On the global stage, Europe has widely been regarded as a pioneer in combating climate change, most notably for the degree of action the region has undertaken to meet sustainability targets.

Europe’s commitment to these targets is evident in investments the EU has made toward renewables: in 2023, almost $110 billion USD was spent on renewables generation. Now, the continent spends 10 times more money on renewable energy than on fossil fuels.

Unfortunately, that’s still not enough, particularly amid the ongoing backdrop to European renewables. Eye-watering energy bills, increasing global competition, supply chain complexities, and slowing demand for clean products are additional pressures undermining the EU’s renewables strategy. Moreover, an outdated electricity grid could potentially derail plans to move away from fossil fuels and toward renewables.

Yet there’s still a strong opportunity to rewrite Europe’s energy future and shift away from fossil fuels while meeting Net Zero targets. If you ask Europe’s startups and entrepreneurs, the way forward lies in practical solutions, technological innovation, and honing in on market opportunities. This doesn’t just provide a greener path forward for the energy landscape in which European entrepreneurs operate—they can also take ownership of ensuring that becomes a reality.

Here are three important things entrepreneurs and innovators should know about Europe’s energy future.

1. It’s time to bridge the gap between policy and practice

According to Asparuh Koev, CEO of Transmetrics, Europe’s green policies are ambitious, but they often overlook the operational constraints businesses face on the ground. However, governments playing catch-up shouldn’t hold businesses back from taking a pragmatic and hands-on approach to navigate energy challenges.

For example, 19 EU member states offered some form of tax incentives in a bid to ease the transition to EVs, yet only 13 provided incentives for charging infrastructure as part of that. It’s also important to note that demand for EVs has decreased in recent years, largely due to supply chain chaos and difficulty in sourcing the raw materials needed for EV batteries. Naturally, that has created friction for businesses switching to greener forms of transport as part of their mandatory sustainability efforts.

Instead of waiting for policies to take the lead, entrepreneurs can take matters into their own hands to ensure smarter and greener operations and lower their carbon footprints. One starting point is using AI to optimize vehicle deployment patterns as part of logistical planning. For instance, AI software can map the most fuel-efficient routes so businesses can embed more sustainable practices into their operations.

It’s also important to focus on pragmatism and practicality. Entrepreneurs should home in on a strategic and targeted approach, fuelled by visibility, to get ahead of the energy transition.

Jose Pla, CPO and co-founder at ZeroNet IT, urges business owners to get a grasp of how and where energy is being used, and advises entrepreneurs to focus on efficiency. Most entrepreneurs overlook their IT infrastructure when evaluating their energy consumption, and it is therefore a common blind spot. “Companies rely more than ever on digital systems, networks, and cloud services, yet very few actually know how much energy their IT systems consume, or whether that energy is being used efficiently,” Pla explains.

Simple measures like switching off unused devices or planning smarter hardware refreshes could save entrepreneurs up to 40% in energy consumption, just by monitoring usage, identifying inefficiencies, and acting on smart, data-driven recommendations.

“These are actions companies can take today, using the infrastructure and data they already have,” Pla iterates. “It’s about using what you already have, but better.”

2. Resilient infrastructure is a must

Of course, there are larger forces at play, too. In May, the harsh reality of an outdated grid was sorely felt across the Iberian Peninsula. Experts agree that the mass blackout is a wake-up call that it’s time to modernize Europe’s energy grid, 30% of which is more than 40 years old.

Until the grid is modernized, the full shift to renewables simply can’t happen. Koev iterates that Europe’s existing energy infrastructure is not ready: “The infrastructure we have today was built for a centralized, diesel and petrol-based world.”

Recent research from McKinsey shows that only 10% of the low-emissions technology deployment needed to meet Net Zero has been achieved. Europe’s energy future can’t be made a reality without technology and innovation.

Innovations such as artificial intelligence (AI) and the Internet of Things (IoT) tend to dominate discussions around transformations for a future-forward energy grid. Yet there’s one renewable energy source that’s not gotten as much airtime: fusion energy, the very energy that fuels the stars.

“Entrepreneurs in Europe have a unique opportunity to benefit from the advances in fusion energy technology, given that several of the largest fusion devices in the world are in the region,” says Matt Miles, Senior Vice President of Marketing and External Affairs at Type One Energy.

Fusion’s appeal rests on the fact that it’s virtually limitless. It’s also quite safe to produce and yields no carbon emissions. Miles specifies, “Once fusion energy hits the grid, it will address key challenges. Fusion can provide security and independence from foreign sources, grid flexibility and complement renewables, and leadership in energy technology and supply chain development.”

However, there’s still a way to go to commercialise fusion energy at scale to meet Europe’s energy needs. Limited manufacturing supply of fusion energy plant components continues to be a hurdle.

3. Industry hurdles are market opportunities

Challenges, such as fusion energy’s barriers to commercialization, serve as a case in point as to why innovative collaboration, co-investment toward materials supply, and industry partnerships are integral to achieving a more resilient grid.

Daniel Domingues, founder and CEO of Planno, also outlines that industry hurdles create market opportunities, as evidenced by Europe’s maturing solar rooftop market, which still sees uneven adoption. For example, Planno’s geospatial data shows only 4.2% of commercial rooftops in France host solar, versus more than 20% in Belgium and the Netherlands.

In Domingues’ view, “The real opportunity for entrepreneurs is unlocking underused rooftops with smarter planning, distributed solutions, and business models that thrive without political support or entrenched lobbies.”

European founders are uniquely positioned to accelerate the energy revolution because they’re building solutions in a complex, highly regulated, and fragmented market. Because of that, they’ve honed solutions that can survive policy changes, demand variability, and geopolitical uncertainty.

It’s an exciting albeit unnerving time in Europe’s energy landscape. Startups and entrepreneurs have the power to mold a more resilient renewables future by focusing on visibility, modularity, and collaboration.