METLEN Energy & Metals, together with Compass Lexecon, has completed a study entitled “Industrial power consumption in Europe: opportunities for the power system.” The analysis looks at the role of industrial electricity demand in Europe’s electricity system and draws several conclusions that are directly relevant to current policy discussions on flexibility, grid planning and industrial electrification.
A central finding of the study is that energy-intensive industries’ stable, predictable, and highly concentrated electricity consumption creates several benefits for the electricity system. By 2050, industrial power consumption will make up 40 to 70% of the EU’s electricity consumption, at a relatively low number of consumption points (demand concentration). This underscores industry’s crucial role in demand predictability, facilitating efficient dimensioning of both the grid and generation assets. By absorbing electricity during off-peak periods, industrial demand also helps integrate variable renewables and limits curtailment, negative price events and inefficient use of network infrastructure. In this sense, baseload industrial consumers are not a driver of flexibility needs, but rather a structural asset for the power system.
The study also assesses the flexibility potential of industrial processes in three energy-intensive sectors (aluminium, steel and cement), including temporary load reductions or interruptions. While flexibility can be delivered in certain sectors, it is highly process-specific and comes with operational risks, efficiency losses and costs, that must be remunerated. The analysis therefore contributes to the public discussion on flexibility by providing insights into the flexibility potential and limitations of industrial sectors, and the cost of providing these services, based on real data from European plants.
Finally, the study highlights that a cost-efficient and resilient power system will require both accelerated grid expansion and higher electricity demand, particularly from industry, to accommodate increasing shares of renewable generation. Penalising stable industrial consumption risks undermining, rather than supporting, this objective.
