Nick Van Hee graduated with great distinction in June 2023, earning a Master’s degree in Business Engineering from the University of Antwerp. He further specialized in sustainability by completing a second Master’s degree in Environmental Science in June 2024, also from the University of Antwerp. Throughout his academic journey, Nick gained practical experience through internships, as a Climate Risk Intern at Gimv, a private equity firm, and as a Sustainability Consultant Intern at Deloitte. In addition to his hands-on experience, Nick has contributed to academic research. He wrote an article on the economic potential of Small Modular Reactors, which was published in the Renewable and Sustainable Energy Reviews journal. In September 2024, Nick joined Econopolis Strategy as a Climate Analyst, where he focuses on strategic advisory projects related to climate and the energy transition.
Global Electrification Surge: How Electrification Will Shape Future Energy Demand
In today’s energy landscape, it's crucial to differentiate between energy and electricity, as their roles in final energy demand vary significantly. Energy encompasses all forms of fuel and power used across sectors, such as gasoline for cars or natural gas for heating. Electricity, a subset of energy, powers technologies like lighting, heat pumps, and electric vehicles (EVs). For instance, in Belgium, electricity accounts for only about 18% of the total energy demand, while the majority of energy consumption is still fossil fuels like gas and oil.
Electrification, at its core, refers to the process of replacing technologies that traditionally rely on fossil fuels (such as internal combustion engines or gas boilers) with those powered by electricity, like EVs or heat pumps. These technologies are often far more efficient, meaning they require less energy to perform the same task, contributing to a reduction in total energy demand. Moreover, as the generation of electricity becomes increasingly decarbonized, electrification plays a pivotal role in reducing emissions.
Electrification's Global Impact by 2050
The transition toward electrification is measured by the share of electricity in the final energy demand mix, and its expected growth is undeniable according to the new Energy Transition Outlook 2024 report[1]. Figure 1 shows the expected energy demand by 2050 vs. the current demand (2023) for different regions and what proportion of this demand is represented by electricity. The figure demonstrates that electrification is forecast to roughly double by 2050 across all regions, except for North East Eurasia (Russia, Mongolia, North Korea and former Soviet Union states like Ukraine). At the same time, final energy demand is expected to decline by 2050 compared to 2023, for high-income regions, including Europe, North America, and OECD Pacific, primarily due to energy efficiency gains through electrification. The shift towards electric technologies in these regions, alongside grid decarbonization, is expected to result in a negligible share of electricity generated from fossil fuels like coal or gas. Greater China (China, Hong Kong, Macau and Taiwan), will take the lead with a 50% electrification rate by 2050, followed by the high-income regions OECD Pacific (44%), Europe (43%) and North America (42%).
Figure 1: Electrification (from non-fossil and fossil sources) and other final energy demand projections for 2050 where each circle represents 250 TWh. Data from the Energy Transition Outlook 2024.
In contrast, Figure 1 demonstrates that low-income regions like Sub-Saharan Africa and the Indian Subcontinent (India, Afghanistan, Bangladesh, Sri Lanka, Nepal, Bhutan and the Maldives) face an entirely different trajectory. These regions are forecast to nearly double their total final energy demand from 2023 to 2050, driven by rising populations, improved energy access, and economic growth. In addition to such a sharp rise in demand, electrification is also set to grow substantially. Sub-Saharan Africa, for example, will see the share of non-fossil electricity in its final energy demand rise from less than 3% today to over 13% by mid-century. Similarly, in the Indian Subcontinent, the proportion of non-fossil electricity will jump from 4% to 28%.
As the world moves toward greater electrification, the efficiency gains from electric technologies offer a promising path to reducing overall energy demand. By 2050, electrification’s impact on both energy demand and emissions will be profound, transforming not only how we generate power but also how we use it. For organizations navigating this dynamic shift, our team of consultants is here to guide you through the challenges and opportunities of the electrification transition. We invite you to connect with us to explore strategies tailored to your needs.
[1] https://www.dnv.com/energy-transition-outlook/download/