Europe’s Power Demand Returns To Growth |

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Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,…

Despite weakening industrial activity and high energy costs, European electricity demand is bucking years of flailing power consumption.

Rising electrification rates and the data center boom are the key drivers of this new trend in Europe’s power demand, which is set to gather momentum in the coming years amid the EU’s energy transition and the global AI boom.

Europe’s electricity demand growth is nowhere near the pace seen in the United States and China in recent years, but it’s a marked shift nevertheless, after years of declining or stagnant power consumption.

The Age of Electricity, as the International Energy Agency (IEA) put it in its 2026 Electricity report, is gathering pace even in Europe. The renewed growth in power demand is changing long-term assumptions and forecasts about power markets, and posing new challenges for policymakers and grid operators.

Electricity demand in the European Union inched up by 0.5% in 2025, below the 2024 increase of 1.9%, according to data by clean energy think tank Ember.

Then, over the past year, top European economies, including Germany, Italy, and Spain, saw power demand growth in most months, according to data by BloombergNEF. Portugal and the Nordic countries are also seeing steep growth in electricity consumption this year, with all figures adjusted for weather impacts, per BNEF’s analysis. Related: Copper Needs $332 Billion in New Mines to Avoid Deficit, BloombergNEF Says

The weather impacts, especially the several extreme heat waves in Europe this past summer, are prompting a growing number of households to consider air conditioning. Last year, 23% of European households had AC at home, according to data by the International Energy Agency (IEA).

Electrification for heating is also gathering momentum now amid soaring natural gas prices in the wake of the war in Iran.

Not to mention record electric vehicle (EV) sales amid record-high fuel prices and a record number of newly available affordable models.

In a landmark achievement, battery electric vehicles (BEVs) outsold gasoline-fueled cars for the first time over a full quarter in the second quarter of 2026, Transport & Environment, a European advocacy group for clean transport and energy, said in a report earlier this month.

Home-charged electric cars cost 50% less to run than gasoline and diesel cars as of the middle of September 2026, according to Transport & Environment’s analysis.

Official automotive figures also confirmed the findings—the fuel crisis is shifting buyer preferences to EVs.

BEV sales in Europe, including the UK, Switzerland, and Norway, surged by 52.2% in August from a year earlier as record-high gasoline and diesel prices prompted drivers to flock to battery and hybrid vehicles, according to data by the European Automobile Manufacturers’ Association, ACEA.

The growth in Europe’s power demand is not a short-term trend, analysts say. It’s the beginning of a shift toward rising demand – even at lower rates than in the U.S. – due to the electrification drive and the data center boom.

“A growing share of energy use is through electricity, and even if energy demand goes down, electricity demand is going up,” Per Lekander, CEO of London-based hedge fund Clean Energy Transition, told Bloomberg.

“It’s unstoppable and it’s going to go on for decades.”

Europe’s data center capacity is also growing and the UK and Germany are set to remain the largest markets through 2035, with 7.7 gigawatts (GW) and 5.1 GW, respectively, BNEF said in an outlook on Europe, the Middle East, and Africa (EMEA) last month.

Spain and Finland will jump up the rankings as currently early-stage projects start to come online toward the end of the decade, while ongoing constraints in Ireland and the Netherlands will see them both drop out of the top five largest markets, according to BNEF.

In total, the power capacity of European data centers is expected to double to top 30 GW by 2032, and further grow to 39 GW by 2035, BNEF reckons.

As power demand grows, the electricity supply is increasingly leaning into renewable energy as Europe and the UK stick with emission-reduction goals to become carbon-neutral by 2050. In the EU, solar power generation overtook coal generation in 2024. Last year, wind and solar combined exceeded fossil fuels in power generation for the first time, after drawing level in 2024, according to Ember’s data.

This rise of renewable energy is placing a strain on Europe’s grids, which need a lot of investment to be able to incorporate soaring solar and wind output. That’s a pressing problem for the EU and the UK, with trillions of dollars needed to make the grids of the past suitable for future power generation and demand.

At the end of last year, the European Commission unveiled the European Grids Package to fast-track grid upgrades and renewable project permits, and boost cross-border cooperation.

The European Commission has estimated that $2.25 trillion (2 trillion euros) to $2.6 trillion (2.3 trillion euros) is required to meet grid needs until 2050, a review of the EU’s electricity grids by the European Court of Auditors showed last year.

By the end of the decade, the EU would need $656 billion (584 billion euros) in investments as 40% of its distribution grids are over 40 years old, and cross-border transmission capacity is set to double by 2030, the Commission says.

By Tsvetana Paraskova for Oilprice.com

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