This article contributes to the understanding of the current transformation of the energy industry in Europe and the interplay between greening policies and digital technological innovation. It shows how, since the financial crisis, core players in the European energy industry ended up in a dualist limbo, between conventional and emerging business models. It documents how strategies and business models that delivered extraordinary financial performance in the first decade of the 21st century often failed dramatically after the 2008 financial crisis. Yet it finds that incumbents with 1) a greener energy mix, 2) smaller scale and, quite naturally, 3) better financial performance fared better than others The study explores the emergence of new business models and finds that most of the emerging business models circle around the customer interface where digital solutions allow more flexible interplay between consumption and production of energy, and/or between several service alternatives to fulfill basic needs for customer home comfort. The article also discusses important policy implications: For competition policy, it indicates a shift from challenges of scale and scope towards challenges of regulating networks and dominant platforms. Furthermore, it highlights new policy dilemmas concerning balancing and energy storage to accommodate intermittent supply from renewables.