Introduction
The European Union’s electrification strategy looks to significantly increase the share of electricity in Europe’s final energy use, with the goal of obtaining a 69 per cent direct electrification rate by 2040.
This is an ambitious goal, and one that is easier said than done. That’s because before we can electrify, we must first address Europe’s capacity challenge – a key prerequisite for electrification of our energy system.
This challenge was thrust into the spotlight when the lights went out across Spain and Portugal in April 2025. Although the exact causes of the blackout are still under investigation, the incident underscores the urgent need for a new energy security paradigm. This framework is essential for enabling a smooth transition to a net-zero electricity system and minimising the risk of similar disruptions in the future.
With society plugging in everything from our appliances to our cars, devices, and heat pumps, demand for electricity is surging. Industry and emerging technologies such as artificial intelligence will further drive electricity demand, as will society’s need to use more air conditioning to keep cool on a warming planet.
As a result, the European Commission expects electricity demand to increase by as much as 60 per cent by 2030 (over 2023 rates). But if we are not able to meet our current demand, as the Iberian blackout illustrates, the question is: what happens when nearly every part of society goes electric?
A magic formula: combining demand-side solutions with energy efficiency
Traditionally, this increase in demand would be met by either importing or producing more energy. With Russia’s invasion of Ukraine and the EU’s subsequent determination to become energy independent essentially taking the former off the table, that leaves producing more energy.
But producing energy sustainably (i.e., via renewable sources) requires significant investment into new energy capacities and infrastructure and could actually increase the risk of blackouts, not to mention send energy system costs soaring. It would also mean meeting this increase in demand using an energy supply that is intermittent and that cannot be scaled up in response to demand.
There is, however, a winning combination that can help bridge the gap between energy demand and capacity: energy efficiency with demand-side solutions.
Let me turn to the building sector to explain.
Energy efficiency as simple as quality insulation
The good news is that making a building more energy efficient can be as simple as installing quality insulation. In fact, a well-insulated home will slow heat loss to the outside, allowing the flow temperature to go as low as 35ºC and still deliver a warm, comfortable living environment.
Furthermore, according to the Buildings Performance Institute Europe (BPIE), insulating a home’s attic and roof can save up to 14 per cent of residential heating energy. BPIE goes on to note that renovating homes with proper insulation would result in a 44 per cent reduction in the amount of natural gas used for heating. Furthermore, such renovations would ultimately save 45 per cent of the final energy consumption currently used to heat Europe’s residential buildings.
Making our buildings more efficient would also alleviate pressure on the grid – especially during periods of peak energy demand, that time of day when energy consumption skyrockets and the risk of blackouts increases.
According to a report commissioned by the European Climate Foundation, the European Insulation Manufacturers Association and the International Copper Association, energy efficient home renovations could cut peak heating demand by nearly half by 2050. This would reduce total energy system costs by EUR312 billion annually. It would also reduce distribution grid investments by EUR44.2 billion per year.
Helping homeowners make smarter decisions about energy use
Beyond the renovations themselves, one can further increase a home’s energy efficiency by installing an energy efficiency metre. By providing ongoing, up-to-date data on the energy efficiency of one’s home, these metres help homeowners make smarter decisions about energy usage. Energy efficiency metres can also improve the ability to use price signals, such as time-of-use tariffs, to help reduce peak demand, decreasing the need to overbuild grid generation capacity.
For instance, measured performance and energy efficiency metres can help us understand the exact energy performance of a building, making renovation more targeted and efficient. Such solutions also allow residents to understand whether a house can be preheated at times of the day when electricity costs are lower while still staying comfortable and warm. This could allow a house to be heated during the middle of the night when electricity is cheaper as opposed to during expensive peak periods.
A big step in the right direction
While making our buildings and homes more energy efficient alone will not solve Europe’s capacity challenge, it would be a big step in the right direction. However, for that to happen, energy efficiency solutions, such as insulation, must be given a front row seat within EU energy policy.
Knauf Insulation
Knauf is one of the world’s largest manufacturers of modern construction products and systems with over 300 plants in more than 90 countries and over 40,000 employees worldwide. It is 100% independent, family-owned, and proud of its strong European heritage and footprint. Part of the Knauf Group, Knauf Insulation has more than 40 years of experience in the insulation industry. It is one of the fastest growing and most respected names in insulation worldwide. It helps its customers meet the increasing demand for energy efficiency and sustainability in new and existing homes, non-residential buildings, and industrial applications.
