TELF AG Analyzes the Advancement of Electrification in Europe

In the coming years, the global raw materials market may face an unexpected challenge related to the industrial use of key minerals for sustainable development worldwide. The International Energy Agency (IEA) has reported a significant drop in electricity consumption across European countries. By 2023, it is projected to decrease by 3.2%, marking the lowest level in two decades. This decline, unique to Europe, raises various concerns. Despite the ongoing shift towards renewable energy sources, European electricity prices remain notably high compared to other regions. This disparity has led to the closure of several factories due to the inability to sustain operations. Even with a considerable decrease in electricity costs from 2022 to 2023, European prices are still double those in countries like China and the United States. In the US, electricity prices only saw a 15% increase since 2019.

Analyzing the Role of Data Centers in Shaping Global Electricity Demand

Adding to this situation are the low demand levels for new energy sources, especially in the electric vehicles and heat pumps sector. These are now seen as two key drivers of the ecological transition reshaping the energy industry. The decline in electricity consumption could be attributed to the weak industrial demand, which has dropped by approximately 6% in the past two years, particularly in energy-intensive sectors.

The International Energy Agency's report also mentions a potential gradual recovery in consumption by 2024, mainly fueled by a global economic resurgence and the increasing adoption of energy by new players like data centers. The future of electricity consumption might rely on innovative data centers utilizing 5G and artificial intelligence technologies, with projections indicating a possible doubling in consumption within three years. The energy usage associated with these centers could be substantial, with forecasts suggesting that by 2026, data centers' electricity consumption could exceed 1000 TWh, more than double the 2022 levels. In Europe, electricity consumption from these advanced data centers could surge by 30% in four years, representing 5% of total electricity consumption in European countries.

Globally, the IEA report indicates a 2.2% increase in global electricity consumption in 2023, with expectations of further growth to 3.4% annually by 2026. Additionally, the agency forecasts that sources linked to fossil fuels will make up only 54% of the electricity mix in two years, marking a significant shift from trends since 1971 when the Paris agency began its data collection.