#None #Energy Transition #Electrification #Eurelectric

Boosting Electricity Demand and Flexibility

The energy landscape in Europe is undergoing a significant transformation, driven primarily by the adoption of cleaner, renewable sources of power. According to Eurelectric's recently released Power Barometer for 2025, the dynamics of electricity pricing and demand are rapidly evolving, prompting a need for innovation in energy management and infrastructure.

In 2024, Europe experienced an increase in the share of clean and renewable energy sources in its electricity mix. As a result, average wholesale electricity prices fell dramatically from €227/MWh in 2022 to just €82/MWh. This substantial decrease brings welcome relief to consumers, but the market is not without its challenges. Regions dependent on fossil fuels continue to face significantly higher prices, presenting disparities across the internal market.

The changing economic landscape is also indicative of a broader decarbonisation trend within the European Union's power sector. Together, renewables and nuclear energy accounted for a remarkable 72% of electricity generation, a promising sign for achieving sustainability goals. However, certain regions, particularly in south-eastern Europe, have struggled with sporadic price surges, highlighting ongoing volatility in the market. In fact, an analysis indicates that electricity prices surpassed €150/MWh only 6.9% of the time in 2024 compared to a staggering 69% in 2022, suggesting a stabilizing market.

Despite decreasing prices, the electricity demand growth remains sluggish, registering just a 1% increase in 2024. This figure is still 7% lower than pre-crisis levels observed in 2021, indicating that Europe is yet to fully recover from the impacts of the recent energy crisis. To foster sustainable growth, it is critical to incentivize electrification across various sectors, including transportation, heating, and industry, with an ultimate aim of achieving a 32% electrification target by 2030, as outlined in the Clean Industrial Deal.

Kristian Ruby, Secretary General of Eurelectric, emphasized the urgency of the situation, stating, “To address market volatility, we need to invest in grids, storage, and flexibility. At the same time, sluggish demand remains a barrier to sustained investments.” This dual approach – enhancing infrastructure while stimulating demand – is pivotal for establishing a robust energy ecosystem that not only meets the needs of today’s consumers but is also prepared for the challenges of tomorrow.

Eurelectric urges policymakers and stakeholders to accelerate initiatives that promote electrification. By creating effective investment signals for grid development and flexibility solutions, the energy sector can better balance supply and demand, ensuring stability and reliability in service delivery.

As Europe aims to achieve its ambitious climate goals, the role of electricity will be crucial. By pushing for electrification and supporting investments in infrastructure, Europe can pave the way towards a more sustainable, economically viable energy future. As the electricity industry evolves, it will require concerted efforts from all sectors to deliver an energy transition that is both beneficial and equitable for all consumers.

In conclusion, driving higher electricity demand and enhancing flexibility is no longer optional; it is essential for unlocking the multitude of advantages presented by the energy transition. A collaborative approach, combining technological advancements with strategic policymaking, will be the cornerstone of this new energy frontier.