In a decarbonized power system, extended electrification in the transport and buildings sectors has the potential to reduce fossil fuel use by at least 10-20% by 2040, leading to a reduction in CO2 emissions of 2-4GT per annum. Electrification of some industrial processes could increase this potential even further.

This is the main conclusion of a joint study carried out by the Climate Policy Initiative and Copenhagen Economics for the Energy Transition Commission.

Currently, 78% of energy used by the end-use sectors (transport, buildings and industry) comes from fossil fuels, of which 17% comes from the use of electricity generated from fossil fuels.

Electrification has two direct benefits:

1- Energy productivity benefits: Electricity delivers an equivalent energy service with less energy input, because it avoids conversion losses associated with burning fossil fuels.

2- Decarbonization benefits: Greater electrification of several energy end uses, when coupled with decarbonization of the power supply, could accelerate decarbonization by extending its benefits to a broader range of economic activities.

This study relies on the assumption that the decarbonization of the power system is possible at low-cost, building on another piece of research carried out by Climate Policy Initiative for the Energy Transitions Commission, which is available here.

In the transport sector, electrification could reduce fossil fuel use by at least 10 to 30% if the right investments in electric transport infrastructure are deployed.

This assumes a 50% electrification of light road vehicles by 2040 and very limited electrification of heavy duty vehicles, although innovation creating new opportunities in freight transport cannot be ruled out.

In the buildings sector, expanding the electrification of water heating, space heating and cooking could replace 35% of fossil fuel use by 2040.

Although buildings are already electrified to a relatively large degree, especially in terms of appliances and lighting, further progress is possible. Technologies are widely available, but key barriers lie in the high capital cost of some of these technologies, the lack of incentives to encourage tenants to make the necessary investments and the low turnover rate of large equipment.

In the industry sector, this study has conservatively assumed no further electrification by 2040.

Currently, the share of electricity in energy consumption varies considerably across sectors, from 54% in aluminum production to 10% in chemicals and petrochemicals. Significant R&D efforts are still required to develop and deploy electrified processes, such as electro-thermal technologies, in a range of industrial sectors. Alternative decarbonization routes are also likely to play a role, including bioenergy, hydrogen and carbon capture.

About the Energy Transitions Commission:

The Energy Transition Commission (ETC) is a uniquely diverse group of individuals and organizations from across the energy landscape (investors, incumbent energy companiesindustry disruptors, equipment suppliers, non-profit organizations, and research institutes), and from the developed and developing worlds. We aim to accelerate change towards low-carbon energy systems that enable robust economic development and limit the rise in global temperature to well below 2°C. ,