An Electrification Race. Will the EU Avoid an Energy Crisis, and What Should It Do Next?

In the wake of the 2022 gas and oil shock, the EU expectably set a course to ‘get rid of Russian fossil fuels’. Today, out of the chaos of the new gas and oil crisis, a new lodestar is emerging for EU energy policy. This situation is examined by Noah Gordon, a DARE task force member.

The author considers the share of electricity in final energy consumption by the end user. Importantly, this metric counts the energy coming out of a wall socket, but not the energy lost as waste heat when fuel was burned in a power plant, nor the energy lost in a power line.

In 2024, the EU electrification rate stood at 23.4%. The bloc’s aim, first set out in the Clean Industrial Deal of 2025, is to raise the rate to at least 32% by 2030.

European scholars, including those at ECFR, have identified energy dependence as the continent’s main cross-cutting weakness. Europe’s excessive reliance on fossil fuels undermines its leverage in talks with the USA, Europe’s main supplier of crude oil and liquefied natural gas.

Electrification is an especially good goal when oil and gas are in short supply. The problem is that the EU’s target is likely unachievable. Indeed, meeting it requires the bloc to promptly end nearly two decades of stagnation: the 2024 rate of 23.4% was barely higher than the 2007 rate of 22.2%. To hit the 32% target in 2030, the EU would need to raise the rate by 6.6% in six years. And that is next to impossible.

The EU cannot get there by focusing on the power sector only. Shutting down a coal plant and replacing it with the equivalent output of wind turbines changes the rate not at all.

Also holding electrification back is a shortage of the skilled workers to install devices. The European Centre for the Development of Vocational Training estimated in 2022 that more than 1.6 million job openings for ‘electroengineering workers’ would need to be filled by 2035. Many electricians are older men heading for retirement. The industry hires few young personnel, who can scarcely replace the retiring workers.

Faced with yet another fossil fuel price shock, EU decision-makers are making a renewed effort to finally amend the energy taxation directive and ensure that electricity is taxed less than fossil fuels. Currently, industrial consumers pay about three times as much tax on electricity as they do on gas. The commission proposed doing this back in 2021 but this has foundered on the opposition of member States, like Italy and Poland, concerned about their tax policy authority or raising taxes on gas. It is past time for European tax policy to stop favoring expensive imported fuels, the author writes. But European bureaucracy is divided, and there will hardly ever be a consensus on the matter. So the continent’s topical issue of rapid electrification is still up in the air.

Source: https://ecfr.eu/article/europes-electrification-race-five-ways-the-eu-can-avoid-the-next-energy-crisis/