The windpower sector must shift offshore and strive to provide a fifth of EU electricity by 2020, said a draft of the European Commission's long-awaited Strategic Energy Technology Plan.
The so-called SET-Plan lays out the EU's strategy for promoting hi-tech solutions to climate change to give European businesses a head start as the world switches to low-carbon energy.
Billions will have to be poured into research to avoid falling behind the United States, which is pouring $777 million into energy research, notes a draft of the plan obtained by Reuters ahead of its release next month.
"Basic research is chronically underfunded in the EU," the report says. "We need to stimulate and incentivize our best brains to push back the frontiers of science."
The project envisages 25 to 30 "smart cities" highly insulated cities that glean energy from their waste and the sun and wind overhead and channel it down to the electric cars, trams and buses in the streets below.
"These Smart Cities will be the nuclei from which smart networks, a new generation of buildings and alternative transport means will develop into European wide realities," it added.
Billions of euros will be needed for the transition, but EU officials are still calculating the exact need.
Environmentalists gave the plan a mixed reception, saying it should have completely ditched coal power and nuclear.
The geothermal industry, which generates steady "baseload" power by tapping into the earth's natural heat, said it provided the perfect complement to fluctuating wind and solar and expressed dismay it had been ignored altogether.
"A renewable energy mix can not be reached in the future without geothermal energy," said the European Geothermal Energy Council.
Boosting energy efficiency will top the agenda, an area where the European Space Agency is expected to lend a hand.
"This could be achieved by transferring advanced insulation materials and ultra-efficient energy systems to the terrestrial energy sector," said the report.