The International Energy Agency (IEA) has released a new analysis examining the potential to accelerate global electrification, finding that electricity could account for 33% of global final energy consumption by 2035, up from around 23% today, based on currently available technologies and energy prices seen before the latest supply shock.
The analysis was prepared at the request of Türkiye and Australia to inform discussions at COP31, with countries considering a proposed global target of 35% electrification by 2035. According to the IEA, the analysis places the proposed target within reach if cost-effective electrification opportunities are accelerated.
The report will inform discussions at the latest IEA-COP31 High-Level Energy Transition Dialogue in New York, held in the context of the United Nations General Assembly.
The IEA said electricity demand is expanding faster than overall energy demand and economic output, driven by the growth of air conditioning, data centres, advanced manufacturing and electric vehicles.
Electrification Could Reduce Energy Import Costs
According to the IEA’s faster electrification scenario, fuel-importing countries could reduce their combined energy import bills by more than US$400 billion by 2035, compared with 2025 levels.
The scenario could also reduce global oil consumption by approximately 18 million barrels per day by 2035, largely due to increased adoption of electric vehicles.
The agency said electrification could also contribute to lower emissions from transport, buildings and industry, which together account for more than half of global energy-related CO₂ emissions.
Under the faster electrification scenario, emissions from these three sectors could decline by 40% by 2035. The IEA said this would place total energy-related CO₂ emissions on a downward trajectory, irrespective of the electricity generation mix.
A rapid expansion of domestic low-emissions electricity generation could further strengthen the energy security and emissions benefits of electrification. The IEA also noted that faster electrification could support global goals to double the rate of energy-efficiency improvements and triple renewable energy capacity.
Regional Opportunities for Electrification
The analysis identifies opportunities to increase electrification cost-effectively across all regions, although priorities differ between countries.
In emerging and developing economies, opportunities include the electrification of agricultural water pumps, greater adoption of electric two- and three-wheelers, and increased use of electricity by small businesses in sectors such as food processing and textiles.
The IEA said current energy security concerns are also increasing momentum behind electric technologies as countries seek to reduce dependence on imported fuels.
Investment in Grids and Power Systems Needed
The IEA cautioned that achieving faster electrification will require increased investment in power generation, electricity grids and flexible power systems.
The report also highlights emerging electricity-security challenges, including concentrated supply chains for key technologies and critical minerals, cybersecurity threats, natural disasters and climate-related risks.
The IEA said policymakers will also need to address upfront costs faced by households and businesses to ensure that the benefits of electrification are broadly accessible.
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