Boosting electrification in Europe

With limited oil and gas reserves, but home to some of the world’s trailblazing electrotech companies, the European Union (EU) is perfectly positioned to take a leading role in the global electrification race. 

Our new report, “Boosting electrification in Europe”, explores how electrification can strengthen energy security and restore the business case for both energy-intensive industries and electrotech manufacturing in Europe. 

Among its main findings, the report highlights that accelerating electrification can: 

• Make the EU more energy secure by cutting two-thirds of fossil fuel imports by 2040. This would save an additional €43 billion of imports per year compared to a business-as-usual scenario.
• Strengthen the business case of electrotech manufacturing in Europe by deploying 150 million EVs on European roads, installing 84 million heat pumps in buildings and rolling out 1,896 GW of wind and solar and 134 GW of batteries.
• Modernise the economy by replacing outdated technologies based on the combustion of fossil fuels with highly pilotable and smart services that can reduce energy consumption by 12% by 2040. 

By electrifying half of its economy by 2040, the EU will not only focus on the most cost-competitive decarbonisation route, it will also largely reduce its exposure to fossil fuel imports and allow companies to lower their costs and reach new markets. It can shift EU spending from imports to industrial renewal and competitiveness. 

Our modelling shows that without additional policies and investments, current trends may lead to 39% electrification by 2040. The EU risks unnecessarily prolonging its dependence on fossil fuels and missing its opportunity to become an electrotech leader, or even to catch up with China. Boosting electrification requires a new Energy Union architecture. It can focus on four main pillars: 

• A direct electrification target of 50% of final energy consumption by 2040 could provide a robust basis for planning and investment. 
• A zero-emission power capacity production target will be central to synchronise electricity demand uptake with supply. 
• A solid pan-European infrastructure plan, particularly in grids and storage, will be critical to ensure the free flow of electricity from production to demand.
• Energy efficiency, which maximises the benefits of electrification by mitigating electricity demand. Additional efficiency can be developed through Ecodesign standards for electrotechs.