Industrial Electrification Requires More Than Technology, EUSEW 2026
Thursday 11 June 2026, Brussels: High upfront investment costs, grid constraints and electricity prices remain the biggest barriers to industrial electrification, according to speakers at the EU Sustainable Energy Week (EUSEW) panel "Paying for the Power Shift: Upfront Costs of Industrial Electrification."
As EUSEW celebrates its 20th anniversary, industry representatives, financiers and policymakers agreed that electrification is essential for reducing dependence on fossil fuels, strengthening industrial resilience and improving European competitiveness. However, progress has been slower than expected, with electricity's share of final energy consumption increasing only modestly from around 20% in 2006 to approximately 23% today.
"The question is no longer whether electrification matters to industry," participants stressed, "but how to accelerate it in a way that companies can invest in confidently."
A recurring theme throughout the discussion was the challenge posed by high upfront capital expenditure (CAPEX), which remains one of the biggest barriers to industrial electrification.
Financing the transition
Isabel Blanco Alvarez, Head of Impact for Energy, Infrastructure and Climate at the European Bank for Reconstruction and Development (EBRD), outlined how financial institutions evaluate electrification projects.
According to Blanco Alvarez, investment decisions extend far beyond technological performance. Investors assess technical, environmental, social and financial factors, including technology maturity, future electricity prices, company balance sheets and repayment capacity.
"Projects must ultimately make financial sense and demonstrate a credible payback period," she noted.
Chemical industry calls for stronger policy support
Representing the European Chemical Industry Council (CEFIC), Senior Energy Manager Nicolai Romanowski highlighted the growing importance of electrification for the chemical sector.
He explained that many successful projects currently combine electrified processes with conventional fossil fuel-based systems in hybrid configurations.
Romanowski called for harmonised regulatory frameworks, stronger support for anticipatory grid investments and greater involvement from Member States. He also urged governments to make better use of state aid mechanisms and available flexibility to reduce electricity taxation for industrial users.
Grids should be recognised as a public good.
Energy efficiency and electrification must go hand in hand
Paula Iwaniuk, Vice President and Group Head of EU Government Relations and Public Affairs at ABB, presented examples demonstrating the immediate benefits of electrification technologies already available today.
Electric motors account for approximately 45% of global electricity consumption, she noted. By integrating Variable Speed Drives (VSDs), companies can reduce electricity consumption by between 20% and 50%, often achieving payback periods measured in months rather than years.
Electrification and energy efficiency, should be treated as complementary strategies rather than separate policy objectives.
One ABB-supported project in Bulgaria generated savings of approximately €3 million. Yet despite the availability of proven technologies, adoption remains slower than expected. This is why ABB calls for closer coordination between industrial planning and grid development, warning against siloed approaches to energy policy.
Confidence in Europe's electricity system
Marion Labatut, Director of European Affairs at EDF, argued that Europe's electricity system is well positioned to support increased electrification.
As Europe's largest electricity producer, EDF views dependence on imported fossil fuels as one of the continent's most significant energy vulnerabilities.
Labatut highlighted the reliability and resilience of European grids, describing them as among the most advanced in the world. However, she acknowledged that faster grid connections and anticipatory network investments would be essential to meet future industrial demand.
To improve investment confidence, we need reduced electricity taxation, expanded eligibility for existing energy-efficiency support schemes, and targeted public funding mechanisms.
European Commission wants measures that will help ‘electricity champions’
Closing the discussion, Lelde Kiela-Vilumsone, Team Leader for National Energy and Climate Plans, Financing and International at the European Commission's Directorate-General for Energy (DG ENER), outlined ongoing efforts to support industrial electrification.
A current example is working on measures to improve grid connection processes, develop new approaches to network charges and promote demand-side flexibility. Additional financing opportunities are expected through initiatives such as the Industrial Decarbonisation Bank, the European Investment Bank, the Innovation Fund and future energy-efficiency financing programmes.
Kiela-Vilumsone also highlighted the importance of ensuring that electricity is taxed more favourably than fossil fuels where appropriate, reinforcing incentives for companies to transition toward cleaner energy sources.
Shared priorities across the sector
Despite representing different parts of the energy ecosystem, speakers largely converged around several common priorities.
High upfront investment costs remain the primary obstacle to industrial electrification. Grid infrastructure, connection delays and congestion continue to constrain projects across Europe. Reforming electricity taxation emerged as another recurring recommendation, with several speakers arguing that current tax structures can weaken otherwise viable business cases.
The discussion with broad consensus that industrial electrification goes far beyond investing in new technologies. It also depends on access to grid infrastructure, affordable and predictable electricity prices, and a clear understanding of which technologies are available today and can deliver a sound business case for long-term industrial resilience.