Europe needs to invest more in new technology if it wants to compete in an age of cheap energy, according to the chief executive of Italy's largest power company, Fulvio Conti.
Speaking to CNBC, he said:
If we don't invest in new technologies and improvements it will be difficult to match the competition of emerging markets and America these days.
We need to increase our efficiency and improve technology to reduce the costs of energy generation while fostering a new world approach to fighting climate change.
His comments echo those of Tata Steel Europe boss Karl Koehler who urged the UK government to slash the cost of energy.
The warnings come as Europe continues to suffer from high electricity costs while the US has seen prices tumble thanks to the shale gas revolution. Europe's industrial energy users have been paying more than twice the electricity price and four times as much for gas as their US counterparts, reports Reuters.
Mr Conti's comments prove especially apt to the UK energy market. The UK will need to invest an eye-watering £330bn to ensure a secure energy supply and hit its carbon targets by 2030, according to an RWE Npower report published in 2011.
However, potential investors have been spooked by the prospect of Ed Miliband's 20 month energy price freeze. The proposal came under sharp criticism last year, with the Confederation of British Industry (CBI) saying "the proposed energy price freeze will deter much-needed investment and is at odds with Labour's pledge to decarbonise the economy and create a million green jobs."
In December, the secretary-general of the Organisation for Economic Co-operation and Development (OECD) said:
If you freeze the price of energy and the international price of energy rises, it means there's going to be a very big difference to pay. Who's going to pay the difference? he asked.
Well, are you going to ask the investors to take the difference? Well, you know they'll probably go bankrupt. How are you going to get people to come in and invest to get their money back in 30, 40 years' time, when you are saying there's going to be a freeze? I think this is simply not consistent, not economically objective.
European industries such as aluminium have not been helped by the EU's ambitious carbon reduction targets. However, EU climate change policies pale in comparison to the Herculean task the UK has set for itself of an 80 per cent reduction by 2050.