


The electrification of everything is the biggest shake-up the global energy system has seen in decades. Unfortunately, the route to the future is hung up by the culture wars of the energy transition and the fight against climate change.
That’s putting pressure on the advocates of electric vehicles, heat pumps and wind turbines to address the risks their vision carries. Confronting them is increasingly important as power consumption booms. Since 2010, global electricity demand has grown almost twice as fast as total energy use.
The trend is likely to continue, in part because of electron-hungry new technologies, such as data centers and artificial intelligence, and in part simply because the world is getting richer.
At the same time, the way the world meets electricity demand is changing beyond recognition: Weather-dependent generation sources such as solar panels and wind turbines are becoming the largest source of incremental supply in contrast to the dependable sources the world has relied on for the past century — atomic reactors, coal-fired power plants and large hydropower projects.
Energy officials have yet to map properly the risk implications of electrifying everything. Fortunately, governments are starting to wake up to them.
The International Energy Agency, which was born out of the 1973 oil shock, is proposing to elevate “electricity security to a strategic policy priority.” A confidential background paper issued before a meeting with the U.K. government last month told delegates that “electricity security is more important than ever.” Hardly anyone in Britain would disagree: Only a few weeks ago, Heathrow Airport shut down after a transformer at an old substation caught on fire.
Unfortunately, green activists, who hardly see any problem with electrifying everything, believe any concerns represent little more than attempts to delay a needed transition away from fossil fuels.
Climate deniers see only trouble in renewables, forgetting all the risks of oil, gas and coal. In between both positions lies the reality.
The first risk of electrifying everything is meeting the huge extra demand for electrons. From 2025 to 2027, global electricity consumption is expected to rise every year by the equivalent of what Japan consumes today. If renewables can’t match that increase, alternative sources will be needed. Sadly, China is still relying on coal-fired stations to meet the growth in electricity demand, a huge risk for the environment.
Often forgotten as the growth in renewable generation attracts headlines, coal is still the world’s favorite source of electricity. Add natural gas, and the two account for about 50% of the world’s electricity supply.
The second risk is matching a demand that requires 24/7 supply with a generation system that, at the margin, depends today on whether the sun is shining and the wind is blowing. “Systemic challenges will emerge from balancing increasingly renewable-dominated grids during extended low-generation periods,” the IEA said in its confidential paper, which was seen by Bloomberg Opinion.
There’s an additional headache. Under pressure to meet green targets, utilities are shutting down so-called dispatchable power plants that can be turned on and off on demand. Germany, which shut all its nuclear power stations, is a textbook example. “Current vulnerabilities stem from premature retirement of dispatchable generation without adequate replacements,” the IEA warned.
The third risk is the spiderweb-like grid that connects hundreds of power plants, substations and consumers. Bottlenecks mean that renewable plants often have to wait months, if not years, to start producing. The world needs many more transformers and low-tension distribution lines.
Javier Blas is a Bloomberg Opinion columnist covering energy and commodities.