IEA Raises EU Power Demand Forecast to 2.1% Growth in 2026 as Heatwaves Drive Cooling Load
The IEA's upward revision to 2,574 TWh signals stronger-than-expected European electricity consumption driven by weather extremes at both ends of the calendar.
The International Energy Agency raised its full-year forecast for EU electricity consumption to a 2.1% increase in 2026, revising up from an earlier projection, with the bloc's power use expected to reach 2,574 TWh, Montel reported on Wednesday (2026-07-23).5
The revision carries weight for European power and gas markets. Consumption "staying strong" through the second half of the year, in the IEA's own language, means the cooling-season load that pushed the first half higher is not a one-off — it extends the demand picture into months when traders typically begin pricing winter fundamentals.5
The IEA attributed the upward revision to three overlapping drivers: ongoing electrification, colder winter weather in the first quarter of 2026, and increased cooling demand during heatwaves. The combination is not symmetrical. Cold winters raise heating demand in a relatively predictable way. Heatwave cooling spikes are harder to schedule around and tend to compress generation margins quickly when they coincide with low wind output.5
Growth of around 1.3% is forecast for 2027, the agency said, implying the acceleration is partly weather-driven and partly structural. The electrification component — heat pumps, EV charging, industrial switching from gas — does not reverse. European heat pump sales reached approximately 2.62 million units in 2025, up from 2.38 million in 2024, bringing total installed capacity across Europe to around 28 million units, according to industry data. That installed base amplifies the weather sensitivity of the demand curve; every heatwave now moves more electricity than the same heatwave would have five years ago.3
For gas, the implications are indirect but real. Higher power demand, if partly met by gas-fired generation, increases competition for storage molecules at a point when Europe already faces a tighter refilling season. The Oxford Institute for Energy Studies estimated in May (2026-05-20) that Europe would need 6% more gas — roughly 6 billion cubic metres — than in 2025 to enter winter with equivalent storage volumes, even accounting for weaker underlying demand.1 The IEA's demand upgrade does not automatically close that gap, but it does reduce the headroom. ICE Endex TTF front-month was trading at €61.90/MWh on Thursday (2026-07-24) morning.
The 2.1% forecast also sits within a longer structural backdrop the IEA has been tracking. Its Electricity 2026 report, published in May (2026-05-20), projected global power demand growth exceeding 3% annually through to 2030, with renewables and nuclear together reaching 50% of the global generation mix by the end of the decade. Solar PV alone is expected to add more than 600 TWh of annual output by 2030.2 For the EU specifically, that supply build-out is supposed to absorb much of the incremental demand. But renewables don't smooth intraday demand spikes, and heatwaves tend to arrive on still, high-pressure days that suppress wind output.
Eurelectric president Markus Rauramo put a longer arc on the demand trajectory in June (2026-06-03), arguing Europe would need to roughly double its electricity consumption and halve its gas use to meet its climate targets. Even if that framing reflects an aspirational scenario rather than a near-term forecast, it points in the same direction as the IEA's revised numbers: European grids are absorbing more load faster than earlier models assumed.4
The 2.1% figure will matter most for utilities and system operators pricing capacity and balancing services through summer's remaining weeks. But the IEA's note that second-half consumption is expected to stay strong sets up a specific question for winter preparation: how much of that second-half demand is baseload electrification — predictable, plannable — and how much is weather-sensitive cooling load that may simply not repeat? The agency has not broken those components out publicly, and that distinction shapes whether the 2027 forecast of 1.3% growth represents a genuine deceleration or a reversion to mean after two unusually weather-affected halves.5
German power was last quoted at €132.45/MWh on Thursday (2026-07-24) morning. The degree to which the remaining summer drives further upward pressure depends on how long elevated temperatures persist across the continent's major consumption centres.5