IEA: A 35% electrification rate by 2035 can save $400 billion

en.Wedoany.com Reported - A special report released by the International Energy Agency (IEA) points out that with existing available technologies and with energy prices similar to those recorded before the current supply crisis, electricity could competitively meet about 33% of global final energy consumption by 2035, up from the current 23%, bringing the goal of a 35% global electrification rate within reach.

The report argues that faster electrification will strengthen energy security and generate positive economic effects. By 2035, global fuel-importing countries could reduce their energy import bills by more than $400 billion compared with 2025 levels; at the same time, global daily oil consumption could be about 18 million barrels lower than in other scenarios, mainly due to the rapid uptake of electric vehicles under this scenario.

This special report was released overnight, ahead of climate negotiations in New York, where countries are examining the adoption of a goal of achieving a 35% global electrification rate by 2035. The IEA says this outlook brings the 35% target discussed under the UN climate negotiation framework within reach. In addition, in the context of the Strait of Hormuz crisis, electrifying a larger share of global energy consumption will also be economically viable as long as energy prices remain at current levels.

Electrification can also reduce short-term emissions. Under the IEA's accelerated electrification scenario, carbon emissions from transport, buildings and industry would fall by about 40% by 2035, a rate of decline consistent with international climate goals and sufficient to put total energy-related carbon dioxide emissions on a downward trajectory, regardless of the energy mix used for power generation.

The report argues that electrification can quickly and at relatively low cost drive decarbonization across multiple economic sectors. The rapid expansion of domestically scaled-up low-emission electricity supply will further amplify the benefits for energy security and emissions reduction. Electrification helps achieve international goals, including doubling the pace of energy efficiency improvements and tripling total renewable energy capacity.

The IEA's sectoral analysis shows that the greatest potential for accelerated electrification lies in transport, thanks to strong growth in the electric vehicle market and a 90% drop in lithium-ion battery prices since 2010. The report says that about half of oil-based road transport demand can already be electrified competitively; if battery prices continue to fall along the cost curve at the pace observed in recent years, that share will rise to more than four-fifths.

Buildings also have significant electrification potential. The analysis shows that half of global space heating demand can be electrified competitively. In industry, the sectors with the greatest short-term electrification potential include textiles, food processing, pulp and paper, and certain processes in the chemical industry. The IEA's analysis concludes that about 40% of energy consumption related to low- and medium-temperature industrial applications can be electrified cost-effectively.

Bowen said in the report's preface that this special report on electrification comes at a critical moment; the global energy crisis has prompted many countries to seek solutions that can strengthen energy security while continuing to provide affordable, reliable energy.

The IEA's analysis shows that electrification can address these challenges while promoting economic growth and reducing emissions. The report argues that an electrified economy powered by clean energy and supported by modern grids and energy storage systems is a durable solution. One of its important conclusions is that the means needed to build an electrified world are already available today.