Why electrification is so important to the energy transition

Despite major innovations and investments, we are undoubtedly still facing an acceleration of climate change. The global economy continues to be fuelled with 80% fossil fuel-based energy and we are far from reaching carbon neutrality, which will require minimizing the use of fossil fuels to reduce greenhouse gas (GHG) emissions.

The good news, however, is that there is a low-hanging fruit available to us: electrification.

Electrification would make a significant contribution to the fight against greenhouse gas emissions. Moreover, it is economically viable and efficient.

The potential of electrification of final energy uses is significant, and most electrification technologies already exist. They are available at an industrial scale and are already competitive: electric vehicles (EVs) to replace fossil-fuelled vehicles, heat pumps to replace gas or oil-fired boilers in buildings and industries requiring low- to medium-temperature heat are just a few examples of electrification that is already taking place across national economies and at a global scale.

However, in the EU, the share of electricity in final energy consumption has stagnated at about 21% for the past few years. That figure needs to be 60% by 2050 if the bloc is to meet its climate and electrification targets.

Electrification technologies are still subject to occasional backlash — often fuelled by popular misconceptions — especially in Western countries where even climate change itself has become, in some places, a contentious political topic.

The speed of deployment of electrification technologies is also being jeopardized by increasing protectionism and trade barriers, many of which focus on energy transition technologies. Public policies must send the right signals in favour of electrification, for example with appropriate taxation and neutral and stable regulatory measures. This would support end-user change management and help to secure industrial players’ investments in the energy transition. These signals are key to the success of the energy transition.

EVs and heat pumps are three to four times more efficient than their fossil counterparts, and already present better total costs of ownership (TCOs), in addition to providing additional health and comfort benefits like emitting no more direct emissions in the transport sector, and the cooling enabled by the heat pumps.

Electrification must be deployed massively and urgently.

Electrification of final uses will increase demand considerably for low carbon electricity. To meet this need, we have to invest heavily in all low-carbon technologies. An electricity mix that includes nuclear and renewable sources like wind and solar will be the core of a resilient net zero GHG emissions power system. Therefore, it is key that, all over the world, public policies and regulatory frameworks consider all low carbon technologies for their energy mixes, and prioritize facilitating access to financing.

It is also key to invest in power grids to enable electrification and renewables deployment, and to develop flexibilities to integrate the growing share of intermittent electricity. In Europe, flexibility needs are expected to increase by two to three times by 2050 at all time scales (from intraday to seasonal), and will be fulfilled by various solutions, from demand-response flexibility provided by EVs’ smart charging, to batteries and flexible power production provided by nuclear, hydro and decarbonized thermal power.

Provided we collectively pursue our investments in the electric system and we anticipate and avert for the foreseeable bottlenecks in infrastructure deployment and raw critical materials, we have all the tools we need to fuel electrification with competitive low carbon electricity.

Decarbonization should be our compass. To make the energy transition happen, though, it is crucial that we minimize its overall cost to society. Therefore, we need to optimize the overall electricity system costs: power production costs, infrastructure and flexibility costs. We must also ensure a harmonized pace of deployment of electricity production capacities and uses.

Any delay in this electrification journey will dramatically increase the cost of the transition. This is a scenario we cannot afford — we simply do not have the time to waste.

To achieve our climate targets, this transition through electrification must happen now.