Context & Overview

Key Strategic Pillars:

• Electrification as the Transformative Engine:

• Electricity must become the dominant energy carrier. The share of electricity in Total Final Energy Consumption (TFEC) must rise from 23% today to 35% by 2035, and exceed 50% by 2050. This demand surge is heavily driven by the building sector (reaching 75% electrification by 2050 via heat pumps and appliances), the transport sector (over 45% via electric vehicles), and industry (over 40% through direct electrification and green hydrogen).

• The Grid & Storage Investment Imperative:

• Accommodating this rapid load growth requires unprecedented infrastructure scaling. Average annual global investment in power grids must double, rising from USD 0.5 trillion in 2025 to USD 1 trillion (2026-2035) and USD 1.2 trillion (2036-2050), reaching a cumulative USD 29 trillion by 2050. Concurrently, global energy storage capacity must expand massively from 416 GW (2025) to 6,859 GW (2050) to manage system daily flexibility needs, which will skyrocket from 7% to 30% of overall electricity demand.

• Tailored Regional Strategies:

• Electrification pathways will inherently differ across regions due to economic structures, resource availability, and grid constraints. Enhanced cross-border grid interconnections will act as crucial enablers for integrating resources and optimizing system efficiency.

• The Complementary Role of Sustainable Fuels:

• While electricity will dominate, sustainable fuels (such as clean hydrogen and biofuels) remain indispensable for decarbonizing hard-to-electrify sectors, including heavy industry, aviation, and shipping.

• Coordinated Policy & Governance:

• An orderly and equitable transition requires phasing out fossil fuel subsidies, executing market design reforms to better integrate variable renewable energy (VRE) and incentivize flexibility, and undertaking extensive workforce development initiatives.