In 2023, while the EU power sector cut emissions by 50% compared to 2008, the electrification rate has been stagnating at 23% for the past decade.
Trade body Eurelectric, which carried out the study, found that in comparison China has increased its electrification rate by 7% since 2015.
Three quarters of the electricity generated in the EU this year came from clean energy, shows Eurelectric’s Power Barometer 2024.
However, between 2022 and 2023, electricity demand declined by 7.5% mainly due to industries shutting down and relocating abroad during the energy crisis.
Electricity markets are recording unprecedented negative prices which risk discouraging future clean investments.
The EU needs a robust electrification strategy for decarbonising industry while boosting power demand and competitiveness, stated Eurelectric.
“The missing piece between going green and staying competitive is electrifying. Industrial sectors hold a huge potential to electrify further based on available technologies,” said Eurelectric’s Secretary General Kristian Ruby.
Beyond lack of power demand, another concern for the sector is increased price volatility.
As of August 2024, Europe witnessed 1031 hours where electricity prices went below zero in at least one EU bidding zone, mostly during solar peaks, with power producers having to pay to supply electricity to the grid.
At the same time, parts of Europe witnessed unusually high prices and cross-border spread.
These occurrences, combined with low demand and frequent negative prices complicate the business case for additional renewable investments.
On the other hand, negative prices can incentivise more storage and flexibility to stabilise price volatility.
Yet, a boost in electricity demand remains crucial to solving this issue.
Eurelectric has called on policymakers to implement the Green Deal, maintain a market-compatible investment framework and establish a clear electrification strategy for a competitive, decarbonised European industry.