Overview
Europe will need an estimated €2.2 trillion to €3.5 trillion of power‑system investment over the next ten years to support the continent’s electrification agenda and the rollout of artificial‑intelligence infrastructure, according to Goldman Sachs.
Consumer Electricity Bills
Under a base‑case scenario that assumes slower data‑centre development and missed EU electrification targets, average electricity bills for households in the EU and the United Kingdom are projected to rise by about 2 % per year through 2035. A faster deployment of electric vehicles, heat pumps and AI‑related infrastructure could lift the annual bill growth to around 4 %, still below the 5 % average increase experienced by European households over the previous decade.
Inflationary Impact of Investment
Consumers will fund part of the investment through electricity charges, but 35 % to 40 % of the planned capital spending is expected to have little or no inflationary impact, or even to reduce costs. Grid‑maintenance expenditures fall into this category, and the addition of new on‑shore renewable capacity could further lower power prices.
Cost‑Spread Effects
Higher electricity consumption will spread fixed network costs across a larger customer base. Increased demand from data centres, electric vehicles, heat pumps, air‑conditioning units and industrial boilers is likely to reduce grid fees on a per‑unit basis.
Regional Bill Variations
Regional differences are pronounced. In the United Kingdom and Germany, annual household electricity bill increases could reach 5 % to 8 %, reflecting higher grid‑investment needs. Germany may employ fiscal support measures to limit the consumer impact. Conversely, Italy and Spain are expected to see little change in power bills through 2035, helped by slower growth in grid fees and a normalising trend in wholesale electricity prices.
Beneficiaries
Utilities and equipment manufacturers are positioned to be the main beneficiaries of the investment wave. The power‑sector investment is projected to underpin an industry earnings “super‑cycle,” with buy‑rated companies expected to generate an average annual earnings growth of about 14 % through 2030.
Household Energy Spending
Full household electrification could still lower total energy expenditure. While switching from fossil fuels to electric heating and transport would nearly triple household electricity consumption, the resulting savings on petrol, diesel and gas could produce overall household energy cost reductions of approximately 30 %, equating to about €1,200 per family each year.