
The Brussels talks were called as part of plans to boost growth in the region and reduce greenhouse gas emissions.
The European Commission estimates EU countries will have to spend one trillion euros on energy infrastructure over the coming decade.
But the leaders are also expected to condemn the violence in Egypt.
The AFP news agency said it had obtained an early copy of a statement on Egypt to be put forward by the leaders at the European Council talks.
In it, the leaders will say they "condemned violence in the strongest terms" and call for an "expeditious and orderly transition" of power, AFP reports.
The summit was called to focus on energy and innovation, which are critical issues for the European Union.
The union has set itself ambitious energy targets, which will only be achieved by massive investment - some one trillion euro (£850bn; $1.4tn) - in the region's energy infrastructure.
Larger member states want the money to come from private industry; others argue that there has to be some EU funding involved.
'Key moment'The leaders will also talk about plans to ease the sovereign debt crisis in the eurozone.
Recent weeks have seen a relative calming of the financial markets after earlier panic, but members states say concrete action must be taken to prevent further instability.
"We are at a key moment - markets are turning, doubts about the solidity of the euro and the euro zone are dissipating," a French official told reporters on Thursday.
"It's the moment to take a big step ahead. So we are ready to put all these subjects on the table."
Germany and France are set to present joint proposals at the summit on improving economic competitiveness and strengthening the euro's bail-out fund.
The plan is believed to contain proposals for limiting wage increases, aligning retirement ages with life expectancy and introducing a "debt brake" to limit the size of deficit a member state can run.
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