Investment and transition plans need to accelerate significantly if the COP31 presidency’s ’35×35′ electrification pledge is to be achieved, the World Benchmarking Alliance (WBA) has said in a new report.
The pledge, which seeks to raise electricity‘s share of final energy consumption to 35% by 2035, gives ‘governments and companies a shared, measurable reference point’, the WBA said in its Powering The Transition report, adding that existing technologies could already cost-effectively electrify 33% of final energy use.
Electricity demand
Electricity currently accounts for 23% of final energy consumption, while overall energy demand keeps growing, driven in part by AI and data centres. As the WBA notes, if additional electricity demand is met through coal and gas generation, or electrification simply accommodates growing consumption without replacing fossil fuel use, emissions will continue to rise.
‘The success of 35×35 should therefore be judged not only by how much of the world’s energy comes from electricity, but by whether it speeds up the phase-out of fossil fuels across the real economy,’ it said.
‘Strong economic case’
The report highlights a ‘strong economic case’ for taking action on electrification, noting that the Hormuz crisis has led to a $330 billion increase in fossil fuel import bills, with diesel prices rising by 59%. According to the IEA, achieving the 35% target could reduce fossil fuel import bills by more than $500 billion at current prices.
‘The countries and companies that electrify early also stand to gain a lasting competitive edge,’ the report states. ‘Decisions taken now on energy will shape where factories are built, who makes the technologies the economy runs on, and who remains exposed to the next fuel price shock.’
The report draws on the WBA’s data on more than 600 organisations across the automotive, buildings, mining, ICT, digital, electric utilities and clean technology manufacturing sectors, which are collectively most reliant on the transition to electrification.
As an example, the 200 leading digital companies already consume close to 500 terawatt-hours of electricity annually, equivalent to around 1.7% of global consumption.
‘Electrification is becoming a global political priority, but corporate transition plans, investment decisions and enabling infrastructure are not yet aligned with the pace of change required,’ the report states. ‘The target is very much achievable, but without additional investment by companies, stronger investor focus and more enabling policies, it is unlikely to be met.’ Read more here.
