In 2023, the EU power sector achieved a 50% reduction in emissions compared to 2008 levels, yet the electrification rate has remained stagnant at 23% over the past decade. A study by trade body Eurelectric indicates that, in contrast, China has improved its electrification rate by 7% since 2015.
According to Eurelectric's Power Barometer 2024, three-quarters of the electricity generated in the EU this year came from clean energy sources. However, electricity demand saw a significant decline of 7.5% between 2022 and 2023, primarily due to industrial shutdowns and relocations triggered by the energy crisis.
The report also noted unprecedented negative electricity prices in the EU, which pose a risk to future clean energy investments. Eurelectric emphasizes the necessity of a robust electrification strategy to decarbonize industry while simultaneously increasing power demand and enhancing competitiveness.
Eurelectric Secretary General Kristian Ruby remarked on the potential for further electrification in industrial sectors through existing technologies. In addition to low power demand, the sector faces challenges from increased price volatility. As of August 2024, Europe experienced 1,031 hours in which electricity prices fell below zero in at least one EU bidding zone, particularly during solar peak generation periods. This led to situations where power producers had to pay to supply electricity to the grid, while other regions faced unusually high prices and cross-border price disparities.
These dynamics, along with low demand and frequent negative pricing, complicate the business case for additional renewable investments. Nevertheless, negative prices could promote greater energy storage and flexibility solutions to mitigate price volatility.
Eurelectric has urged policymakers to advance the Green Deal, maintain a market-compatible investment framework, and develop a clear electrification strategy to foster a competitive and decarbonized European industry.
