Electricity demand in the European Union declined for the second consecutive year in 2023, even though energy prices fell from record highs. Following a 3.1% drop in 2022, the 3.2% year-on-year decline in EU demand in 2023 meant that it dropped to levels last seen two decades ago. As in 2022, weaker consumption in the industrial sector was the main factor that reduced electricity demand, as energy prices came down but remained above pre-pandemic levels. In 2023, there were also signs of some permanent demand destruction, especially in the energy-intensive chemical and primary metal production sectors. These segments will remain vulnerable to energy price shocks over our outlook period.
EU electricity consumption is not expected to return to 2021 levels until 2026 at the earliest. Electricity demand in the European Union’s industrial sector fell by an estimated 6% in 2023 after a similar decline in 2022. Assuming the industrial sector gradually recovers as energy prices moderate, EU electricity demand growth is forecast to rise by an average 2.3% in 2024-26. Electric vehicles, heat pumps and data centres will remain strong pillars of growth over the period – together accounting for half of expected gains in total demand.
