The IEA forecasts that electricity consumption will grow at around 4% per year through to 2027, driven by industrial growth, data centre expansion, digitisation and decarbonisation.
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As a result, consumption is expected to skyrocket over the coming decades. Is the UK ready to meet this demand? In my opinion, not yet.
Over the past decade, electricity’s share in total energy demand has increased, but only by around 2% (around 20% of total energy mix). According to the IEA, electricity demand will keep growing over the next decade, while overall energy demand ‘runs flat’. Interestingly, the share of electricity – and therefore electrification – is going to increase in the mix going forward.
But where’s the growth coming from? Sources linked to regular economic expansion, represent around half the growth, such as new industrial facilities, new buildings, more infrastructure for public transportation – all this creates demand for more electricity. Then the other half comes from the new developments that come on top of natural economic expansion, like data centres, AI, and other emerging services. According to our research, AI-driven technologies could increase Europe’s electricity demand by up to 20% over the next decade.
And the extra half, as I’m calling it here, comes from existing energy usage going electric. There are the big-ticket items like mobility – electric mobility – which experienced a 23% increase last year. There are other electrification patterns, like buildings switching away from fossil fuel heating to electric HVAC systems. It’s a similar story in industry.
Yes, that adds up to 150%. And no, it’s not a mistake – that’s the whole point. This shift won’t be gradual or predictable. It’ll come fast and from everywhere - the usual suspects, the wild cards, emerging markets, and corners no one’s watching – and all at once.
Bridging the gap between capacity and demand
However, as electrification accelerates, the availability of infrastructure – especially grid infrastructure – will become a bottleneck. The faster we grow as a society, the more technology develops, the sharper the shortage. For example, businesses eager to invest and expand, no matter their industry, size or purpose, might be faced with a lack of access to the grid. Renewables can take a long time to be connected to the grid – up to 15 years in the UK – and this needs to be accelerated to meet demand, so that UK businesses can grow through cheaper access to cleaner energy.
That disconnect between business readiness and available infrastructure will define the years ahead. Especially as electricity demand and electricity prices keep rising. Naturally, businesses that have done all the efficiency savings they can, will be negotiating for greater access. The most prepared players have been thinking this way for years, partnering with those who can help, through digitalisation and smarter systems, to make every watt count.
Expanding the Role of Distributed Energy
Without access to the infrastructure, how can businesses build the capacity they need for their own use? This is where distributed energy solutions, like rooftop solar, come into play. Not only can these technologies be ramped up much faster than larger infrastructure projects, they’re also relatively easy to deploy.
Historically, wind energy projects in the UK and Europe faced lengthy delays for grid connections and planning permissions. Fortunately, attitudes are changing with planning approvals for wind, battery storage and solar projects in the UK almost doubling in the past year.
So, the appetite is there, and while we need to continue developing large-scale infrastructure, for me, the solution lies in distributed energy – in both buildings and industry. Many of these solutions are already viable and being used, but it’s generally underleveraged. In the US, there’s a clearer understanding that distributed energy is viable, but in the UK and Europe, it’s less developed. That said, there are promising examples – like Schneider Electric’s new flagship building in Grenoble, France. Called IntenCity, it’s a model of energy efficiency, integrating active solutions and collecting data to drive future research and innovation.
Pretty soon, distributed won’t just be a nice-to-have, it will become a necessity.
Shaping Smarter Energy Projections
As economies modernise, they naturally decarbonise. Mobility improves – with better cars, fewer cars, and more alternatives. Buildings become more efficient, better insulated, and powered by distributed energy. Industry gets cleaner and progress drives emissions down. This is reflected by our own study that shows Europe can save €250 billion per year by 2040 through accelerated electrification.
A common mistake I see in the energy transition is static thinking. Ask yourself – what were you doing 30 years ago? Then look at where we are today. Most political projections assume the next 40 years will look much like today: a growing population, a bigger economy, slightly more energy use. But not much more. That’s not how change works. The only area where this shift is starting to register is with data centres, AI, and related technologies. People are beginning to realise that something big is emerging. But no one knows how big.
At Schneider’s Sustainability Research Institute, we often make projections about how these changes might unfold. Back in 2021, we developed a set of scenarios that already leaned heavily into electrification. But looking at the pace of change today, it’s clear we were only scratching the surface. The future is arriving faster and with more complexity than most models anticipated. That’s not a failure of foresight, but a sign of just how rapidly the fundamentals are shifting. In that sense, our scenarios weren’t just projections – they were an early part of the very future we’re now seeing take shape.