Europe is undergoing a fundamental transformation of its energy system, driven by the need to reduce dependence on imported fossil fuels (a geopolitical challenge in itself), lower carbon emissions and electrify transport, buildings and industry. The European Commission now explicitly aims to increase electrification across the economy, while recognising that electricity prices, grid connections and the availability of clean technologies remain major obstacles.

At the same time, electricity demand is expected to rise sharply as electric vehicles, heat pumps, data centres and industrial electrification expand. The challenge is that much of Europe’s new generation capacity comes from wind and solar, which are inherently weather-dependent and therefore cannot provide a constant supply of electricity when demand requires it. Periods of abundant renewable generation can even result in very low or negative electricity prices, while periods of low wind and solar generation can produce severe price spikes.

This creates a fundamental challenge: an electrified economy needs stable electricity around the clock, not only when the sun is shining or the wind is blowing. Current renewable systems alone cannot provide this level of firm, around-the-clock power at scale without additional storage, grid infrastructure and/or dispatchable generation. Large-scale storage (in itself a challenge), demand flexibility, stronger interconnections and other forms of dispatchable generation are therefore essential to complement variable renewable energy.

The electricity grid itself has become another major bottleneck. Across Europe, insufficient network capacity and lengthy connection procedures are preventing new homes, industrial facilities, renewable projects and other large electricity users from connecting to the grid. The Netherlands is a particularly striking example, with thousands of large consumers and generation projects waiting for grid connections.

The economic consequences are already visible. Electricity prices for energy-intensive industries in the EU remained around twice those in the United States and significantly above those in China and India in 2025, placing European industry under increasing competitive pressure. At the same time, the European Commission estimates that Europe will require approximately €1.2 trillion of investment in electricity grids by 2040 to accommodate the transformation of the energy system.

The energy transition therefore requires more than simply replacing fossil-fuelled generation with wind and solar. Europe needs a new generation of reliable, affordable and scalable sources of clean energy — capable of producing electricity 24 hours a day, 365 days a year, while reducing pressure on an already congested grid.

Ultra-Deep Geothermal Energy / EGS offers a fundamentally different approach: accessing the enormous, continuous heat stored deep within the Earth to provide stable, dispatchable power independent of weather conditions. It could become an important part of the energy mix required to make large-scale electrification both technically feasible and economically competitive.