In its ‘Power Barometer 2024’ report, the association representing the interests of the European electricity industry, Eurelectric, welcomed the fact that by 2023 the EU electricity sector had reduced its emissions by 50% compared to 2008. However, the association is concerned that Europe’s electrification rate has stagnated at 23% for the past 10 years, when it should account for half of the EU’s final energy consumption by 2040.
This finding is all the more worrying, according to the report, given that China has increased its electrification rate by seven percentage points since 2015 (reaching 28.21% in 2021).
Eurelectric explains this phenomenon of stagnation in Europe by the improvement in energy efficiency measures, meaning that “the same amount of electricity can be used to do more”, or by milder weather conditions.
However, the report attributes most of the fall in electricity demand to the slowdown in European industrial activity, accounting for “more than 50% of the reduction in electricity demand between 2021 and 2023”.
Negative prices. For Eurelectric, negative electricity prices are another cause for concern since, in August 2024 alone, Europe recorded 1,031 hours when electricity prices fell below zero, during peaks in renewable energy production. This meant that electricity producers had to pay to supply electricity to the grid.
According to the report, increasing demand for electricity, among other things, remains crucial to solving this problem.
It also highlights a series of other challenges: only 4% of high-emission industrial heating processes are electrified, sales of heat pumps fell by 5% in 2023 and vehicles need to increase from 9 million units in 2024 to a target of 30 to 44 million by 2030.
Taxation of electricity. Kristian Ruby, Secretary General of Eurelectric, also believes it is necessary to correct the “imbalance” in European taxation policy, which still favours gas over electricity, with electricity being taxed 1.4 time more than gas in bills.
“We need to change this tax burden so that electricity becomes the preferred energy source”, he said.
Finally, the report indicates that the infrastructure of the European distribution grid will require an annual injection of almost €67 billion to meet future electrification targets.
To see the report: https://aeur.eu/f/dp4 (Original version in French by Pauline Denys)