What is electrification and why does it matter?

The global energy sector is in the midst of a transformative era. In this transformation, one component plays a critical role in it to succeed: electrification.

14th February, 2024


Encompassing a new view on how we power our homes, vehicles and entire industries, electrification represents more than a strategy to combat climate change – it is rather a necessity. But what exactly does this process entail? How far have we come in terms of electrification, and what challenges remain on the path towards a more sustainable energy future?

Defining electrification

The journey towards sustainability affects all layers of society. From individuals to businesses, homes to cities as well as industries to institutions, everyone is impacted. A mission driven by two monumental challenges, the reality of climate change and the need for a solution. At the heart of this shift is electricity, and when leveraging it to replace other forms of energy, we have electrification.

Meaning – electrification should not be confused with having access to electricity, any certain electrical products or even as a commodity. It is instead the process of exchanging technologies that use fossil fuels with electrically powered alternatives, such as electric vehicles and heat pumps. A shift that is not only beneficial from a sustainability point of view, but also drives innovation, digitalization, and efficiency.

Electrification as of today – how far have we come?

As of now, 19% of the global energy consumption is comprised of electricity.[1] A number that has the potential to grow enormously, and for us to reduce our carbon emissions, urgently need to do so. A study that underlines this demand, states that if 60% of the EU economy would succeed with electrification, that would result in a greenhouse gas emission reduction of 95%, compared to its levels in the 1990s.[2] A significant potential, that has triggered a growth of renewable electricity capacity additions with 50% in the last year, as well as increased policy support from more than 130 countries stimulating this trend in the right direction.[3]

However, more efforts are needed to realistically keep track of reaching the NZE scenario in 2050. Today’s increase levels will even have to double to reach the next milestone in 2030, of having 27% of final energy consumption coming from electricity. A goal where both commercial and industrial energy end uses are playing pivotal roles, such as reserve power for the global telecom industry, and energy storage for both single households as well as commercial and industrial properties.[4] With electrification being the most direct, effective, and efficient way to reach the decarbonization targets, the urgency to ramp up its pace have never been greater.[5]

Challenges and developments

This transformative era of the energy sector is dependent on several factors, each faced by certain challenges. One significant being policy uncertainties and the need for quicker political responses. With our current volatile macroeconomic environment with an ongoing energy crisis, many suppliers and stakeholders saw a need to protect consumer prices, and consequently took a toll on more sustainable, long-term investments in the electricity sector. Another is time-consuming permits, reducing the incentives, and increasing costs for many renewable energy projects. The third one, being insufficient investments in grid infrastructure, which otherwise could have enabled a much faster expansion in electrification.[6]

Together, these challenges indicate the complex structure behind the global landscape of electrification. All of them are driven by positive progress in certain areas and highlighting greater barriers in others. Some of the sectors that are showing promising development, is solar power and battery manufacturing, leading to the next task – how to make the most if its power.[7]

The last piece of the electrification puzzle

Understanding the fundamental role that electrification has in the journey towards carbon neutrality, as well as the challenges involved reaching it, there is one linchpin left to reach this new energy ecosystem: ensuring that our renewable energy sources are resilient and efficient, despite many of them being intermittent in their nature. Steering when the sun shines or how much the wind blows is out of anyone’s control, but harnessing them at their peak is not. A task that Polarium has committed to since our get-go, with energy storage and optimization being our core offer and contribution.

We are bridging the gap between the highs and lows of energy demand, making the naturally inconsistent flow of production streamlined and reliable. Not only are our storage and optimization solutions tools for financial ease, but equally an encouragement to conserve, preserve and care for the resources at hand.

With the commitment to reach the NZE scenario, we must not only electrify our industries, cities, and even whole societies. We need to make it last, optimized and stored for whatever the future holds.

[1] International Energy Agency, IEA, July 2023.

[2] Euroelectric,” Decarbonization Pathways” 2018.

[3] Internationel Energy Agency, IEA, “Renewables 2023, analysis and forecast to 2028”

[4] International Energy Agency, IEA, July 2023.

[5] Euroelectric,” Decarbonization Pathways” 2018.

[6] International Energy Agency, IEA,” Tracking Clean Energy Progress”, January 2024.

[7] International Energy Agency, IEA,” Tracking Clean Energy Progress”, January 2024.

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