Table of contents

2.1.4. Energy demand

Energy demand is the fundamental driver behind the energy system. Aggregate energy demand in Europe appears to have stabilised in recent years, but important shifts in demand are still taking place between and within sectors. Energy demand is also impacted by climate change, primarily through changes in ambient temperature, which determine the demand for heating and cooling in buildings.

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Final energy consumption

Final energy consumption in Europe (EU+) grew until 2006, then declined until 2014, and started increasing again afterwards (Figure 2‑5). The transport sector accounted for the largest part of the final energy demand in 2016 (33 %), followed by industry (26 %), households (25 %), and services (14 %). The decline in energy demand was caused by the combined effects of large energy savings in industry and the residential sector. Most of the energy savings in industry are due to increasing energy efficiency and structural changes towards less energy intensive industries (Voigt et al., 2014). Relocation of carbon-intensive production outside of Europe, also known as carbon leakage, is one element of the structural change in the European industry (Paroussos et al., 2015). The recent economic crisis also played a role by reducing industrial output and thereby the total energy demand (EC, 2017a). In the residential sector, energy savings were primarily caused by more efficient heating and the diffusion of more efficient electric appliances (EEA, 2016d). Energy demand in the services sector and the transport sector is still increasing, despite the increasing fuel economy of the vehicle fleet. Rising energy demand in the services sector can be explained by economic growth and structural change. The growth of energy use in transport is primarily driven by an increase in air travel and road freight transportation.

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Figure 2‑5 Final energy consumption by sector in EU+

Source: Authors’ compilation based on data from (Eurostat, 2018b) [nrg_100a].

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Apart from the economic crisis of 2008, the EU’s economy has grown steadily in the period from 1995 to 2015, with GDP increasing by 3.4 % per year on average, and GDP per capita by 3.1 % per year. Since 1996, energy consumption has grown at a slower pace than GDP, actually decreasing in 2008 and between 2010 and 2014, and thereafter resumed growing slowly (EEA, 2018b). In other words, there has been a decoupling between GDP growth and energy consumption.

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Fuel mix in the transport sector

The transport sector is still strongly dominated by oil use. Oil accounts for 94 % of the sector’s energy consumption, and the sector accounts for 80 % of the total oil consumption in the EU. Alternative fuels, particularly liquid biofuels, LPG and natural gas have emerged as a small but increasing share of the transport energy mix since 2006. Driven by biofuel targets in the Renewable Energy Directive, the share of biofuels in the energy mix of the road transport sector has increased from a negligible level in the early 2000s to 3.5 % in 2016 (Eurostat, 2018b). Electricity has remained a small part of the transport fuel mix over time. Sales of hybrid and electric vehicles have grown dramatically in Europe in the last decade. They still represented only around 1.5 % of all new vehicles sold in the EU in 2017 whereas the share in Norway is more than 30 % (EEA, 2018a). Current and expected growth in electric vehicle uptake across Europe will significantly increase the share of electricity in the energy mix of the transport sector.

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Heating and cooling form a major share in the final energy demand

Space heating and cooling account for roughly half of the total final energy demand (Heat Roadmap, 2017). A large share of the energy consumption in the built environment (residential and tertiary) and industry is for heating purposes. The use of low-temperature heat for heating in the built environment accounts for 27 % of the total final energy consumption in the EU. Gas is the primary fuel used for this purpose. An additional 16 % of the final energy consumption is used for process heating in industry. In industry, 72 % of the total final energy demand is used for process heating (Heat Roadmap, 2017). This heat is primarily produced from natural gas (3 9%), coal (17 %), and other fossil fuels (19 %). The remainder comes from renewable sources, and the type of fuel used varies highly across industrial sectors. For high temperature process heating, hardly any renewable sources are used. Cooling, whether for industrial processes or in buildings, is currently a relatively small part of final energy demand. Currently cooling demand in the EU accounts for a mere 1.2 % of energy use in buildings (2016 data); however, it has undergone an impressive increase from 63 TWh in 1990 to 152 TWh in 2016 (IEA, 2018b) .

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