The global electricity supply is also being transformed by the rise of variable renewable sources of generation such as wind and solar PV. While this puts electricity at the forefront of the clean-energy transitions, providing access to the nearly 1 billion currently deprived, helping cut air pollution and meet climate goals, these changes will require a new approach to how power systems are designed and how they operate. Otherwise, rising electrification could result in less secure energy systems, underscoring the urgent need for policy action in this critical sector.
Electrification of end uses is a promising pathway to decarbonising energy use
Electricity today accounts for 19% of total final consumption of energy, a share that is set to increase as demand growth for electricity outpaces all other fuels. In the New Policies Scenario, the share reaches 24% in 2040, a far cry from full electrification. While there is considerable scope to push electrification beyond this level, not all end-uses can be readily electrified, such as high-temperature heat demand in industry, long-haul aviation and shipping, where electrification is harder to achieve due to either economic or technical barriers.
Introducing the Future is Electric Scenario (FiES)
Policy choices will have a great impact on how the electricity sector develops in the future, especially what key levers are used to boost electricity demand growth. Policies and regulations play a determining role in unlocking higher electrification: encouraging efforts to accelerate the rollout of electric charging infrastructure for vehicles, simplifying switching to electric heating in both buildings and industry, or pushing to achieve universal access to electricity or improving standards of living.
The analysis this year introduces the Future is Electric Scenario (FiES) to examine what would happen to electricity demand if economic opportunities for electrification were maximized. For instance, in the FiES by 2040, almost half of the car fleet goes electric; electricity makes rapid inroads into heating needs for buildings and industry; a digital economy connects nearly all consumer devices and appliances; and full electricity access is achieved.
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The blog: the new economics of energy storage