Europe could electrify up to 90 per cent of its economy “using existing technologies."
"The capital, talent, and market demand are already there.
China did not become the world's first electro-state by accident. It set a direction and delivered.
Europe needs the same clarity of purpose – a commitment that gives investors, entrepreneurs, regulators, and member states a shared destination to build toward, accelerating permitting reform, grid investment, and cross-border energy integration. That is what making the EU the Electro Union means."
Why now?
I wondered why this push is happening now, after decades of energy shocks? Europe has experienced multiple energy shocks over decades, yet dependency on imported fossil fuels persists.
Frykman admits that this is something many people are asking.
“What’s different now is a convergence of factors. First, there’s growing public fatigue: energy shocks are no longer abstract — they’re visible in household bills, inflation, and interest rates."
Second, the economics have shifted.
“In many cases, building new clean energy capacity is now cheaper than continuing to rely on fossil fuels.”
And third, there’s a competitiveness issue. The European industry pays roughly twice as much for energy as its US counterparts do.
"That creates a structural disadvantage, particularly in an era where energy-intensive sectors like AI and data infrastructure are becoming central.”
Europe’s energy transition faces a political, not technological, constraint
From an investor’s perspective, Frykman asserts that predictability is key, and Europe has been inconsistent.
“Regulatory environments vary widely between countries, and permitting timelines can range from one to ten years, sometimes with projects being revoked late in the process.
Despite that, the underlying thesis is straightforward: capital flows to the most efficient solutions. Increasingly, that means wind, solar, and other forms of clean energy.”
He contends that what’s often missing is political alignment, sharing:
“There are cases where fully funded, shovel-ready renewable projects have been blocked at the policy level.”
So the issue isn’t necessarily a lack of innovation or investment appetite — it’s that regulatory and political barriers are slowing deployment. Sweden halted plans for 13 offshore wind farms in the Baltic Sea — projects that together could have added tens of gigawatts of new electricity capacity. This is because the Swedish military argued that large clusters of offshore turbines would interfere with radar and surveillance systems, making it harder to detect aircraft or missiles and reducing response times in a conflict scenario.
According to WindEurope, these projects combined could have doubled Sweden’s current electricity generation capacity, and their cancellation threatens the country’s industrial competitiveness and its broader energy security goals.
Frykman contends, “Ultimately, much of this comes down to political decision-making. If policymakers allow the market to function — allocating capital to where it can be used most efficiently — then the system is far more likely to deliver the outcomes needed.”
A new wave of energy startups is rising in Europe — against structural headwinds
Despite these constraints, Europe is producing a new generation of energy startups attempting to reshape the system. Europe is home to a number of energy unicorns (and soonicorns) like Verkor, focused on low-carbon battery gigafactories and German energy unicorn 1KOMMA5°, which aims to turn homes into self-sufficient, electrified energy systems.
However, in October 2025, 1KOMMA5° filed a complaint with the European Commission against Germany’s plan to subsidise up to 20 GW of new gas-fired power plants, arguing the policy constitutes unlawful state aid that distorts competition and raises costs for the energy transition.
The company said the proposed subsidies and capacity payments unfairly favour centralised fossil-fuel infrastructure over cheaper, decentralised solutions like virtual power plants, potentially crowding out cleantech innovation and increasing electricity prices for consumers.
But Europe is also home to cautionary examples, such as Northvolt, which highlights how difficult it is to scale gigafactories.
For Frykman, there’s an important distinction between types of investment.
“Deploying proven technologies — like wind, solar, or battery storage projects — is relatively low risk and largely execution-driven.”
But building entirely new industrial ecosystems at scale is a different challenge.
“Competing globally, particularly with countries that have significant state backing, requires coordinated support. For projects of that magnitude, public and private alignment becomes critical.
That said, these large-scale industrial bets represent a small portion of the overall investment needed — the majority can be driven by the market.”
Can Europe surge ahead or just catch up?
Frykman draws a clear distinction between Europe’s position in traditional and clean energy — while the continent remains structurally disadvantaged in fossil fuels, that same constraint could become a catalyst for leadership in renewables, if it can align policy, cost, and infrastructure with rising demand.
Frykman explained that in terms of conventional energy, Europe is clearly behind, partly due to higher energy costs. But in clean energy, the picture is more balanced. He contends:
“Europe has the potential to lead, particularly because it lacks the same level of domestic fossil fuel resources as countries like the US.
That constraint effectively forces a faster shift toward renewables. And importantly, clean energy is now the most cost-effective option for new capacity. That creates a structural advantage if Europe moves decisively.”
But there is a competitiveness gap
As AI drives exponential demand for compute, Europe’s energy costs are no longer just an economic issue — they are a structural competitiveness risk.
The letter warns that Europe’s energy cost disadvantage is undermining its industrial base and its ability to compete in the AI era. According to the IEA, industrial electricity prices in the EU are roughly twice those in the United States and about 50 per cent higher than in China.
As the AI race accelerates – with global data centre electricity consumption projected to more than double by 2030, according to the IEA – the cost of power is becoming the decisive factor in where the next generation of major companies are built.
Frykman contends that without a clear strategy, this becomes a “competitiveness problem.”
“The logical path forward is to pair data centre expansion with new, domestically produced clean energy. But enabling that at scale requires policy support alongside market forces.”
The problem is no longer economic
The coalition points to the economics as already resolved: solar costs have dropped over 90 per cent in the past decade, and over 90 per cent of new renewable projects are now cheaper than the fossil fuel alternative. Wind and solar generated more EU electricity than fossil fuels for the first time in 2025.
Further, Frykman contends that while there’s been a lot of attention around next-generation nuclear technologies in Europe and the US, in some regions — particularly China — these technologies are already operational at scale.
“In the West, development is ongoing, but attention tends to move in cycles. Just because something drops out of the spotlight doesn’t mean progress has stopped. Nuclear is likely to complement renewables.”
However, he contends that Europe cannot run on homegrown clean electricity if its economy is still wired to burn fossil fuels.
“Around 90 per cent of it can be electrified with technology that already exists. Less than a quarter runs on electricity today. And that number has barely moved in over a decade. This needs to change for Europe to end its dependence on expensive imports”, said Frykman.
Signatories
The open letter is signed by:
- Norrsken VC
- Norrsken Evolve
- Norrsken Foundation
- Corporate Leaders Group Europe
- H&M
- Oatly
- Einride
- Terralayr
- Flower
- Fever
- trawa
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