Industrial electrification in the EU is lagging behind. High costs and regulation are to blame

Industrial electrification is one of the main pillars of European climate policy. But progress in this area is being held back by high upfront costs, complex regulation and infrastructure challenges.

According to Euractiv, the EU is lagging behind in industrial electrification. The industrial sector and the role of the European policy documents Clean Industrial Deal and Electrification Action Plan were the focus of a recent Euractiv conference entitled “Industrial electrification: Europe’s path to a green industrial future”.

Conference participants stressed the need to streamline permitting processes and speed up grid connections to advance electrification efforts. For example, Tom Howes, an adviser on the green transition at the European Commission, stressed that the costs of approving new projects are currently very high and permitting times are too long. By contrast, he pointed to Germany’s success in using processes under European legislation to accelerate energy projects.

Delays also occur when connecting new infrastructure to the grid. Panel participants said that in some cases, connection waiting times can stretch to as long as ten years. The need to modernise the grid is also often a barrier.

MEP Nicolás González Cáceres stressed the need for clear incentives from lawmakers. He highlighted the importance of decoupling gas prices from electricity prices and advocated the use of power purchase agreements (PPAs). The MEP emphasised the key role of the European Green Deal in guiding progress towards Europe’s decarbonisation goals.

Policy stability and consistency are key

Market stability and policy consistency were recurring themes. Dries Acke, deputy CEO of Solar Power Europe, urged European lawmakers to maintain continuity and avoid unnecessary revisions to the energy market. He stressed the role of energy storage solutions in stabilising electricity prices and reducing dependence on volatile gas markets.

Competition for PPAs between traditional industries and data centres also came under scrutiny. Chiara DiMambro of ECCO advocated earmarking funding for electrification in the Competitiveness Fund to make it easier for industrial companies to sign PPAs.

The geopolitical implications of US LNG imports were another topic of discussion. Nicola Rega, executive director for Climate Change and Energy at CEFEC, stressed the importance of long-term contracts in ensuring stable supplies as Europe reduces its dependence on Russian gas.