Key Challenges to Europe’s Renewable Energy Leadership: What Executives Need to Know 

The race for renewable energy began with the 1970s oil crisis.  

While other regions saw the crisis as temporary, Europe recognized a hard truth: depending on foreign oil and gas left them vulnerable. Their response set the stage for today’s industry. 

Europe’s Current Renewables and Cleantech Market Leadership

In the first half of 2024, Europe reached a historic milestone: renewables generated 50% of all EU electricity, marking an all-time high. With projections showing renewable sources will power 72% of European electricity by 2030, the continent stands among the world’s renewable energy leaders. The question is: what drives Europe’s success in this sector? 

1. Strategic Investments in Manufacturing

Asian manufacturers dominate today’s global wind turbine market. Chinese companies hold four of the top five positions, with Goldwind leading. In 2023, Chinese suppliers installed 81.6 GW of capacity, yet 97% of these installations were in China’s home market, with just 2.3 GW deployed internationally. 

In Europe, Vestas, Siemens Gamesa, Nordex Group, GE Vernova and Enercon lead regional turbine supply. Denmark’s Vestas, now third globally, operates in 36 countries—the widest geographical reach of any manufacturer. 

Europe’s counter to Asian competition centers on new manufacturing facilities. Vestas’s new blade factory in Poland will produce V236-15.0 MW offshore wind turbines from 2026. Three additional foundation manufacturing plants—Sif in Rotterdam, Baltic Structures in Esbjerg, and SeAH in the UK—will also improve supply chain resilience. The European Investment Bank backed this drive with €5 billion in December 2023, aiming to generate €80 billion in wind power investment. These investments align with clear targets: Europe plans to install 260 GW of new wind power capacity by 2030. 

Europe’s manufacturing strategy extends beyond wind, however. While Chinese production remains the overwhelming majority, the 3Sun gigafactory expansion will make it Europe’s largest solar facility, producing enough power for one million households. In France, Carbon and Holosolis will start building their respective gigafactories for photovoltaic panels, wafers, cells and/or modules in 2025—both deemed projects of major national interest. 

2. Constant Innovation and R&D

The 2023 European Patent Office data shows Europe’s cleantech and renewables strength through its innovation model. The EPO received 199,275 patent applications, with a 12.2% increase in electrical machines, apparatus and energy patents. Unlike other regions where large corporations dominate R&D, 70% of EU cleantech patents come from companies with fewer than 5,000 employees. These smaller firms focus on specific technical challenges, helping Europe secure 22% of global clean technologies. 

Take energy storage: while Asian firms lead in mass-producing current-generation batteries, European companies like Basquevolt and Altris focus on next-generation technology—solid-state and sodium-ion batteries. This strategic focus on solving deployment challenges, rather than just improving existing technologies, gives Europe an extra edge. 

3. Targeted Education and Reskilling

Despite having lower STEM graduate percentages than global competitors—Malaysia (43.5%), Tunisia (40%), and China (over 40%)—Europe takes a different approach. While 68% of global energy degrees focus on fossil fuels, European universities offer specialized renewable energy programs through qualifications like the European Master in Renewable Energy (EMRE), European Master in Sustainable Energy Management (SESyM), and EIT InnoEnergy Master. This focused education strategy targets industry needs rather than raw STEM numbers. 

The approach fits Europe’s market demands. The EU renewable energy sector employs 1.3 million people, with REPowerEU targets creating 3.5 million jobs by 2030. Specific sectors show the scale: biomethane and heat pumps will need over 1 million workers, while solar energy requires 1 million workers too, including 66,000 in manufacturing.  

Through industry-education partnerships and the Pact for Skills initiative to reskill 6 million people, Europe connects education directly to industry needs. Still, training and attracting talent remain major hurdles, particularly with the enormous workforce demands on the horizon. 

Challenged by Market Pressures and Lack of Funding

Europe’s cleantech and renewable energy sectors face a handful of serious survival threats. North America secured 54% of global cleantech growth equity funding in 2020, while Europe drew just 7%. America’s edge comes from its unified large market, deep-pocketed venture capital firms willing to take big risks, and simpler path to scaling up companies. While Europe has technical talent and innovation, its fragmented national markets and more cautious investment culture hold it back.  

The European Climate, Infrastructure and Environment Executive Agency is also worried that technological progress is falling behind climate goals.  

Let’s consider the main challenges. 

1. Financial Headwinds

Early-stage investment in European cleantech fell 45% in Q1 2024, while ESG fund flows dropped and sustainable debt sits 25% below its 2021 peak. This squeeze particularly hits smaller firms—43% of micro and small cleantech companies can’t access capital, compared to 12% of large ones. 

European companies also pay electricity rates 2—3 times higher than U.S. competitors. And this cost burden pushes them toward debt financing—reflected in Q1 2024’s debt investment of €16.7 billion, double 2023’s total. While private equity might exceed 2023’s €19.2 billion record, it’s concentrated in fewer deals. Meanwhile, the EU cut its Strategic Technologies Platform fund from €10 billion to €1.5 billion, diverting money to defense. 

2. Supply Chain Vulnerabilities

Chinese suppliers provide over 95% of EU solar panels, while European factories produced just 9.2 GW of modules in 2022 despite installing 41.4 GW. The reason for all of this? Building solar manufacturing capacity in Europe costs four times more than in China according to the Energy Transitions Commission, and consequently companies have leaned on their supply chains for assistance. 

However, recent data shows 74% of renewable companies faced higher supply chain losses than expected, and 80% can’t implement backup strategies. Europe produces only 16% of global wind technology and 40% of heat pumps, leaving companies particularly exposed to supply chain disruptions—as seen when Russian gas imports dropped from 40% to near zero after Ukraine sanctions. 

Complex permitting processes and grid congestion limit deployment too. And 85% of businesses lack the data needed to manage supply risks properly. This points to the need for massive re-industrialization in Europe. 

3. Leadership Shortages

Despite Europe’s education investments, German companies now fill 15% of positions with international hires—up from 4% a decade ago. This dramatic increase in foreign hiring is because of a fundamental problem: Europe’s education system, despite its strengths in technical training, isn’t producing enough qualified leaders for its cleantech and renewable energy ambitions. 

While companies know they need to look abroad for talent, most don’t have the resources to do it effectively. European renewables firms typically spend months trying to hire internationally on their own, burn through their HR budget, then end up hiring locally anyway because they can’t reach the right candidates. Executive search firms cut through this problem—they already have networks across multiple countries and regularly fill international roles much faster than companies can manage on their own. That’s why companies serious about solving their leadership gaps are increasingly working with search partners. 

The leadership pipeline also suffers from systemic exclusion though, and that is one part of the problem. Women hold less than one in five energy sector leadership roles and face a 19% wage gap, while People of Color fill under 10% of positions. These numbers matter because they show Europe using less than half its potential leadership talent pool at a time when the sector needs every qualified leader it can find. 

Breaking this pattern means changing how companies think about hiring. The obsession with finding candidates who’ve spent 20 years in renewables cuts out too many good leaders. Someone who’s scaled up a biotech company or turned around a struggling tech firm knows enough about building teams and growing businesses. The sector needs people who can run companies, not just people who’ve always worked in cleantech. When companies stop fixating on industry experience, they naturally find more diverse candidates—people who can lead but happened to learn their skills somewhere else. 

Strong Leadership is Key to Maintaining Europe’s Competitive Edge

The problems facing European renewables and cleantech—and more widely, the energy transition—including funding gaps, supply risks, and innovation blocks, appear separate but share an important underlying factor: the critical challenge of leadership. 

Successful leaders don’t just come up with brilliant ideas—they build the momentum to bring them to life. They inspire support, help build regulatory frameworks, spot funding opportunities others miss, build better supply networks, and turn technical breakthroughs into market success. With the right leadership support, companies find ways past barriers that stop their competitors. 

The answer isn’t just hiring new leaders—it’s also improving the ones we have. When companies strengthen their leadership teams, they create a multiplier effect: new talent brings fresh ideas while experienced leaders know how to implement them. Companies that invest in better leadership now will be the ones to overcome these challenges and maintain Europe’s edge in renewable energy. 

About the Authors

Lise Kirkegaard is a Partner at Stanton Chase Copenhagen, overseeing executive search across the energy, technology, financial services, and consumer sectors. With over 18 years of leadership experience, she previously served as Global Head of Corporate Communications, Branding, and Sustainability/ESG at the Falck Group. Her expertise spans green transition, digitalization, and business transformation. 

Benoît Duretz brings 25 years of international business development experience to his role as Partner at Stanton Chase Paris and Lyon. Specializing in the industrial and energy sectors, he focuses on energy transition challenges and renewable technologies. His background in electrical systems engineering and extensive C-level experience enables him to build high-performance executive teams.  

Christoph Trauttenberg, Partner at Stanton Chase Vienna and Linz, combines over 12 years of personnel consulting expertise with strategic management experience. His track record includes successfully building teams and identifying top talent across various industries.