Power Barometer 2025: Europe at the crossroads between decarbonization, security, and competitiveness

Once again this year, Eurelectric’s Power Barometer tracks the development of the electricity system in Europe, this time focusing on a crucial factor: the flexibility of the electricity system.

The report’s findings confirm that the electricity sector continues to lead the decarbonization race, with 72% of electricity in the EU since the beginning of the year being emission-free and fossil fuels reaching record low levels. Crucially, the EU industrial sector is showing the first signs of recovery. While energy-intensive industries in Germany and Italy remain fragile, industrial production in Spain, Sweden, and Finland is starting to recover. Data centers are also driving new and concentrated demand across the continent.

The Power Barometer 2025 also shows that electrification in Europe remains sluggish: only a 1% increase in electrification last year bears witness to this. The energy system faces growing challenges from the intermittent nature of renewable energy production and the gradual decommissioning of power plants that have traditionally provided ancillary services.

In this context, the flexibility of the energy system, combined with stronger demand signals, is key to achieving Europe’s goals of decarbonisation, energy security and affordable prices.

Today, Eurelectric presented the latest edition of its annual analytical report, the Power Barometer, which tracks the transformation of the electricity sector in Europe. The document outlines the tense balance between the accelerated need for electrification and the actual pace of change, offering clear recommendations to policymakers and investors.

Key highlights and conclusions

Slow progress in electrification: although electrification is recognised as fundamental to the EU’s competitiveness and climate neutrality, the pace remains sluggish. Electricity’s share of final energy consumption is only 23% and has hardly changed over the last decade, while targets require reaching 35% by 2030 and 62% by 2050.
Declining emissions in the energy sector: the electricity sector is leading the way in decarbonisation, with a 57% drop in emissions since 2008, while transport has made almost no progress.
Growth in renewable sources: the share of low-carbon production will reach a record 72% in 2024, with solar energy overtaking coal for the first time. At the same time, fossil fuels fall to a historic low of just 28% of the electricity generation mix.
Investment challenges: European electricity distribution operators have invested €40 billion in network development in 2024, but the real needs are at least €12-24 billion more per year to ensure RES integration, flexibility, and digitalization.
Fossil fuel dependency and potential savings: The EU spent over €400 billion on fossil fuel imports in 2023, an amount that could be reduced by €150 billion per year through the electrification of transport and heating.
Data on new trends:
- Data centers already account for over 3% of EU electricity consumption, with a projected tripling by 2030, which will put pressure on local grids.
- Installed battery capacity grew by over 50% in 2024 and will exceed 13 GW by the end of 2025, but at least 60 GW will be needed by 2030 to achieve adequate system flexibility.
- Electric vehicle sales recover in 2025, with their market share reaching 24% in the first months of the year, but high prices and infrastructure constraints remain a significant barrier.

Repeated recommendations

Accelerated growth of RES capacity – The EU must double its installed RES capacity by 2030, adding over 800 GW in just five years.
Strategic investment in networks – digitalisation, cybersecurity and upfront investment are key to coping with the mass integration of RES and new consumers.
Strengthening policy signals and financing – stable regulatory frameworks are needed to stimulate investment in grids, storage, and flexibility.
More targeted support for industry – without clear market incentives, the EU risks falling behind in strategic sectors such as batteries and renewable energy component manufacturing.
Support for storage and flexibility should take priority over adding more solar and wind capacity.
Regional price disparities must be reduced to ensure fairness for consumers.
Data center demand remains difficult to predict, underscoring the need for an interconnected grid.
Demand-side response should be the top flexibility priority over the next two years
And crucially: electricity taxation must come down to help consumers and unlock electrification