The Big Problem With Electrifying Everything

•​​​​​​​As the world pushes to electrify everything, fossil fuel usage in electricity production has remained largely unchanged over the past five decades. •Despite efforts to shift towards renewable energy, projections indicate a persistent reliance on fossil fuels in global electricity generation through 2050. •The challenge of electrification without substantial decarbonization raises concern

From Oilprice.com

•As the world pushes to electrify everything, fossil fuel usage in electricity production has remained largely unchanged over the past five decades.

•Despite efforts to shift towards renewable energy, projections indicate a persistent reliance on fossil fuels in global electricity generation through 2050.

•The challenge of electrification without substantial decarbonization raises concerns about the effectiveness of COP28 goals in a fossil fuel-dominated energy industry.

The UN-sponsored COP28 climate conference has issued a number of proposals for reducing CO2 emissions, some criticized as too weak, others as too radical. But looking at energy data what struck us is the enormity of that task of reducing carbon emissions and how little has actually changed over the past fifty years with respect to fossil fuel usage (the data we're looking at begins in 1965), even though the first warnings about fossil fuel emissions date to Lyndon Johnson's administration in the 1960s. Starting in 1965, fossil fuel usage (oil, coal, and gas) accounted for about 90% of global electricity production. The remaining 10% being mostly hydro and a small amount of first-generation nuclear. By 2023 fossil fuels still produced about 80% of total electricity consumed. But over that extended period, nuclear grew and then stalled followed by more recent growth in wind and solar. The result is an incremental 10% or so displacement of global fossil fuel usage in electricity production over the past 50+ years.

The composition of global fossil fuel usage over the decades has changed somewhat. Oil usage has declined from its peaks in the late 1980s probably due to tightening fuel efficiency standards. Coal usage has also declined while gas usage has increased almost by an offsetting amount. Thinking like an energy monopolist for fossil fuels, if we had a 90% market share that only declined 10% over 50+ years, we would feel rather optimistic about our future prospects. And it gets even better. Why? Because we are on the verge of a huge growth in demand for electricity. True some of that increased electricity usage implies displacement of gas or oil. Heat pumps will displace gas usage and, obviously, electric cars and trucks don’t need much oil, except for some lubricants. But this is all at the retail level. Electrification can significantly escalate kilowatt-hour sales growth upward on a global, wholesale level.

In the US, for example, we are estimated to add 7.7 gigawatts of new gas-fired generating capacity in 2023-24 according to the US EIA. With no new coal or nuclear units on the horizon, all the remaining capacity additions this year are wind and solar, roughly 40 gigawatts of wind, solar, and batteries but mostly solar. So it’s fair to conclude that the US electric generating mix is decarbonizing even as it expands. However, most of the world does not look anything at all like the US in terms of electric power generation. China alone added significantly more new coal-fired power generation than the US shuttered. They also have about 25 new nuclear power stations under construction. Our point is that in growing economies like China, India, and the Southeast Asian nations energy planners are still choosing to build new coal-fired power generation. This is what we mean when we talk about electrification without decarbonization.

Projections through 2050 from the Energy Information Administration (EIA) tell the story.