In 2022, 82% of global energy demand was still met by fossil fuels. But we know that the future is going to be increasingly electric. From transport to heating, new solutions and technologies are transforming the way we demand our energy.

The Energy Institute Statistical Review of World Energy tells us that over the past decade, electricity generation has increased by an average of 2.5% each year, double the rate at which total energy consumption grew. Growth in renewables is fuelling this, with 84% of net electricity growth in 2022 coming from renewable energy. Average annual growth in renewable capacity over the past decade has been 14% year-on-year, driven by wind and solar developments. And if we continue at these deployment rates, for each type of renewable, solar and wind in particular, we’ll be in sight of the tripling envisaged in the COP UAE Consensus.

Put simply, if we are going to get to net zero quicker, we need to go through the wires, not through the pipes.

A huge positive of a power-led transition is efficiency, so if the world electrifies we can see natural efficiencies coming through. If you consider the petrol car, around 80% of the energy in the petrol car is wasted in comparison to the output. An electric vehicle loses about 20% of its input energy as it delivers. Gas boilers are around 90% efficient, but when you look at a heat pump – which is a heat concentrator – you can get up to 400% efficiency. In fact I’ve just installed a new one in a building that I just developed and it is indeed generating at 400%, which is just amazing.

Therefore, how we measure and quantify useful energy needs to evolve too, something we’re considering for the future of the Statistical Review of World Energy.

Put simply, if we are going to get to net zero quicker, we need to go through the wires, not through the pipes. 

Cost profiles are also changing in clean power technologies. Key renewable technologies are coming down the cost curve, making them a realistic alternative to fossil fuels: just look at the pure financials. Renewable costs have tumbled since 2010, onshore wind coming down 40%, solar photovoltaics (PV) coming down nearly 85%, and battery technologies beginning to follow this trend.

The other interesting thing about renewables is that potentially they are long-term-contracting, which means that we could begin to see more stability in consumer energy bills. One of the things that we’ve seen over last couple of years is obviously huge hikes in energy prices, and that not only disrupts the industry, it also really disrupts all the economies, because where you have consumers spending all their money just paying fuel bills; nothing else is happening. The price we pay for renewable generation – and nuclear – is potentially going to be more stable, determined by long-term contracts and not being purchased on volatile international markets. And there is also the potential for regional economic gains of retaining the benefits of energy generation within local economies and creating local security of supply and green jobs.

But there are challenges in getting from where we are now to realising the benefits.

Projects face huge challenges, whether it’s regulatory, planning, grid connection and other barriers during the feasibility and development stages. Offshore wind can take up to 10 years to develop; onshore wind five years and solar three.

There is also the variability of these technologies, so the output is not stable. It’s based on a weather system rather than just a stored system. We need to be thinking about new smart demand-side techniques where we can balance this variable output and use new storage technologies, greater interconnection between markets and more demand intervention. This is an untapped resource today.

Market electricity prices are also driven by the marginal cost of gas today and that, going forwards, is not going to be that helpful in trying to make sure we continue to develop some of these long-term, long-priced power technologies. Market reforms are going to be inevitable to ensure consumers benefit from these growing technologies. And there are other, smaller pieces of legislation needed. For instance, in the UK green levies tend to fall disproportionately on electricity, not the fossil market, creating a perverse incentive.

But these are all challenges we can and will overcome. I am certain the future is bright and powered by electricity.