Supply Chain, Grid Issues Handicap Energy Transition in Europe

A recent report from the Energy Industries Council (EIC) has revealed that Europe’s transition to renewable energy could be hindered by industrial bottlenecks, permitting delays, and grid issues. The continent has made significant strides in adopting clean energy, especially in countries like Sweden, Finland, and Portugal, but grid and supply chain issues threaten to handicap the continent’s progress.

If Europe doesn’t address these critical challenges in time, it may not be able to transition to green energy fast enough to meet regional and global emission standards over the next couple of decades. According to the EIC, Europe’s 2030 climate targets are under increasing pressure due to sluggish infrastructure growth, despite the addition of over 110 new green energy projects in 2024.

Modernizing and expanding Europe’s grid infrastructure will be key to ensuring clean energy generated from solar, wind, geothermal, and other sources can reach end users efficiently and at low cost. With major investments in offshore wind projects, Europe has installed 49 gigawatts of offshore wind capacity, representing around 30% of its total wind energy output.

However, several major offshore wind projects have been held back due to limited port infrastructure and supply chain disruptions, forcing Europe to continue relying on fossil fuels until these renewable energy projects come online. EIC Energy Analyst and report author Luiza Marcolongo notes that there are bottlenecks in specific industries, such as offshore wind in the UK and port infrastructure in Scotland that will likely take a long time to address.

According to the report, shortages of fit-for-purpose port facilities and heavy-lift cranes are especially dire, with the Sofia Offshore Wind Farm in the UK being delayed to next year as a prime example of the consequences of such setbacks. The EIC report based its findings on proprietary data sourced from EICAssetMap, a tracking database that maps operational assets across every energy sector.

A detailed breakdown of this data in the Europe OPEX Insight Report shows that Europe’s solar energy capacity doubled from 23 GW in 2020 to 46 GW in late 2024. Spain surged past England to become the solar energy leader in Europe thanks to strong solar project pipelines coupled with robust policy support. Germany and Greece also made notable strides in solar energy via the Witznitz Solar Park (65 MW) and Faethon Solar Farm (504 MW), respectively.

But in spite of the gains Europe has made in green energy adoption, major barriers still remain, Marcolongo says. She explains that limited grid infrastructure and sluggish permitting procedures have put a ceiling on just how fast Europe can decarbonize. There is a major disconnect between renewable energy growth and the grid flexibility needed to handle this explosive growth, the EIC official notes.

Even if Europe deploys energy storage infrastructure to address this issue, transmission grid handicaps will remain a bottleneck in its green transition as long as the relevant leaders and industries don’t craft a solid grid expansion and modernization plan.

The role of internationally-focused private sector players like SolarBank Corp. (NASDAQ: SUUN) (Cboe CA: SUNN) (FSE: GY2) can’t be underestimated as they will seek to fill the gaps within the market and keep driving the shift to renewable energy forward, one client at a time.

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