Electricity could cost-effectively supply 33% of the world's final energy consumption by 2035, up from 23% today, according to a new special report released by the International Energy Agency. The analysis was prepared at the request of Türkiye and Australia to inform discussions around a proposed global electrification target of 35% ahead of COP31. The report examines how rapidly countries can expand electrification across their economies, and what that shift would mean for energy security, climate goals, and economic competitiveness.
The findings are based on technologies already available and energy prices at levels seen before the current Strait of Hormuz supply crisis began. Under a scenario where fuel-importing nations significantly accelerate electrification efforts, their combined energy import bills could drop by more than $400 billion by 2035 compared with 2025 levels. By that same year, faster electrification could cut global oil use by 18 million fewer barrels per day than would otherwise occur, driven largely by rapid adoption of electric vehicles. In this accelerated scenario, carbon dioxide emissions from transport, buildings, and industry—sectors that together account for more than half of all energy-related CO2—would fall 40% by 2035, a rate of decline aligned with international climate targets. This emissions drop would be large enough to put total energy-related CO2 on a downward path regardless of how electricity itself is generated, though a rapid build-out of low-emissions domestic power would amplify both security and climate benefits.
The report states that the proposed 35% electrification goal is now within "striking distance" given current cost-effective technologies, and that energy prices at their present elevated levels—amid the Hormuz crisis—would make even more of the world's energy consumption economical to electrify. The authors note that electricity use has grown faster than economic output in recent years and nearly twice as fast as overall energy demand, propelled by rapid expansion of air conditioning, data centres, advanced manufacturing, and electric cars. According to the IEA, substantial potential exists in all regions to increase electrification rates cost-effectively above today's levels, though opportunities and priorities differ by country—in many emerging and developing economies, for example, this includes electrifying agricultural water pumps, expanding electric two- and three-wheelers in densely populated cities, and enabling small businesses in food and textiles to use more electricity.
The report explains that electricity's expanding role opens new pathways for nations to strengthen energy security and competitiveness while cutting emissions, especially as the world faces its second major energy shock in five years. As economies enter what the IEA calls the "Age of Electricity," this transition can deliver major benefits—but only if electricity systems remain secure and affordable as use scales up. The analysis highlights that electrification supports international commitments to double the rate of energy efficiency gains and triple renewables capacity. In emerging markets, the shift offers particular promise in sectors like agriculture and urban transport, where electric alternatives are already competitive but adoption has lagged.
Realising this potential will require broader action to match what's economically competitive, the report warns. Investment in generation and grids must scale up, and power systems need to become smarter and more flexible to avoid bottlenecks. Evolving threats to electricity security—concentrated supply chains for critical minerals and key technologies, cybersecurity risks, and natural disasters linked to climate change—will need to be tackled head-on. Policymakers will also need to help households and businesses manage the upfront costs of switching to electric alternatives to ensure the benefits are widely shared. The bottom line: electrification is both affordable and within reach, but getting there demands deliberate policy choices and infrastructure investment now.