Power demand in Europe was projected to grow by 460 terawatt-hours between 2023 and 2030 because of rising GDP and population growth—but new analysis suggests up to 40 percent of this power demand might not occur. Senior partner Alexander Weiss and coauthors find that elevated power prices, energy efficiency gains, and structural economic changes linked to deindustrialization may moderate energy demand growth. Demand for energy to power data centers and green hydrogen production is the least at risk, while industry, transport, and buildings have the largest share of their power demands at risk of not materializing.
Image description:
A horizontal stacked waterfall graph plots the expected electricity demand growth in Europe between 2023 and 2030, measured in terawatt-hours (TWh). The graph highlights 2 projections: a baseline growth projection and a projection of demand at risk of not materializing. Across all sectors, the baseline growth projection anticipates an increase of 461 TWh, which is a 16% increase from the 2023 baseline. However, the at-risk demand projection shows that a substantial portion of this growth might not occur. For instance, by 2030, the baseline growth projection anticipates a 277 TWh increase, while the at-risk demand projection suggests that 184 TWh, or roughly 40%, might not materialize.
Footnote 1: The expected electricity demand growth is a aase case projection from McKinsey’s Continued Momentum 2024 scenario; demand at risk estimated with a sensitivity to technology adoption rates and industrial output reductions.
Footnote 2: Europe for this analysis includes EU-27, Norway, Switzerland, and the UK.
Source: Global Energy Perspective 2024, McKinsey, Sept 17, 2024; McKinsey analysis.
End of image description.
To read the article, see “Electricity demand in Europe: Growing or going?,” October 24, 2024.