European electricity demand is rebounding after years of stagnation, driven by electrification, rising electric vehicle sales and a growing data center sector, according to a report by Oilprice.com. The reversal comes despite weakening industrial activity and high energy costs. The growth is modest compared with recent trends in the United States and China, but it marks a clear break from years of flat or declining power consumption.
The International Energy Agency (IEA), in its 2026 Electricity report, said the “Age of Electricity” is gathering pace even in Europe. The renewed growth is changing long-term assumptions and forecasts for power markets and creating new challenges for policymakers and grid operators. Data from clean energy think tank Ember shows that electricity demand in the European Union rose by only 0.5% in 2025, below the 1.9% increase recorded in 2024.
However, BloombergNEF data cited by Oilprice.com indicates that over the past year, major economies including Germany, Italy and Spain saw power demand growth in most months. Portugal and the Nordic countries are also recording steep growth in electricity consumption this year. All figures are adjusted for weather impacts, according to BNEF's analysis.
Weather is also a factor. Several extreme heat waves hit Europe this past summer, prompting more households to consider air conditioning. According to IEA data, 23% of European households had air conditioning at home last year.
Electrification of heating is also gaining momentum, driven by rising natural gas prices following the war in Iran. Electric vehicles are another driver. Oilprice.com reported record EV sales amid record-high fuel prices and a growing number of affordable models.
Transport & Environment, a European advocacy group for clean transport and energy, said battery electric vehicles (BEVs) outsold gasoline-fueled cars for the first time over a full quarter in the second quarter of 2026. The group also estimated that home-charged electric cars cost 50% less to run than gasoline and diesel cars as of mid-September 2026. According to data from the European Automobile Manufacturers' Association (ACEA), BEV sales in Europe, including the UK, Switzerland and Norway, rose 52.2% in August from a year earlier.
Analysts quoted by Oilprice.com, citing Bloomberg, view the power demand growth as a longer-term shift rather than a short-term trend. Per Lekander, CEO of London-based hedge fund Clean Energy Transition, said that while overall energy demand may decline, electricity demand is rising as electricity's share of energy use grows. Data center capacity is also expanding.
According to BloombergNEF's outlook on Europe, the Middle East and Africa published last month, the UK and Germany are set to remain the largest markets through 2035, with 7.7 gigawatts (GW) and 5.1 GW respectively. BNEF expects Spain and Finland to move up the rankings as early-stage projects come online toward the end of the decade, while Ireland and the Netherlands are expected to drop out of the top five due to ongoing constraints. BNEF projects that the power capacity of European data centers will double to more than 30 GW by 2032 and reach 39 GW by 2035.
Rising demand is occurring alongside a shift toward renewable energy, as Europe and the UK maintain goals to become carbon-neutral by 2050. Ember data cited by Oilprice.com shows that solar generation overtook coal in the EU in 2024. In 2025, wind and solar combined exceeded fossil fuels in power generation for the first time.
This transition is placing strain on Europe's electricity grids, which require substantial investment to integrate growing solar and wind output. The European Commission unveiled the European Grids Package at the end of 2025 to accelerate grid upgrades and renewable project permits and to boost cross-border cooperation. According to a review of the EU's electricity grids by the European Court of Auditors, the Commission estimates that between $2.25 trillion (2 trillion euros) and $2.6 trillion (2.3 trillion euros) is required to meet grid needs until 2050.
The Commission also says the EU would need $656 billion (584 billion euros) in grid investments by the end of the decade, as 40% of its distribution grids are more than 40 years old and cross-border transmission capacity is set to double by 2030. Source: Oilprice.com, article by Tsvetana Paraskova, October 20, 2026, citing Ember, BloombergNEF, the IEA, Transport & Environment, ACEA, the European Commission and the European Court of Auditors.
Source: oilprice.com