The IEA today released a new high electrification scenario (HES) setting out a pathway to a global electrification rate of 35pc by 2035. This could add 1,400TWh to annual electricity demand and reduce oil demand by 18mn b/d, according to the agency.
By 2035, "faster electrification could mean the world is using 18mn fewer b/d of oil than it would have done otherwise, mainly the result of a rapid uptake of electric vehicles in this scenario", the IEA said. This compares with around 10mn b/d of oil demand avoided through electrification by 2035 under current market trends and policies, according to the organisation.
Because very little oil is used in electricity generation globally, electrifying transport under the HES would also reduce oil imports "regardless of the electricity generation mix", the IEA said.
The HES considers three electricity supply mixes based on the IEA's Net Zero Emissions, Stated Policies and Current Policies scenarios.
Under the HES, the increase in annual electricity demand would be twice that recorded over the past decade, according to the IEA. The scenario could reduce energy bills for fuel-importing countries by more than $400bn by 2035, it said.
The IEA said CO2 emissions from transport, buildings and industry fall by 40pc by 2035 under the HES, in line with international climate goals. Electrification supports commitments made at Cop 28 to double the rate of energy efficiency improvements and triple renewable capacity, it said. In regions lacking full access to modern energy, improving access to electricity and clean cooking has the greatest effect on raising the electrification rate.
The decline in emissions from the three sectors would be sufficient to put total energy-related CO2 emissions on a downward trajectory, regardless of the electricity generation mix, the IEA said. But accelerating electrification will require "scaling up investment in generation and grids, alongside the implementation of smarter and more flexible power systems", while threats to energy security will also need to be addressed. These include concentrated supply chains for key technologies and critical minerals.
"Efficiency, renewables deployment and electrification are three mutually reinforcing goals; alongside other technologies, these are critical to pathways that return temperatures to below 1.5°C in the longer term", the IEA said. After 2035, electrifying additional end uses will require technological innovation, while aligning electricity supply with a pathway to net zero by 2050 "would multiply the emissions benefits of electrification", it said.
"Net zero pathways ... also require action on technologies like nuclear power, bioenergy, carbon capture and storage, and low-emissions fuels like hydrogen and its derivatives", the IEA said.
The report will serve as the basis for discussions during a high-level energy transition dialogue later today on the sidelines of the UN General Assembly. It was produced at the request of the Turkish presidency of the UN Cop 31 climate summit and Australia, which is presiding over the climate negotiations.
