EU Aims for 46% Electrification Rate by 2040

The European Union is drafting a plan to double its electrification rate by 2040, aiming for 46% of energy consumption to come from electricity. This goal is in line with the World Economic Forum's direction and comes as a response to the Iran conflict, which led to increased oil and gas prices.

The current share of electricity in EU energy consumption is at 23%, which has remained steady for over a decade. However, this new target would require significant investment in electric vehicles, heat pumps, and industrial electrification, as well as upgrades to the aging power grid. The estimated cost of achieving this goal could be hundreds of billions of euros.

The EU's high electricity prices are currently above those in the United States, leading to deindustrialization in Europe. To address this issue, policymakers would need to lower electricity prices, which could make electrification more economically feasible for some firms.