Technology
European power demand set to lag 2030 expectations, McKinsey says
Published by Jessica Weisman-Pitts
Posted on October 24, 2024
2 min readLast updated: January 29, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on October 24, 2024
2 min readLast updated: January 29, 2026
PARIS (Reuters) – Europe’s electricity demand could be significantly lower than government expectations by the end of the decade as faltering
PARIS (Reuters) – Europe’s electricity demand could be significantly lower than government expectations by the end of the decade as faltering economic growth slows the switch to cleaner technologies, a report by McKinsey showed on Thursday.
WHY IT’S IMPORTANT
Electricity demand growth is a strong indicator of Europe’s industrial competitiveness with other regions, and is also a signal of the efficacy of energy transition plans, such as the switch to electric vehicles and cleaner fuels.
BY THE NUMBERS
The European Union, Norway, Switzerland and Britain have together forecast around 460 terawatt-hours (TWh) of additional demand by 2030. But around 40%, or 180 TWh, might not materialise due to lagging growth and high market prices, the McKinsey report said.
Uptake from key technologies is flagging, with growth in battery electric vehicle and plug-in hybrid sales halving to 21% in 2023 from 42% in 2021, the report showed.
Annual heat pump sales dropped 3% in 2023, while some European manufacturers reported a 47% drop in sales in the first half of 2024, which has led to job reductions and temporary layoffs in the sector, the report said.
KEY QUOTE
The countries that have the highest shot at exhibiting some of this demand growth are the countries that are on a relative basis better structurally positioned to deliver low-cost energy,” McKinsey partner Diego Hernandez Diaz told Reuters.
Those countries include the Nordics, with strong hydro and wind power output, and some in southern Europe with strong solar supply. France has similar potential, depending on its nuclear programme, he said.
CONTEXT
European power demand has yet to fully recover from a steep dive in the wake of Russia’s full-scale invasion of Ukraine when power and gas prices surged and governments urged industry to scale back power use.
GRAPHIC
(This story has been refiled to correct the name of the McKinsey partner to Diego Hernandez Diaz, not Diego Hernandez Ruiz, in paragraph 6)
(Reporting by Forrest Crellin; Editing by Mark Potter)
Electricity demand refers to the total amount of electrical power required by consumers at any given time. It is influenced by various factors including economic growth, population, and technological advancements.
Electric vehicles (EVs) are automobiles that are powered by electricity instead of gasoline or diesel. They are considered a cleaner alternative to traditional vehicles, contributing to reduced emissions.
A heat pump is a device that transfers heat energy from one place to another, often used for heating or cooling buildings. They are considered energy-efficient solutions for climate control.
Energy transition refers to the global shift from fossil fuel-based energy systems to renewable energy sources. This transition aims to reduce carbon emissions and combat climate change.
A terawatt-hour (TWh) is a unit of energy equivalent to one trillion watt-hours. It is commonly used to measure large-scale electricity consumption or generation.
Explore more articles in the Technology category
