Power Electronics, a Strategic Asset for Europe: Up to 465 Billion by 2030

Power electronics is a crucial technology for the management and optimization of electrical energy in modern systems: it plays a fundamental role in the energy transition towards renewable sources and in the safety of energy infrastructures .

In simple terms, power electronics is the set of technologies that allow to control and convert electrical energy efficiently , managing energy flows from generation to storage, from transmission to final use. This "intelligence" of the energy system is essential to ensure optimal use of renewable resources, improve the operational efficiency of infrastructures and ensure the stability and security of the electrical system, even against threats of cyber and geopolitical attacks.

In the coming years, power electronics will be the focus of massive investments globally: Europe is preparing to allocate between 310 and 465 billion dollars to these technologies by 2030 , as part of a 1.55 trillion dollar investment in renewable energy, storage systems and distribution networks. An effort motivated by the expected increase of 79% of electricity generation from renewable sources by 2030 , which requires a smart and flexible energy system to manage the growing electrification and decarbonization.

The European Union is the world's second largest economy in terms of power electronics exports, with a value of 19.6 billion dollars, immediately after China ($58.3 billion). However, imports of European technologies related to power electronics have grown faster than exports (+162% versus +103%), causing a growing dependence on external suppliers, China first and foremost. A dynamic that poses significant risks for European industrial competitiveness and for energy and technological security, in an increasingly complex geopolitical context.

The strategic study "Net-zero technologies for Europe's competitiveness and security", carried out by TEHA Group (The European House – Ambrosetti), highlights the urgency of updating European policies, born from the Green Deal, to realign the internal market with the new industrial competitiveness and security objectives. In particular, it proposes to enhance power electronics as a key technology for the green transition, explicitly integrating it into European regulations, such as the Net Zero Industry Act (NZIA), and introducing mandatory ESG criteria for market access, to support internal industrial development and reduce competitive imbalances with other global players.

“To ensure the competitiveness , sustainability and security of the European Union, it is essential to recognize power electronics as a key technology to address the challenges of the green transition and decarbonization , ” underlined Alessandro Viviani, Associate Partner and Head of GreenTech Hub of TEHA Group, during the presentation of the study .

From a security perspective, power electronics also plays a strategic role in protecting Europe's critical infrastructures against cyber attacks, sabotage and blackouts, which could seriously compromise economic and social systems. For this reason, TEHA proposes a "Total Security" approach, including military, economic, technological and energy dimensions , to ensure Europe's technological independence and resilience.

Suggested strategies to strengthen the European power electronics supply chain include:

• Putting power electronics at the centre of the European debate on the green transition , updating the legislation to recognise it as a strategic technology and promoting sustainability and safety criteria for production chains.
• Integrate the role of energy infrastructure and related technologies into European defence objectives, lowering the threshold of foreign dependence foreseen by the NZIA and including resilience, sustainability and cybersecurity criteria in the support mechanisms.
• Promote a call to action among European companies to leverage technological know-how and strengthen industrial competitiveness, while defending the security of critical infrastructures.
• Strengthen European production capacities and supply chains to reduce dependence on China, which dominates the global market with support policies and investments in research and development much higher than those of Europe.

These actions, according to the report, could reverse the current trade trend, with a 70% reduction in imports and a 50% increase in exports, generating up to 705 billion dollars of cumulative added value in EU countries between 2026 and 2030, a value three times greater than the expected growth of European GDP in the two-year period 2024-2025.