by jillesvangurp | 2026-01-30 14:32:59+00:00
People make all sorts of assumptions about increased grid pressure that come with electrifying the economy. It's true that we'll consume more energy overall but not that we'll have to get all of that with new generation.

A few broken assumptions here that are common:

- The existing system is 100% efficient. It's not. We have a lot of non utilized generation that is effectively discarded. Windmills that are not milling aren't generally broken but turned off because there is over production. In the same way, a lot of solar energy is not consumed and lost. We have electricity cables that are not running at full capacity. And so on.

- Existing fossil energy needs to be replaced with the same amount of electrical energy. Michael Liebreich refers to this as the primary energy fallacy (as opposed to final energy). The mistake here is that a lot of fossil fuel energy is effectively used to heat the universe rather than do anything useful. About a third or less is useful (final energy). The two thirds that are lost don't need replacing. An EV is much more efficient with its energy than an ICE car. That's why you can get the same mileage with only about 2-3 gallons of petrol worth of battery capacity. Reason: petrol engines produce mostly heat and a little bit of movement. So, the 20 gallons that go in a car mostly don't move the car. In the same way, a heat pump is way more efficient than burning gas is.

- The added load is constant and people have no control over when to consume energy. This too is nonsense. We are conditioned to think like that. But we have batteries and a lot of other technology now that can be charged when energy is cheap and discharged when it is not. Also, we can use pricing to stimulate people to optimize when they buy power and charge their batteries. A lot of new energy load is flexible. Cars can charge at night or during the middle of the day. Data centers can play with pricing to stimulate people to shift loads when energy gets more expensive. We're producing batteries by the multiple twh per year. There will be tens / hundreds of twh available to charge/discharge at moments of our choosing. That's why gas plants are being marginalized by grid batteries.

For EVs it's actually very simple. They need energy. The total amount of energy needed is a function of the amount of distance driven. About 3-4 miles per kwh is common. For Norway, trucks and cars drive a combined ~30 billion miles per year. So, if all that becomes electric and you assume a conservative 2 miles per kwh, it needs about 15 billion kwh or 15twh per year. Maybe a bit more. Let's call it 20twh. Norway's grid generates 157 twh/year. So, we're talking about ~10-15% of total energy generation. With pricing, batteries, etc. they can probably nudge that around peak energy demand in e.g. evenings and mornings to make the existing system more efficient. Also, this does not happen overnight. New cars are electric. But they still have a lot of older vehicles. It will be quite a few years before all traffic is electric. So, this isn't a shock to the system but more of a very gradual, predictable shift with a lot of potential for efficiency improvements along the way.

It's the same everywhere else. This is what a great investment opportunity looks like. Norway got clued in earlier than most countries; indeed helped by the massive amounts of clean energy they have.

Others should be able to benefit as well. IMHO, the economics are clear enough at this point that oil companies should start calculating their year on year demand declines for petrol/diesel. It's no longer a growth business. China did in fact import about 10% less diesel year on year last year. Like the shift to EVs this is a gradual decline. Not a system crash. Not yet. I do expect this to accelerate massively as the economics improve.