Many of these trends are already distinctly visible. Global sales of electric passenger cars and plug-in hybrids are expected to grow by 35% (to 13.8 million units) in 2023, and their share of new passenger car sales will rise from 14% to 18%, according to the International Energy Agency (IEA). Global demand for electricity by electric cars and plug-in hybrids more than doubled last year, reaching 97 TWh, which is comparable to the annual electricity consumption in Kazakhstan (112 TWh in 2023). One of the drivers of the demand growth is the development of charging infrastructure. The global number of publicly available charging stations increased by more than 40% – to 3.9 million units in 2023, of which 1.4 million were fast charging stations and 2.5 million – slow charging ones.
The impact of electric vehicles on the energy demand growth is evident in the U.S., where electricity consumption by electric passenger cars at the end of 2023 surpassed the one for rail transport for the first time (7.6 TWh vs. 6.8 TWh). Exactly 40% of electricity demand for the ground-based light-duty electric vehicles in 2023 was accounted for by the West Coast states (California, Oregon, Washington), and another quarter by the “mid” (New Jersey, New York, Pennsylvania) and South Atlantic states (Delaware, Florida, Georgia, Maryland, North and South Carolina, Virginia, West Virginia). Electric vehicles accounted for 0.18% of the U.S. electricity consumption in 2023, and is going to grow rapidly in the coming years.
Electrification is also affecting other economic sectors, including the service sector. According to the Energy Information Administration (EIA), electricity share of primary energy consumption by commercial real estate in the U.S. increased from 38% to 61% between 1979 and 2018, while fuel oil share decreased from 14% to 1% and natural gas’ share from 44% to 34% (thermal energy share remained 4%). This shift is mainly due to transition to electric heating of office buildings, the development of air conditioning systems and digitalization of workplaces.
A significant electrification potential remains in industries, including in developing countries. According to Ember, among Indian industries, a high share of electricity in the energy consumption structure is characteristic only for the aluminum industry (80.1% in 2022), while the production of cement (10%), petrochemicals (10%) and steel (8.5%) is characterized by significantly lower levels of electrification. This level in the steel sector can be increased, in particular, by switching from oxygen-converter furnaces which require coking coal, to arc steel-making plants utilizing the thermal effect of electric arc.
However, transportation will still be the driving force behind the global economy electrification in the coming decades. The average annual growth in demand for electricity in this sector up to 2050 will be 9%, while in the industrial and residential sectors – 1% and 2% respectively, and in all the other sectors – 6%, according to the forecast of “Jacob & Partners”.
