Fuel-importing countries could cut their energy import bills by more than $400 billion by 2035 if they electrify fast, the International Energy Agency says. That is the economic prize inside a special report the agency released on September 22.
The headline finding: electricity could cost-effectively supply 33 percent of the world’s final energy use by 2035, up from 23 percent today, using technology that exists now. The agency calculated that at energy prices from before the current supply shock. At today’s higher prices, driven by the Strait of Hormuz crisis, even more of the world’s energy use would pay to electrify.
Within striking distance
Türkiye, the COP31 President, and Australia, the COP31 President of Negotiations, asked for the study. It was released at the IEA-COP31 High-Level Energy Transition Dialogue in New York, during the UN General Assembly, where governments are weighing a global electrification target of 35 percent by 2035, known as “35×35.” At 33 percent, the IEA says, that goal is within striking distance.
Electricity demand has outrun economic growth in recent years and has risen nearly twice as fast as overall energy demand. The agency points to air conditioning, data centres, advanced manufacturing and electric cars.
Oil and money
In the faster scenario, the world would burn 18 million fewer barrels of oil a day by 2035, mostly thanks to electric vehicles. Carbon dioxide emissions from transport, buildings and industry, which together make up more than half of energy-related CO2, would fall 40 percent by 2035, a pace the IEA says fits international climate goals.
Money has to move first. Investment in electricity supply and grids is set to reach $1.6 trillion in 2026, and $2 trillion once spending tied to electric vehicles and heat pumps is counted. The agency warns that the plan depends on more generation, bigger grids and smarter, more flexible power systems. It also lists threats to electricity security: concentrated supply chains for critical minerals, cybersecurity risks and climate hazards. Policymakers, it adds, will need to help some households and businesses with the upfront cost.
For emerging and developing economies, the agency singled out electric agricultural water pumps, electric two- and three-wheelers in dense cities, and help for small food and textile businesses to use more electricity.
Nick Wayth of the World Resources Institute’s Polsky Center said the timing matters, because “disruptions around Hormuz and higher energy prices crunching households’ budgets have once again exposed the risks of relying on fossil fuels.” Reaching 35×35 cost-effectively “is already within reach,” he said, but it needs faster grid expansion plus storage, efficiency and flexible demand. COP31 opens in Antalya on November 9, and that is where the target faces its next test.
Sources
- IEA: 33% global electrification is within reach by 2035
- Cost-effective electrification could raise electricity share to 35 per cent by 2035: IEA
