Untapped potential for electrification in the EU

The economy-wide level of electrification in the EU hasn’t changed meaningfully in over a decade. However, this masks concrete progress by some other measures, such as electric vehicles sales, which are on a rapid growth trajectory, or heat pump installations, which grew rapidly during the gas crisis, but have since stagnated.

3.1 The EU is losing ground to other major economies in electrification

China became more electrified than the EU in 2014 and is rising quickly, reaching a level of 28% in 2023. China has begun to match its growing energy demand with growing electricity use, allowing it to stabilise its dependence on imported fossil fuels, which increased from a few percent in the early 2000s to 20% by 2020, but has stabilised since.

Europe has some frontrunners in electrification. Norway (47%) is one of the most electrified countries in the world and Sweden (33%) is in the global top ten. However, even these frontrunners have stagnated, and countries such as Lithuania and Romania (15%) are among the world’s least electrified.

3.2 Progress in electrification across Europe is uneven

There is a significant spread in the electrification of specific sectors across the EU. For example, households are on average 26% electrified, but the level varies from 12% in Poland to 48% in Sweden. The iron and steel sector is on average 37% electrified, but much more so in France (57%) than Slovakia (18%). These spreads within broadly identical types of energy use suggests that more electrification is achievable across the board.

3.3 Most energy demand can be electrified with established technologies

A few key technologies will be responsible for displacing the majority of fossil fuel imports, which are dominated by gas and oil. These technologies – mainly heat pumps and electric vehicles – are already deployed at scale in many European countries.

While only 22% of EU energy demand is currently electrified, at least a further 67% could be electrified with technologies ready for market. Much of this electrification-ready energy demand is concentrated in a few sectors; road vehicles account for 30%, households for 19%, and industry accounts for another 11% (based on estimates by Agora Energiewende).