Key facts
- The International Energy Agency estimates electricity could account for 33% of global final energy consumption by 2035.
- The goal of 35% electrification by 2035 is a key platform for the upcoming COP31 climate conference.
- The prolonged closure of the Strait of Hormuz has contributed to volatile oil and gas markets.
- Rooftop solar adoption is increasing in Southeast Asia due to market fluctuations.
- Emerging markets in Africa, Asia, and Latin America are transitioning to clean energy faster than the US.
- Electrification could help countries save over $400 billion by 2035.
The world is approaching a critical goal of 35% electrification of final energy consumption by 2035, a target that has become a central theme for the upcoming COP31 United Nations climate conference in Türkiye. According to a new analysis from the International Energy Agency (IEA), electricity could realistically and affordably make up 33% of global final energy consumption by 2035, a significant increase from the current 23%. This upward trend is bolstered by electricity demand growing at twice the rate of overall energy demand over the past decade.
The IEA's report, commissioned by Türkiye and Australia in preparation for COP31, suggests that achieving the 35% target is within reach. This goal is linked to efforts to limit global warming to 1.5°C above pre-industrial levels, as outlined in the Paris Agreement. The current global energy price crisis, triggered by geopolitical events including the war in Iran and the closure of the Strait of Hormuz, has intensified the push for electrification. Countries reliant on fossil fuel imports are accelerating their transition to indigenous energy sources, ranging from nuclear power to solar energy.
Renewable energy sources like wind and solar are increasingly favored for their geopolitical stability, as noted by David Frykman, General Partner at Norrsken. "Wind and solar cannot be embargoed, blockaded, or shut off by a foreign power," he wrote. "Every terawatt-hour of domestic renewable generation is a terawatt-hour that no adversary can weaponize." This shift is particularly evident in Southeast Asia, where rooftop solar adoption is surging in countries like the Philippines, Indonesia, Cambodia, and Malaysia.
Developing nations are leading the charge in clean energy transitions, with many surpassing the United States in their reliance on solar power. The IEA estimates that a concerted effort to accelerate electrification could save countries over $400 billion by 2035, while also mitigating the impacts of climate change. Emerging economies are projected to increase global energy demand by over 60% by 2060, underscoring the urgency of expanding energy production through electrification and clean energy solutions.