Europe’s energy transition is moving from ambition to implementation. 

On 17 July 2026, the European Commission published its Electrification Action Plan, setting an indicative target for electricity to account for 46% of final EU energy consumption by 2040. Today, that figure stands at 23%, with a 32% reference point set for 2030. 

The direction is clear: Europe wants significantly more of its industry, transport and buildings powered by electricity rather than fossil fuels. 

For the electrical manufacturing supply chain, that creates opportunity. It also puts greater pressure on the infrastructure, manufacturing capacity and materials needed to make electrification happen. 

Why electrification is moving up the agenda 

Europe has already made significant progress in cleaning up electricity generation. Renewables accounted for 49.9% of gross EU electricity consumption in 2025, compared with 15.9% in 2004. But electricity still represents less than a quarter of final energy consumption. 

The Electrification Action Plan aims to close that gap. 

The Commission estimates that reaching its 2040 target could reduce the EU’s fossil fuel import bill by €260 billion per year, strengthening energy security while supporting competitiveness and decarbonisation. 

But increasing electricity demand on this scale requires more than replacing one energy source with another. 

It means strengthening the power grid, expanding manufacturing capacity, improving access to equipment and materials, and accelerating the deployment of technologies across industrial sites, transport networks and buildings. 

The grid becomes a critical constraint 

Grid capacity is already one of the major barriers to electrification. The Commission acknowledges that grid connections can take years, while electricity can cost significantly more than gas. Its plan therefore includes measures designed to accelerate grid deployment alongside changes intended to reduce the price gap between electricity and fossil fuels. 

For TSOs and DSOs, growing electricity demand adds to existing pressure around connection backlogs, grid capacity, ageing infrastructure and equipment availability. For manufacturers, it increases the importance of transformer availability, standardised designs, factory throughput and supply security. 

The relationship between grid operators and the manufacturing supply chain will become increasingly important. Transformers, conductors, electrical steel, insulation, winding systems, monitoring equipment and other components all sit between Europe’s electrification targets and delivery on the ground. CWIEME Berlin’s value chain already connects these materials and technologies with transformer, motor and power applications. 

Industrial electrification moves closer to the factory floor 

Industry accounts for almost a quarter of EU energy demand, yet its transition from fossil fuels to electricity remains slow. The Commission identifies electricity costs, grid constraints, investment requirements and policy uncertainty among the barriers holding progress back. 

There is significant technical potential. The Commission points to industrial heat pumps and electric boilers capable of supplying process heat up to 400 to 500°C, while a July 2026 study identified more than 2,000 TWh of technical potential for industrial electrification by 2040. 

For electrical manufacturers, this brings the conversation directly into production. More electrified industrial processes mean growing requirements for motors, transformers, power electronics, components and the materials behind them. 

Electric motors are particularly important here. Industrial electrification, heat pumps, EV charging infrastructure, data centres and heavy industry all translate policy ambitions into demand for physical electrical equipment. 

Transport will connect more closely with the power system 

Transport remains heavily dependent on fossil fuels, which account for around 90 to 95% of the sector’s energy consumption. Electrification therefore represents another major source of future electricity demand. 

But electric vehicles are not simply new loads on the grid. 

Smart charging can shift demand towards periods when renewable generation is abundant or electricity prices are lower. Bi-directional charging could also allow EVs to feed electricity back into the grid, turning vehicles into distributed energy resources. 

That creates new requirements across electric motor technology, charging infrastructure, grid management and energy systems. 

Turning policy into physical infrastructure 

Europe’s Electrification Action Plan sets a direction, but delivering it will depend on the companies designing, manufacturing, specifying and operating the technology behind the power system. 

For engineers, procurement teams, R&D leaders, manufacturers and grid operators, the next phase of electrification will be shaped by practical questions: How can capacity increase? Where can lead times fall? Which technologies are ready to scale? And how can the supply chain support greater electricity demand without compromising reliability? 

These are challenges no single part of the value chain can solve alone. 

CWIEME Berlin brings the global electrical manufacturing supply chain together to connect the people building the technology that electrifies the world.