EU strategy to electrify independently

"If you're having fossil fuels, you need to buy them every single year. If you have solar panels, you buy them every 30 years." The speaker represented a community of industrial energy users. The point answered a question one of the hosts had called possibly rhetorical, whether Europe has traded its dependence on Russian gas for dependence on Chinese hardware. Not in the same way, several speakers said. The Ripple hosted by Vincent Gregoir of Junction Growth Investors and Shravan Shah of Keeling Capital kept returning to the harder question of which hardware Europe must still control.

Vincent began with solar, whose whole value chain is now dominated by Asian companies. Gas was an energy security dependency, Vincent said, while electrification adds dependence on manufacturing capacity and supply chains.

What can be cut off

A founder electrifying chemical processes said independence does not require owning the factory that makes the solar panels. It requires electricity and a grid to use it, and building grids for electrified chemistry would take 15 to 20 years. One participant proposed a test. Europe must become independent wherever someone can cut its access indefinitely. Solar panels do not qualify, because Europe knows how to make them and could rebuild production at a premium if it had to.

The end-user representative ranked the priorities. The grid comes first, meaning the manufacture and replacement of high-voltage cables and the cybersecurity around them. Midstream materials come next and batteries last, since a third party has the least influence there. The value argument pointed the same way. Panels now cost almost nothing in utility-scale solar quotes, and battery cells make no sense for Europe. The value lies in integrating electricity into industrial processes, in heavy engineering and in whole projects built on site.

A corporate venture investor from a utility saw the difference as optionality. If gas stops, the energy disappears and the system breaks. If an equipment supply chain breaks, the question is how long plan B would take to put in place. That analysis of bottlenecks, the investor said, has not yet been done at European level. Europe has many lobbyists, each trying to protect their own industry, Vincent said, so the exercise needs doing in more depth.

If you're having fossil fuels, you need to buy them every single year. If you have solar panels, you buy them every 30 years.

A carrot but no stick

Shravan compared the US. The Inflation Reduction Act penalised Chinese inputs while giving large production tax credits, the 45X, to anyone building in the US, including TSMC, LG and Panasonic. US battery manufacturing capacity doubled between 2022 and 2024, Shravan said, and Europe had no such bazooka.

An American participant agreed. Europe's carrot has been weak and its stick non-existent, while the US used UFLPA to keep out solar products. Bringing panel making back would be very hard, since that means cells, ingots and wafers too. Inverters are another matter, and Europe has ignored them. "If you want to be independent electrically, you need to control the intelligence in your system," the participant said. Europe has been afraid to wield a stick because of the geopolitical stigma. Yet pushing industry to electrify without tariffs or import barriers risks driving it abroad and simply moving the carbon elsewhere.

Shravan asked whether Europe could afford a strong stick when cheap Chinese inputs are so embedded in its industry. Cost was part of it, another participant said, but so was a mindset formed by 50 or 60 years of free trade. Europe does have a bazooka for the grid, Vincent said, but EU grid rules pass through 27 national laws, and that costs speed.

Batteries after Northvolt

Northvolt, Shravan said, taught Europe that competing head to head on mass-market LFP cells makes no sense, and asked what winning in batteries should mean. The American participant urged a long game. China leads in LFP because it has played that game for 10 to 15 years, and has played the solar game for a long time too, so Europe should place bets five to fifteen years ahead. A participant working on catalysts warned that solid-state batteries have taken so long that LFP keeps catching up, and QuantumScape's cells are only marginally better than the best lithium-ion. Europe should look at alternatives to batteries too.

One of the hosts pointed to recycling, battery management software and flexibility, where Europe has long been strong. A co-founder of the host's fund had built a flexibility business in 2010, then went to the US expecting to find ten bigger copies. There were none, and the US grid turned out to be weaker than Europe's.

Asked for European successes, the table took a while to answer. Shravan named ASML, whose extreme ultraviolet lithography came from decades of research with no certainty of commercial success, and high-voltage cables, where three European companies control about two-thirds of the global market. Everyone knows the Inflation Reduction Act, Shravan said, but not the EU's electrification action plan, which points to a marketing problem. A participant recalled that Europe led in EVs 10 to 15 years ago and let the lead slip.

The hosts ended with a show of hands on whether Europe wanted the cheapest, the fastest or the most independent transition. Independence won. By then it meant something narrower than it sounds, a grid, its cables and the intelligence that runs it, with the panels still bought abroad.

This Ripple was hosted by Vincent Gregoir (Junction Growth Investors) and Shravan Shah (Keeling Capital) at The Drop 2026 on 16 September.