Europe's best defence against the next price shock
Efficiency has already saved Europe a third of its energy since 2000. Treating it as one system with electrification and clean power is how the rest gets done.
Most of the European energy conversation is about what still needs building: more renewables, more grids, more interconnectors, more heat pumps, more EVs and more batteries. I want to start somewhere else, with a saving Europe has already made but few people know about.
EU final energy consumption in 2024 was 854 million tonnes of oil equivalent. Without the efficiency improvements made since 2000 it would have been closer to 1,103 Mtoe. The difference, 249 Mtoe, is 29% of what the EU actually used last year. The data comes out of the Odyssee-MURE decomposition., a project that has been tracking energy demand for more than three decades and to which I contributed 10 years ago. Importantly that is energy nobody had to generate, import or pay for. It built up slowly, over twenty-five years, across 27 countries, in warmer buildings, more efficient factories, better appliances, the switch to LED lighting and steadily more efficient transport. At any given price Europe now pays around a third less than it would have without those gains.
This shield holds whichever direction the next shock arrives from. If anything, the figure undersells the benefit, because it counts only the energy saved and not the power stations, pipelines and grid connections nobody had to build. It is one of the most effective protection measures against future energy crisis: the energy not consumed cannot be withheld, weaponised, or made more expensive by a supplier you do not control.
The crises of the past few years have all produced the same response. Russia’s invasion of Ukraine, the shock of Covid, the latest trouble in the Middle East, each set off a scramble for alternative supplies, but none of them sufficiently addressed the root cause. Europe still imports too much fossil fuel, and it wastes far too much energy, a habit that cheap fuel let it put off dealing with for decades.
Electrofficiency: Why electrification shrinks the problem
The good news is that the potential for further efficiency improvements is vast. Electrification is efficiency because electrifying something usually cuts the energy it needs, often by a lot. A heat pump delivers three or four units of heat for every unit of electricity it draws. An electric car turns most of its energy into motion, where a petrol engine throws away 80% of it as heat before the wheels even turn. So when people line up today’s fossil system against a future clean one, unit for unit, they tend to overstate how much new generation Europe has to build, because each clean kilowatt-hour does more useful work. Part of the transition is a fuel switch, and part of it is the problem getting smaller through system compression and electrofficiency.
Uneven fossil fuel phase-out across sectors
Electricity is where Europe has seen real success when if comes to reducing import dependency. The fossil share of EU power generation has dropped from 53% in 2005 to below 30% last year, on Ember’s latest figures, which is real progress and not a statistical artefact. The catch, in the Eurostat balances, is that electricity is still only 23% of final energy use. Transport is 92% fossil-fuelled. Buildings are at 71%, industry at 61%. Away from the power sector, most of the work is still in front of us.
Three levers, one system
The mistake I keep seeing is that efficiency, electrification and clean power get treated as rival claims, argued over by different directorates and different lobbies. They are really one system: Efficiency lowers the demand that has to be met, which makes the grid smaller and cheaper and shrinks the import bill at every price. Electrification then shifts what is left onto electricity, the one energy carrier Europe can produce at home from clean sources. Renewables and nuclear are what make that electricity clean in the first place. Weaken any one of them and the other two get harder and dearer, which is the practical reason the usual political trade-offs between them tend to backfire.
Take one ordinary example. A heat pump in a well-insulated home on clean electricity cuts the energy the building needs, replaces the gas boiler, and runs on a grid that keeps getting cleaner. That single device also pulls the household out of the gas import chain for good, and as a side effect keeps it cooler through the sort of summer Europe now gets most years.
Industry has large potential to improve
The part that gets least attention is industry, but the potential is vast. Electric motors run more than half of the EU’s entire electricity use, and a large share of them are older and less efficient than current standards allow. These are the pumps, fans and compressors humming in the background of every factory. Upgrading releases clean power for all the things we do want to electrify. Our recent analysis suggests up to 90% of industrial energy use could be electrified in the long-term.
What is adds up to by 2040
Stack the three levers together and the Commission’s own 2040 modelling gets interesting. Gas demand falls from 340 billion cubic metres in 2025 to about 101 by 2040, roughly a 70% cut, shared between efficiency, electrification and renewable supply. Oil falls further in proportion, from 350 to 98 Mtoe, a 72% drop, mostly because road transport goes electric. Across those fifteen years the avoided import bill works out somewhere between €1.4 and €2 trillion, depending where prices settle. That is money currently leaving the continent every year that would instead stay in it.
There is also a human story here. Europeans spend roughly 90% of their lives indoors, and on the Healthy Buildings Barometer more than 160 million of them live with damp, mould, cold, poor light or noise at home. Renovating those buildings cuts energy use and improves health in the same act, and the wider gains, in productivity and avoided healthcare costs, run into the hundreds of billions by mid-century. Efficient buildings also flatten the daily demand peak, which recent modelling finds lowers the cost of the whole system and not just the bill of the household inside.
The risk now
None of this needs a new strategy. The targets exist, the directives exist, the supply chains are being built, and in efficiency and electrification that industrial base is an asset Europe would be foolish to let drift offshore. What has been missing is the steadiness to see the plan through, and the policy lurches of recent years have left investors wary and made the people who train installers think twice. Most of the road to energy security is just a matter of delivering what is already agreed, and paying for it.
If there is a weak link in all this, it is the grid. Clean generation and new electric demand are both arriving faster than the wires and substations to carry them, and in several member states the connection queue has become a genuine brake on industrial electrification. Efficiency helps here as well, by holding the peak down so that less new network has to be built, but the honest answer is that grid investment and permitting still need to move up a gear to keep pace with the rest.
This article is based on a policy brief published 16 June 2026.