When this year's annual UN climate conference, COP31, kicks off next week in the Turkish city of Antalya, brace yourself for a lot of talk about electricity. The summit's hosts want governments to back a new goal to raise electricity's share of final energy demand from just over 20 per cent today to 35 per cent by 2035. In other words, they want more cars to run on batteries instead of petrol, and more homes to be heated with electric heat pumps, not gas boilers.
The target is only voluntary but it's a good idea, for the climate and for our wallets. About 80 per cent of the global population lives in countries that are net importers of fossil fuels. Those fuels can get expensive in a crisis, as this year's war in Iran has shown.
But even without such turmoil, the International Energy Agency reckons import bills could fall by more than $400bn a year by 2035 if those countries boosted their electrification rates. Much upfront investment would be needed but electric tech's lower operating costs mean the pay-off should be lower energy bills across the world by 2035. Electricity can also cut emissions, especially if it comes from renewables.
As it happens, wind and solar are surging so much that renewables last year narrowly overtook coal's 33 per cent share of global power generation for what the Ember energy think-tank says is the first time in a century. So the COP31 electrification goal should be good news for the green energy transition. But hang on, you may be thinking.
Isn't that transition a pipe dream? Hasn't the share of fossil fuels in the global primary energy mix barely budged, from 85 per cent in 1990 to about 80 per cent today? And doesn't that mean that all that new green power is more of an addition than a transition, which is proving harder than thought? This is pretty much what the energy analyst Daniel Yergin wrote in Foreign Affairs last year, and what other prominent experts have argued for years, along with oil executives. They are not entirely wrong. Fossil fuels do still dominate the global energy system, but not in the way you might think.
And replacing them may not be nearly as daunting a challenge for governments as that persistent 80 per cent-plus share of primary energy suggests. The clue is in the word.
Source: Financial Times Companies · Summarized by HeadlinesBriefing