The European Power Sector in Transition

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Across Europe, the share of electricity in final energy demand use continues to grow, displacing petrol and gas. In order for Europe to succeed in addressing the climate change challenge, decarbonisation needs to take place throughout the whole European economy. To achieve the cost-optimising benefits of a coherent economy-wide approach, it is crucial that a consistent carbon price signal should apply across all sectors, thus enabling the efficient distribution of assets and efforts.

Using decarbonised electricity more widely will open the door for many more positive spill-over changes in the non-ETS sectors which currently have no credible alternative route to achieving sustainability other than electrification.

Decarbonising power production, while at the same time electrifying our energy use, will be essential for creating a carbon-neutral and energy efficient economy in the EU as it eliminates the need to burn fossil fuels to provide energy for our buildings and cars. The increasing electrification of demand should be welcome din that regard. The European power sector continues its efforts to decarbonise the electricity system, aiming to provide a carbon-neutral electricity supply across Europe by 2050.

As electricity in Europe is already on a decarbonisation trajectory, other sectors should also be able to reap the benefits. By calling for further penetration of decarbonised electricity into new sectors, policy makers can ensure that minimum time is lost in transitioning towards carbon-neutrality whilst highlighting investment value.