Julia Reinaud is senior director at Breakthrough Energy Europe
Public money should finance scalable projects that will bend the cost curve and increase resilience
Europe cannot afford another decade of clean energy strategy without industrial scale. From the Green Deal and the Draghi competitiveness report to the Clean Industrial Deal and the EU Grid Action Plan, this diagnosis has been made repeatedly.
The problem is execution. Two structural handicaps keep the bloc from reaching scale: speed and market visibility.
Permitting delays, grid connection bottlenecks, and litigation slow scaling. Stop-and-go policies, fragmented rules and inconsistent signals shrink markets and suppress demand.
The result is analysis paralysis: clear plans on paper, slow deployment on the ground, insufficient resilience outcomes, and persistently high costs.
If the EU is serious about the energy transition, there is one way to turn that diagnosis into industrial competitiveness: every public euro must pass a smart spending test.
The smart spending test should ask two questions, backed by numbers.
Bend the cost curve
First, will this investment bend the cost curve?
Public money should not fund perpetual demonstrators. It should finance projects and technologies that can eliminate their green premium over time and reach nth‑of‑a‑kind (Noak) scale, where standardisation, learning and competition drive down costs.
Where a premium may remain, Europe should still be honest about the baseline: security has a value. Some private investors already quantify resilience as an advantage, valuing reliable energy delivered, not just energy produced.
A technology that delivers power when systems are stressed, or reduces exposure to hostile suppliers, can justify a measurable “resilience premium”.
A smart spending test would help lower execution risk and make European value chains more attractive to investment
Reaching Noak scale ultimately depends on private capital, which flows towards technologies with credible cost‑down pathways, and transparent accounting of any resilience value that justifies remaining gaps.
Cost discipline is not only a fiscal concern, it is a capital allocation signal. Investors and industrial leaders determine where to invest based on credible pathways to cost competitiveness and repeatable deployment.
When policy and spending are fragmented, risk increases and capital goes to more predictable markets. In a world of limited capital and intense competition, the EU cannot assume it will win the investment race.
A smart spending test would help lower execution risk and make European value chains more attractive to investment.
Change how Europe spends
Second, does the project strengthen European resilience?
Not in slogans, but in system and economic outcomes: more firm capacity and flexibility, fewer import dependencies, stronger grids and fewer chokepoints — and more competitive industry, durable jobs and affordable energy.
A practical checklist can help: is the solution scalable to major impact by the 2035-40 window, cost‑down capable, grid‑compatible, globally portable and supported by a secure supply chain?
Applying this test would change how the bloc spends.
It would push leaders to scale deeper, not wider. Today, many programmes try to fund everything, and when funds are limited that means prioritising nothing. The EU should instead pick a handful of value chains that pass the smart spending test and support them end to end.
This should begin with “right now” opportunities such as resilient grids, storage, geothermal and industrial waste heat.
Public action is necessary to stabilise value chains, but it must go beyond subsidies
A value chain fails when one link fails — standards, inputs, skills, grids and storage, or offtake. If a single link is missing, the project becomes unfinanceable.
Public action is necessary to stabilise value chains, but it must go beyond subsidies. Tools such as public procurement and offtake guarantees to create bankable demand, joint purchasing to move early volume, co-ordinated “made or trusted in Europe” requirements from materials to operations, and grid investments make deployment viable.
The smart spending test would also extend the runway from first-of-a-kind to Noak.
Europe can scale first projects, but underinvests in replication, often because supporting later-stage deployment can collide with EU state aid rules and fears of subsidy races. That constraint is real, but it should not become an excuse.
Moving the baton from public to private financing
Europe can design EU‑level, rules‑compatible instruments that reward cost‑down and resilience outcomes, and that standardise contracts, permitting, interconnection and finance so one successful project becomes a pipeline of dozens.
Pipelines are how learning accelerates, risks fall and private capital finally scales in.
These state tools should not be a substitute for markets. The public role is to reduce execution risk; secure enabling infrastructure; stabilise the rules; accelerate permitting and grid connection; send clear long‑term signals; and accompany technologies through the Noak inflection point — where the private sector must then take the baton.
Europe’s energy resilience challenge is urgent, but the path forward is clear: spend smarter to bend costs and raise resilience; back complete value chains rather than isolated projects; and build pipelines that turn pilots into an industry.
The smart spending test is the discipline that can make Europe’s next round of energy spending not just larger, but decisively more effective.