Electrification could save Europe €250 billion annually, study finds
- According to a recent report by Schneider Electric, the EU spends 380 billion euros annually on energy imports, with almost 60% of its energy supply coming from abroad.
- Accelerated electrification and the development of promoter initiatives could create up to 1 million new jobs in local industries.
- The potential of rooftop solar power plants in the EU is estimated at more than 1,000 GW - 10 times the current installed capacity.
Copenhagen, Denmark, October 22, 2025 - Schneider Electric, a leader in the digital transformation of energy management and automation, has released a new study that highlights the key role electrification will play in Europe's future. Currently, the electrification rate in Europe is only 21% , a figure that has not changed over the past decade and is 10% lower than in China, where rapid electrification is taking place. At the same time, the cost of energy for residential consumers in the EU is €0.27 per kWh, in the US - €0.15, and in China - €0.08. This means that daily energy consumption for each EU citizen is three times more expensive than for Chinese residents.
The report “Europe's Energy Security and Competitiveness - Accelerating Electrification” shows that by making a more active transition to electricity, Europe could save 250 billion euros annually by 2040. The so-called “energy trifecta” - the balance between affordability, security and sustainable development - remains a challenge, as high dependence on fossil fuel imports keeps prices high and delays the achievement of climate goals. At the same time, emissions in the EU have already been reduced by 37% compared to 1990 levels.
The study emphasizes that the pace and level of electrification in different European countries varies significantly due to differences in infrastructure, policies, market maturity, and consumer behavior. Some countries, such as the Scandinavian countries, have made remarkable progress in electrifying transport and buildings, while others are just beginning to scale up their efforts. Southern Europe is showing higher rates of building electrification, while Western and Central Europe is focusing on industrial electrification and developing promotional initiatives. To remain competitive on the global stage, Europe needs to accelerate the transition to a more electrified economy.
The report identifies several key policy areas that should be implemented.
First and foremost, governments need to reduce the price differential between electricity and natural gas by gradually phasing out fossil fuel subsidies and reforming the tax system to encourage the use of clean energy.
Equally important is the acceleration of financing - simplifying access to investment, introducing targeted incentives (especially for small and medium-sized businesses), and directing revenues from emissions trading and innovation funds to electrification projects.
The report also emphasizes the need to develop local markets, which includes mandatory electrification of new buildings and industrial processes, support for the rapid deployment of heat pumps and electric vehicles, and encouragement of promoter initiatives.
In addition, it is important to promote local development through sustainable public procurement, accelerate standardization, and support European innovation and manufacturing to fully realize the economic and social benefits of electrification across the continent.
Commenting on the results of the study, Laurent Bataille, Executive Vice President, Schneider Electric Europe, said: "This study is one of the most comprehensive analyses of Europe's electrification potential and the policy actions needed to realize it. It underscores that electrification is vital - not only for meeting climate goals, but also for boosting economic growth, energy independence and industrial competitiveness. Europe must urgently overcome the stagnation of electrification. The technologies already exist and are ready for deployment. Now we need the right policy incentives and decisive business action to unlock the economic and environmental potential we need today."
About Schneider Electric
Schneider Electric is a global leader in energy technology that delivers efficiency and sustainability through electrification, automation and digitalization.
The company provides solutions for buildings, data centers, factories, infrastructure, and energy grids, creating open, interconnected ecosystems that increase productivity, resilience, and sustainability.
The portfolio includes smart devices, software-defined architectures, AI-based systems, digital services and consulting.
Schneider Electric has 160,000 employees and more than 1 million partners in more than 100 countries and is consistently ranked among the world's most sustainable companies.