The International Energy Agency estimates that electricity could account for 33% of global final energy consumption in 2035, compared with around 23% today, if policies and investment accelerate its adoption. This growth would span transport, buildings, industry and digital uses. It would change how economies consume energy, replacing some fuels burned directly with electricity generated and delivered through grids.
This prospect is gaining importance as disruptions to fossil fuel supplies highlight the vulnerability of importing countries. In an accelerated electrification scenario, savings on energy import bills could exceed $400 billion by 2035 compared with 2025. Global oil demand could also be around 18 million barrels per day lower than it otherwise would be. These results nevertheless depend on assumptions about electric vehicles, heat pumps, industry and electricity generation.
Replacing the direct use of fuels
Electrification means powering equipment with electricity rather than fuel consumed on site. In transport, it mainly involves electric vehicles and electrified public transport. In buildings, heat pumps can replace gas or oil boilers. In industry, some thermal processes can be electrified, although very high-temperature sectors and certain chemicals remain more difficult to transform.
Energy savings partly reflect the efficiency of the technologies. An electric motor generally converts more energy into motion than a combustion engine, and a heat pump can deliver several units of heat for each unit of electricity consumed under suitable conditions. However, these gains do not automatically lower bills or emissions. Electricity costs, the generation source, the infrastructure required and operating hours determine the outcome for households and businesses alike.
Applications are not advancing at the same pace in every region. Electric vehicles can develop rapidly where models are available, charging is accessible and prices allow. The electrification of heating depends on building insulation, climate, relative gas and electricity prices, and local grid capacity. In industry, equipment modernisation must align with factory investment cycles and the reliability that processes require.
Energy security shifts towards the electricity system
Reducing dependence on imported fuels can strengthen energy security, but it does not eliminate risks: it partly shifts them towards electricity generation, grids, equipment and the minerals required. A country that electrifies without diversifying generation may replace one vulnerability with another. It must meet demand when wind, sunshine or hydropower are less available and move energy from generating areas to consuming areas.
Grids are therefore a prerequisite. Investment in lines, transformers and distribution systems must often precede the arrival of vehicles, heat pumps or new factories. When grids are congested, connections are delayed and consumption peaks can become costly. Planning must incorporate new loads, flexible resources and exchanges with neighbouring countries.
Storage and demand management can ease some constraints. Vehicle batteries, when connected to the grid under appropriate rules, could sometimes support balancing. Industrial users can shift part of their consumption, while suppliers can adjust their offers by time of day. These solutions nevertheless require meters, control platforms, clear tariffs and consumer protections.
Investment must keep pace with uses
Electrification requires capital across several segments at once: power plants, grids, charging stations, buildings, industrial equipment and storage systems. Costs do not fall solely on electricity producers. Households may need to change their vehicles or heating systems; businesses must renovate their facilities. Poorly designed support policies risk financing equipment that will not be used enough or primarily benefits consumers already able to invest.
Targeted instruments can help distribute costs and accelerate adoption where gains are high. Efficiency standards, financing programmes and tariffs reflecting peak hours can strengthen the economic case. Predictable rules are essential, however: suppliers and industrial companies commit to investments over several years and must be able to anticipate changes in standards, support and tariffs.
Emerging economies face a particular challenge. Their electricity consumption rises with energy access, industrialisation and urbanisation. Electrification can limit oil demand growth and improve urban air quality, but it requires wider access to reliable electricity. Investment in grids and generation must accompany rising uses without increasing public debt unsustainably or driving prices high enough to hurt households.
Measuring progress beyond the electrification rate
The move from 23% to 33% is a useful indicator, but it is not enough to assess the transition’s success. Policymakers must track actual electricity system emissions, the total cost of energy services, reliability, access and the ability of grids to absorb new loads. Electricity generated by highly carbon-intensive plants can reduce direct oil or gas consumption while increasing emissions elsewhere.
The minerals needed for batteries, grids and generation equipment add another challenge. A more electric transition requires diversified supply chains and recycling capacity while managing the impacts of extraction. Mineral-producing countries can benefit from this demand, but revenues and local processing depend on industrial choices and market conditions that are not automatic.
The objective presented by the IEA highlights the scale of the transformation under way without guaranteeing that it will happen by itself. Potential savings on imports and oil depend on coordinated investment and stable policies. Electricity can reduce exposure to oil shocks, but only if grids, generation capacity and flexibility systems evolve at the pace of uses. The next decade will therefore be decisive in determining whether electrification becomes an economic and strategic advantage or a new source of pressure on infrastructure.