Electricity accounted for 23 per cent of global final energy in 2025. On 22 September 2026 the International Energy Agency published Electrification, a special report of 198 pages prepared at the request of Türkiye, as COP31 presidency, and of Australia, as presidency of the negotiations. The document reached governments during the week of the UN General Assembly, while a presidency proposal to raise that share to 35 per cent by 2035 was under discussion. The timing was not only diplomatic. Since late February 2026, conflict in the Middle East has disrupted shipping through the Strait of Hormuz, a route that in recent years carried about 20 million barrels of oil a day and a large share of seaborne liquefied natural gas. The Agency calls this the second major fuel-supply shock of the decade. About 25 countries have announced structural electrification measures since February 2026.
The report keeps three claims apart, and a portal reader should keep them apart too. The first is a description of the present. Electricity demand grew by more than 3 per cent a year between 2015 and 2025, nearly twice the pace of total energy demand. Electric cars were about 25 per cent of new sales in 2025, up from less than 1 per cent in 2015. Buildings are already close to 40 per cent electrified, mostly because cooling, appliances and information technology have no fuel substitute. Electricity already powers activities that generate close to half of global GDP. The second claim is an engineering test of what is cost-competitive for the consumer at 2025 technology costs, energy prices and financing conditions. That test puts a global electrification rate of 33 per cent within reach if the potential is taken up: about half of residential fuel use, about half of oil-based road transport, and about 40 per cent of fossil-fired industrial heat at low and medium temperature. The third claim is a scenario. The High Electrification Scenario reaches 35 per cent in 2035 and is aligned with the Agency’s net-zero pathway. It is a constructed path, not a forecast of what governments will do. The 35 per cent figure is a presidency proposal still under discussion, not a settled global commitment. National landing points differ with industrial structure, prices and policy.
According to Dr Jose Luis Chavez Calva, final energy understates what electricity already does. An electric car converts about 85 to 90 per cent of the electricity it takes into motion. An internal combustion engine converts about 25 to 35 per cent of the energy in petrol. Heat pumps deliver several units of heat for each unit of electricity. On the Agency’s own illustrations, spending 100 dollars on electricity moves a car about three times as far as spending 100 dollars on petrol, and the same sum in a heat pump covers more days of heating than a gas boiler. A kilowatt-hour can cost more than the equivalent unit of gas or petrol and still leave the household spending less, because the electric appliance does more work per unit bought. Electricity is 23 per cent of final energy and closer to 40 per cent of useful energy services.
The near-term potential is uneven by sector. Transport is about 2 per cent electrified today. In the high scenario that share rises to 13 per cent by 2035. Vehicles already on the road avoid about 2.3 million barrels of oil a day. Motorcycles and two- and three-wheelers in developing Asia are a large part of the volume, with more than 10 million sold a year. Sales shares move first. The oil barrel moves later, because cars sold this year stay in the fleet for a decade or more. Buildings are the most electrified large sector. The remaining prize is space and water heating, and clean cooking where households still burn biomass or liquefied petroleum gas. In industry, the short-term opening is low- and medium-temperature heat and mechanical power in textiles, food processing, pulp and paper, and some chemicals. Blast furnaces and other high-temperature processes sit outside that band.
In the high scenario, electricity demand rises by almost 1,400 terawatt-hours a year to 2035, close to double the 2015–2025 pace, and peak demand is 1,900 gigawatts higher, about 40 per cent of today’s global peak. Transport, industrial heat, and heating and cooking in buildings add about 9,200 terawatt-hours by 2035. The report runs that same demand path through three generation mixes. Emissions depend on which mix sits underneath. The same end-use path, run on the current-policies mix, leaves power-sector emissions close to 14 gigatonnes of CO₂. The displacement of fuels at the point of use and the supply mix are separate questions.
The security arithmetic is large, and it is conditional on the scenario. By 2035, importing countries cut oil imports by about 15 million barrels a day, gas imports by about 120 billion cubic metres, and coal imports by about 100 million tonnes of coal equivalent. Their energy import bills fall by about a quarter against 2025, around USD 400 billion a year at 2025 prices, and by more than USD 500 billion if the higher prices seen after the Hormuz disruption are used. Avoided global oil demand, mostly from electric vehicles, is put at about 18 million barrels a day, four-fifths of it in importing regions. Those two oil figures measure different things. Eighteen million barrels is demand that does not appear. Fifteen million barrels is the import cut for net importers. They should not be added into one number.
Importers see the larger cost-competitive gains, because their consumers already pay higher fuel prices. Europe can add on the order of 15 percentage points if the potential is taken up. India sits in a similar range. Fuel exporters sit closer to 5 points. About 730 million people still have no electricity, and consumption per person in sub-Saharan Africa is about 200 kilowatt-hours a year against about 7,000 in advanced economies and in China. A world average of 35 per cent reached only in countries that are already wired would describe a split system.
The constraint the report flags most clearly is the grid. Global networks cover more than 85 million kilometres today, about 80 million of them distribution. In the high scenario they reach about 115 million kilometres by 2035, which means annual expansion about 40 per cent faster than in the past decade. Extra-high-voltage lines typically take 5 to 13 years. Utility solar and onshore wind take 1 to 5 years. Electric-vehicle charging hubs take less than two. Hyperscale data-centre campuses move from announcement to operation in two or three years. Electricity 2026, the companion publication, records more than 2,500 gigawatts of generation, storage and large loads in connection queues worldwide, including at least 150 gigawatts of data-centre projects at an advanced stage. The special report’s own line is that electricity grids risk becoming a central constraint on how far and how fast electrification can proceed.
Household energy bills fall by about 15 per cent by 2035 in the high scenario because operating costs decline. The barrier is the one-off cost of a car, a heat pump or a panel upgrade, and the fact that a cost-competitive appliance is not the same thing as a financed one, or as a feeder and a transformer that are ready. Most G20 energy strategies plan generation. According to Jose Luis Chavez Calva opinion, fewer plan end-use electrification as a system that has to sequence mandates, tariffs, connection rules and network build.
Source: https://joseluischavezcalva.substack.com/p/from-23-to-35-percent-cost-competitive
