Rising uncertainty surrounding future electricity demand could affect Europe’s energy transition and power infrastructure investment plans. Governments and system operators have projected that power demand in major European countries could increase by as much as 7 percent per year to 2030 after two decades of relative stagnation. In McKinsey’s Global Energy Perspective 2024 report, the Continued Momentum scenario projects growth to be only slightly above 2 percent CAGR. Further McKinsey analysis has found that up to 40 percent of this modeled growth may not, in fact, materialize. The possible impact of this reduced demand outlook might be profound if higher system costs drive up the price of electricity and potentially accelerate deindustrialization in the region.
Factors, including elevated power prices, energy efficiency gains, and structural economic changes linked to deindustrialization, may all moderate the expected…
