As the clock ticks on net-zero goals, electrification is emerging as a key lever for decarbonization. The COP31 Presidency has set a goal of increasing electricity’s share of final energy demand from 20 percent today to 35 percent by 2035.
To achieve this, households, institutions, and businesses must replace non-electric uses of energy, such as fossil fuel-powered technologies and processes, with electric alternatives. Moreover, electricity systems must be able to reliably supply the additional demand.
Efficiency has long been recognized as a key ingredient—in fact, almost a first response—in decarbonization. Efficiency reduces electricity demand, thereby easing pressure on grids and reducing the need for new generation and costly infrastructure investments.
As households, institutions, and businesses switch to electrical appliances and electricity demand grows, every unit of energy saved reduces the amount that needs to be generated, transmitted, and paid for. Efficient appliances and equipment can therefore help electricity systems accommodate higher demand from electrification, keeping the transition achievable.
But efficiency can do more: It is also a key catalyst for electrification that could significantly accelerate the process by making the switch to electricity a more practical and attractive decision.
Electrification is taking different forms in different parts of the world. Some households, institutions, and businesses in low- and middle-income countries are connecting to electricity for the first time, migrating away from traditional fuels (for example, using an induction cooktop instead of cooking with charcoal) or using electricity to mechanize an activity they used to do by hand (such as using a solar-powered water pump instead of a manual one).
In countries where fossil fuel–powered appliances and equipment are widely used, technologies like electric vehicles, heat pumps, and electric cooking technologies are enabling electrification.
Across these different contexts, a person’s decision to electrify their energy use depends not only on whether an electric alternative to their current process exists, but also whether they feel confident that an electric appliance will work reliably, has a competitive purchase price, and is affordable to operate and maintain.
As a result, what makes appliances and equipment efficient is also what accelerates electrification. Energy-efficient appliances:
- are tested to ensure they meet quality and efficiency standards
- include identifiers, such as labels, that differentiate them from inefficient ones.
These characteristics give consumers confidence in the product’s viability as they transition to electricity.
Energy savings from efficiency, and the resulting cost savings over the lifetime of the appliance or equipment, can make electrification a financially viable option for consumers and increase the economic benefits they can expect from it.
For example, best-in-class efficient industrial heat pumps can reduce electricity consumption by 20 percent to 35 percent compared to less-efficient alternatives. It’s these kinds of savings that provide people and industries with the incentives, rationale, and confidence to electrify.
To accelerate electrification, governments must begin to link energy efficiency to electrification targets, broadening the scope of such policies to make it easier for people, institutions, and businesses to make the switch.