Electrification

Electrification describes the process of replacing fossil-fuel-powered devices with electrically-powered equivalents. Entire sectors, primarily mobility and heating, are undergoing electrification, meaning electricity demand is significantly increasing. In a household environment this could mean replacing a gas boiler, typically powered by combustion, with a more energy efficient and emission-friendly heat pump, which is powered by electricity. However, to ensure electrification has a positive impact, it must be accompanied by an increase in the share of renewable electricity generation. Matching intermittent, often decentralized, renewable energy sources with rising electricity demand is an increasing challenge that calls for smart energy management solutions.

History of electrification

Traditionally, electrification referred to the increasing use of electricity to power households and industry. Although the first basic electric motor was created in the early 19th century, it wasn’t until the latter part of the century that electrification took off thanks to the dynamo (1866), which made large-scale electricity generation commercially feasible. Electrical transmission was then developed in the 1880s. Electrification was one of the key drivers of the second industrial revolution (1870-1914), allowing major developments in manufacturing, railway transport, street lighting and other industries. Electricity only started powering homes from around the 1920s onwards. Over the next decades, houses and industry became more and more electrified, however, industrialization also caused fossil fuel emissions to rise. Now, advanced technologies are making it possible to redefine electrification and our use of electricity. This means that electrification is now referred to as replacing fossil fuels with electrified technologies, which are powered by renewable energy sources.

Sectors undergoing electrification

Many sectors are electrifying in order to decarbonize. Here are the major fields being electrified:

Transportation

Electrification of the transport sector holds great potential, as ground transportation was responsible for 18% of global carbon emissions in 2022. Replacing internal combustion engine (ICE) vehicles with electric vehicles (EVs) has the power to drastically reduce these emissions. As well as personal vehicles, companies are also electrifying their fleets so that, amongst others, logistics, car rental services and company cars use electric powertrains. In addition, electric buses and trucks are gaining traction. In fact, by 2035, 70% of trucks in Europe, North America and Greater China are expected to be zero emission vehicles. To aid this shift, manufacturers are gradually advancing battery efficiency to extend range, while smart charging solutions make EVs increasingly more cost-efficient and charging experiences more seamless. 

Heating and cooling

The heating of houses or facilities accounts for almost half the energy use in buildings. And nearly two thirds of the energy used in heating is reliant on fossil fuels. But it is possible for buildings to be heated and cooled as needed without combusting gas and emitting greenhouse gasses. Heat pumps are increasingly being seen as the solution for the decarbonization of the heating sector. Installing heat pumps, which run on electricity, and connecting them to a home energy management system££, makes heating and cooling cleaner, more intelligent and efficient. In the IEA’s ‘Net Zero Emissions’ scenario, improving the efficiency of buildings, shifting from fossil fuels to renewables and electrifying heating would cut the emissions in the building sector by half by the end of the decade.

Aviation

The aviation industry has one of the fastest growing carbon footprints. In 2022, the emissions in this sector reached almost 800 Mt of CO₂. To decarbonize aviation innovative technologies are needed. Recent improvements and tests have showcased potential for aircrafts that are powered by electric propulsion, hydrogen or through hybrid means but the technology is not yet mature and requires further development But governments are increasing fiscal support to ensure that this sector can also be electrified.

Different levels of electrification

Home electrification

Beyond vehicles and heating, other appliances in the home can also be electrified, such as stove tops and ovens. They are not only environmentally beneficial but also performance wise. Induction cooktops achieve up to twice the yield of traditional gas stoves, as well as providing more even cooking, more precise temperature control and greater safety

Moreover, electrification enables centralized control of integrated appliances, smart thermostats, and LED bulbs, transforming homes into smart homes that are more efficient, safe, and comfortable. In a smart home, a centralized system manages energy consumption optimally by - for example - operating the washing machine when the cost of electricity is lower and by or autonomously adjusting lighting and room temperature based on residents’ habits.

Industrial electrification

The industrial sector is still heavily dependent on fossil energy. The need to fuel heavy machinery and large chemical reaction means that the industry sector is responsible for 23% of greenhouse gas emissions. But this sector can also benefit from electrification. By installing heat pumps to heat or cool facilities and switching to electrified technologies, a significant portion of emissions can be cut. To ensure a steady supply of electricity, the installation of photovoltaic panels on warehouse rooftops is beneficial to reduce dependence on fossil fuels.

City electrification

The infrastructure of large, urban areas can be electrified in a number of ways. With public transportation being one of the biggest emitters, electrifying the transportation system would also improve air quality, cut noise emissions and reduce greebhouse gas emissions. Buildings can also adapt to clean technologies by being equipped with solar panels and heat pumps. Smart districts or smart cities are a great example of how renewable technologies and electrified assets can be integrated and incorporated into urban areas to improve the quality of life of its residents.

Sector coupling

The electrification of heating, mobility and industry gives rise to sector coupling, the process of exchanging energy across sectors and facilitating a more efficient and interconnected use of resources. By electrifying adjacent sectors and integrating them in holistic energy management systems, everything becomes more connected, cost-efficient and intelligent. Waste and emissions are minimized and the utilization of all resources, particularly renewable electricity, is maximized.

Why is electrification important?

The global emissions from fossil fuels reached a record high of 36.6 billion tons in 2022. To reach the intended goal of net zero emissions by 2050, it is crucial to decarbonize energy, which can only be done if we phase out fossil fuels and make the switch to renewable electricity. Electrified assets, like electric vehicles and heat pumps, are only as clean as the electricity that powers them, meaning that electrification must be paired with an increase in renewable energy generation. Electrification is also a key solution to these two major challenges:

Clean Energy transition:

The main goal of the clean energy transition is to reduce greenhouse gas emissions in order to limit the increase in global temperatures. Replacing fossil fuels in the industry, transportation and building sectors with electrified technologies is the most efficient and cost saving way to decarbonize the energy industry. As mentioned earlier, this change comes together with the increase of renewable energy resources. Generating electricity with clean solutions, such as photovoltaic (PV) systems, and balancing the demand and consumption through strategies like peak shaving is not only environmentally friendly but also maximizes the self-sufficiency of consumers and allows them to become prosumers.

Energy security and independence:

Many countries were heavily reliant on oil and gas supplied by Russia. Due to geopolitical conflict, this supply has been cut, leading to a shortage in delivery, increasing costs and the 2022 energy crisis. By relying on electric alternatives instead of fossil fuels, countries become more independent with their own secure supply of clean electricity and take proactive measures against rising prices.

The challenges of electrification

A shift to low-carbon sources like renewable energy is necessary to fully benefit from electrification's decarbonisation potential. But with more electrified appliances and technologies comes a higher demand for electricity. In fact, electricity demand in the EU is expected to increase by 40% between 2020 and 2050.

It is crucial that this high demand is met with a simultaneous increase in renewable energy generation. The graph below shows the generation of renewable energy has increased and will rise further as of 2022 and will even surpass the forecast.

As of 2025 renewable energy resources will make up for over one-third of the global electricity generation. Reasons for that are that governments are starting to realize the urgency to decarbonize energy generation and shift it towards renewable and electrified sources. To successfully rely on renewable sources it is imperative to combine these with the right strategies. With renewable power generation being heavily reliant on external factors like weather, demand control is crucial for avoiding intermittent supply. Demand-side flexibility is a strategy that aims to reduce the consumption of electricity during peak demand. Electrification and decentralization require demand-side flexibility, allowing consumption and generation patterns to be adjusted in response to external signals. By aligning consumption patterns with clean energy availability, demand can be balanced out to avoid peak loads. This shifts the reliance on external factors as this strategy controls and manages the demand of connected assets or devices and ensures a steady supply of renewably-sourced energy.