ELECTRIFICATION OF ECONOMIES

Source: https://www.iea.org/sankey/#?c=World&s=Final%20consumption

Electricity’s ubiquity and its many irreplaceable uses (just think ofpossible pre-electricity alternatives to computers: complex assemblies of metal
gears run by steam?) makes it appear more important than it is when its
contribution is measured as the share of final energy consumption. Calculations
are easy: download the latest version of BP’s Statistical Review of World Energy,
find data on electricity generation and on primary energy consumption, divide
the two and you will see that in 2021 electricity made just 17.2% of the world’senergy supply, with the shares of 17% for the US, 16.6% for Germany and 19.5%
for China. Surprising but unassailable: electricity provides less than a fifth of all
final energy uses, that is of all fuels (clean and sorted coal, refined liquids,1

processed gases) and all modes of electricity generation (thermal, hydro, wind,solar, geothermal).
And the shares are even lower when using net electricity consumption(rather than gross generation) and final energy use (rather than total supply). Icalculated such ratios with pre-1950 data from Sam Schurr’s and Bruce
Netschert’s 1960 volume on Energy in the American Economy 1850-1975 andwith all subsequent figures published by the US Energy Information Agency.
Obviously, until the beginning of commercial electricity generation in 1882 thatshare was zero and for decades it remained very low: it reached one percent
only in 1920, it was still just 3% by 1950, got to 10% by 1980 and by 2020 it
was about 15.5%. For comparison, Lawrence Livermore National Laboratory
diagrams of US energy flows indicate electrification share of 17.9% in 2020 and17.6% in 2021, and slightly higher shares are implied by the International
Energy Agency’s World Energy Balances (mostly between 20-25% in affluentcountries). All one has to do to avoid arguments is to state clearly how thecalculations were done, and compare numbers of identical provenance.
But these small differences do not change the fundamental conclusion:
electricity supplies much smaller shares of final energy consumption than mostpeople would think, direct combustion of fossil fuels still dominates. Even theIEA’s global share is below 20% numbers, and the highest shares are in smaller
economies that derive the largest proportions of their primary energy fromhydroelectricity (Norway, Sweden) or, in Iceland’s unique case, from exploiting
geothermal flows. That China has a higher share than the US does not mean2that country is more electrified. Its per capita electricity consumption is still lessthan half of the US average, but America’s share of electricity is lowered by theextraordinarily large demand for liquid fuels in transportation and for natural
gas for industries and heating (this is even more true for Canada, the world’s
second largest hydroelectricity producer). In contrast, China’s share is boosted
by the country’s enormous hydrogeneration (by far the world’s largest) and by
its large electricity consumption in export-oriented manufacturing (as is thecase in South Korea).
No less important is the fact that the electricity’s share of the final energy
uses has been rising only slowly, in the US by less than one percent a year since
the year 2000, and that its trajectory shows clear signs of saturation. Globally,
the share has been growing by only about 1.5% a year, and in many countries,
including Brazil and Canada, it has stagnated. Going all the way is bound to
take time. Even for affluent nations, there is a long road from, at best, 20-25%
to 100% -- and far greater challenges are ahead for the world’s poorest
countries where electricity now supplies just around 10% of their final energy
consumption. Given the past pace of this fundamental energy transition, andthe fact that its future progress will be tempered by its enormous scale and that
it will require extensive, expensive and commonly resented infrastructural
expansion, fully electric world remains a distant aspiration. Proponents of rapid
decarbonization of global energy supply now talk about electrifying everything
in a matter of a few decades: they should reconsider.

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(Disclaimer: The views and impressions in the columns are personal opinions ofProf. Smil and do not represent the opinions of ICEF.)

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