The impact of the energy crisis can be beneficial to reach further electrification of final uses, if competitiveness and affordability concerns are addressed. Industrial electricity prices were less shielded and therefore more affected than residential ones, hence impacting competitiveness of industries and possibly slowing the aimed reindustrialisation of Europe. Energy spending as a share of household disposable income increased by about one-third in 2022 with respect to 2019, affecting in particular lower-income households. Without government support measures, this share could have doubled, with very significant implications on families and on the overall economy. The higher energy prices improve the competitiveness of efficient electricity-based technology such as heat pumps and electric vehicles, but their further development critically hinges on incentives to overcome the initial high investment costs.
Electrification of end uses is a central tool for the decarbonisation of the overall energy system, while also improving its overall efficiency. The increased use of decarbonised power is redefining the energy security concept. Increased electrification over the last decade increased global demand by 3 400 terawatt-hours, equivalent to the electricity demand of the European Union and Japan combined, saving around 8 600 petajoules of direct use of fossil fuels. Further electrification will reduce reliance on fossil fuels, shifting energy security concerns from the traditional oil and gas imports concerns towards electricity ones – in terms of both security of supply and quality of service. Technology security is also set to gain a growing importance, especially with manufacturing industries that supply electrical components for power generation and infrastructure, and the corresponding critical minerals needed.