The European Union's push to lift electrification to 32% by 2030 could add 600 TWh of power demand while reducing fuel imports and consumer energy costs, the International Energy Agency said Friday.
Electrification remains central to the European Union's energy security, industrial competitiveness, and climate strategy as imported fuels still meet about 60% of energy demand and cost the bloc 380 billion euros in 2024, according to the International Energy Agency.
Recent disruptions linked to the near-closure of the Strait of Hormuz during the Middle East conflict have renewed focus on the European Union's goal of increasing electrification from 24% today to 32% by 2030, the agency said.
While global electricity demand has grown nearly twice as fast as overall energy demand over the past decade, the European Union's electrification rate has changed little and remains below levels in Japan and South Korea.
The pathway to the 32% target requires roughly 600 TWh of additional electricity consumption, an amount equal to the combined annual power use of France and Spain, with industry, buildings, and transport contributing similar shares, the agency said.
To meet the bloc's target, industry would need to increase its electrification rate to about 40% by 2030 from 32% currently. Electricity-powered heating in the paper, chemicals and other less energy-intensive sectors could replace more than 10 billion cubic meters of natural gas and 90,000 barrels per day of oil, the agency said.
The European Commission is seeking to speed up the transition through a proposed Industrial Development Bank that would mobilize 100 billion euro for the sector. Supporting that effort, a first 1 billion euro funding auction has already opened, the agency said.
Authorities are also extending support to industrial processes that require higher temperatures. In Germany's first Carbon Contracts for Difference auction, nine of the 15 winning projects plan to generate heat above 150 degrees Celsius using electricity, it said.
To align with the broader target, electrification in buildings would need to climb to 43% from 37% today. That shift would require annual heat pump sales to nearly triple and rise to more than twice the previous high of 29 gigawatts recorded in 2022, the agency said.
Policy measures across the European Union continue to support the transition. Under current rules, member states must increase renewable energy use in heating and cooling by 1.1% annually between 2026 and 2030, while efficiency regulations encourage more building upgrades, it said.
Nearly 25 bcm of natural gas demand could disappear versus 2024 levels as heat pump adoption expands. At the same time, greater retrofit activity, increased air-conditioner use and growing data center capacity would add to electricity consumption, the agency said.
The transport sector would need to lift electrification to almost 10% from roughly 2% today. Reaching that level would require electric car sales to double from 2025 levels, while electric medium- and heavy-duty truck sales would need to increase thirteenfold, it said.
Recent market trends show progress toward that goal. Electric car sales rose by nearly 700,000 units in 2025, driven mainly by larger markets such as Germany, while electric medium- and heavy-duty trucks increased their market share to more than 4% from around 2% in 2024, the agency said.
The shift toward electricity could reduce household heating and transport costs by as much as 60% while allowing a typical industrial facility to save about 1 million euro annually.
Reaching the European Union's 32% electrification target would require annual investment in end-use sectors to rise to about 100 billion euro, double the average of the past five years. Households could save about 300 euro annually on average, while those adopting heat pumps and electric vehicles could cut costs by around 1,000 euro, the agency said.
High upfront costs remain a barrier for lower-income households and smaller businesses. Targeted credit programs and low-cost financing could help broaden access to electrification technologies, including industrial heat pumps, the agency said.