The long march of electrification

A century of growth in electricity has brought us to the Age of Electricity

This is the second in Ember’s electrification series, tracing the century-long rise of electricity as the backbone of the global energy system. It explores the historical momentum of electrification and its accelerating role in displacing fossil fuels.

Electrification as usual

Electricity demand has doubled every couple of decades for over a century, expanding across sectors and regions in inexorable waves.

Electrification is often misconstrued as a recent phenomenon, driven chiefly by climate objectives and perceived as merely the first step on a long and uncertain path. But this framing misreads the history of electricity. Electrification began well over a century ago, in the 1880s, with the advent of electric lighting and the machine drive in industrial and household appliances. Since then, it has steadily expanded — into buildings, industry, and more recently, heating and transport.

This process has rarely been smooth. Each wave of electrification has faced technological, political and economic resistance. Yet electricity’s core advantages — efficiency, flexibility and its ability to deliver higher quality energy services — have repeatedly proven decisive.

Key takeaways

1. Electricity is a third of useful energy. Electricity has supplied all the growth in per capita final energy demand since the oil shocks of the 1970s, and in 2007 overtook oil to become the largest supplier of useful energy. Demand for fossil fuels for final energy has peaked in two thirds of countries, and reached a plateau for industry in 2014, buildings in 2018 and road transport likely around 2019.

2. Some 75% of demand is open to electrification now. Electricity dominates lighting and machinery which are only 14% of final energy consumption, but is now expanding at speed into much larger areas like transport and low temperature heat which use almost 50% of final energy.

3. Two thirds of growth is already from electricity. Between 2018 and 2023, electricity accounted for 63% of the growth in global final energy demand, while fossil fuels contributed just 5%. Continuity of this trend means disruption: if electricity demand continues to grow at around 3% per year, it will be enough to drive a structural decline in final fossil fuel demand by the end of the decade.

In this article, we trace six pivotal moments in the long, disruptive march of electrification — showing how electricity gained ground and why it is, once again, gaining momentum. We draw on rarely used data sets from Pinto, Fouquet and IIASA, considering both useful as well as final energy.

The history of electrification in six moments

The story of electrification has been covered in many books by authors such as Hughes, Nye or Freeberg. From that rich history, we focus on six moments which give insights relevant to the situation in 2025.

1. Rapid entry (1910s)

The first wave of electrification began with invention. Edison developed the practical incandescent light bulb in the late 1870s; Tesla and Westinghouse introduced alternating current motors and systems in the 1880s. These breakthroughs set off the first electricity race focused on lighting and machine drives powering conveyor belts, pumps, and appliances.

By the 1910s, electric motors and lightbulbs were rapidly displacing older technologies such as candles, gas lighting and steam power in industrial and domestic settings. Electricity leapt from one application to the next – first powering industrial processes and factory halls, then spreading into households through appliances and lighting.

Electricity offered cleaner, more versatile and controllable energy services, though it initially came at a premium. As production scaled and infrastructure developed, costs declined and eventually undercut those of incumbent technologies. What began as a costly high-end product rapidly became a mass-market commodity, enabling faster and broader uptake across the economy.

The UK’s electrification experience during this period of electric irruption — detailed for lighting below — illustrates how quickly the transition progressed once the price of electric lighting reached cost parity with that of gas lighting around 1920. Demand for gas for lighting fell rapidly as demand for electricity rose fast. It is also interesting to note that final energy demand itself fell by 60% because electricity was much more efficient at producing lumens. Gas demand also declined rapidly through the 1920s due to a sailing ship effect — a phenomenon in which an incumbent technology undergoes a burst of innovation and efficiency improvements in response to the competitive pressure of a superior alternative, as sailing ships once did when steamships emerged.

Though the outcome may now appear inevitable, electrification in these sectors was fiercely contested at the time. Gas lobbyists resisted electric lighting; city leaders hesitated; electric motors were dismissed as too weak for heavy industry. New technologies were considered too expensive, too complex, or simply implausible — until their advantages became undeniable.

This first wave of electrification showed how quickly change could unfold as soon as new electric technologies outperformed the old — not just on performance, but on price. And when that new technology is also more efficient, as electricity tends to be, energy demand can fall even as energy services grow.

2. Fast followers (1930s)

Electrification began in wealthy industrial economies — most rapidly in the US, UK, Germany and Japan — where capital, infrastructure and demand conditions were already in place. In the early 20th century, these countries saw a swift rollout of electrification, as electricity transformed factories, homes and urban life.

But electrification did not remain confined to the rich world. As the cost of electric technologies fell, they became accessible to a broader range of countries. By the 1930s, a second wave of electrification was emerging in economies such as China, India, and parts of the Middle East and Africa. The expansion was challenging, uneven and often constrained by limited infrastructure, and limited access to capital. Nevertheless, the global trend towards electrification had begun to take hold.

For many countries, electrification was not only an economic imperative but a strategic one. Reliable power became a prerequisite for industrial development, modern state-building and, increasingly, geopolitical influence.

As costs fell, electrification spread beyond the early leaders. Superior technologies rarely remain confined to one region once they become affordable.

3. Powering growth (1950s)

The post–Second World War period marked a dramatic expansion of the global economy. With reconstruction in Europe, industrialisation in Asia, and a consumer boom in North America, energy demand surged across nearly every region and sector. Yet electricity stood out — not merely keeping pace, but outgrowing even the fastest-expanding fossil fuels. In the 1950s and 1960s, global electricity consumption increased by approximately 6% per year, about 20% faster than oil and gas.

What set electricity apart was its ability to unlock entirely new and superior ways to provide energy services. Refrigeration, air conditioning and a wide range of household and industrial appliances became viable at scale. Many of these services had existed in rudimentary or exclusive forms — ice boxes before refrigerators, hand-powered tools before electric ones — but electricity made them scalable, affordable and accessible.

Electrification in this era expanded the role of energy. It not only transformed how economies operated, but also how people lived — bringing comfort, convenience and productivity to a growing share of the global population.

Much of this expansion was not just technological but institutional. It was governments and public institutions that led the electrification drive through state ownership, public investment, and national planning. In countries like France, Japan, and the UK, nationalised utilities coordinated grid expansion, electrified rural areas, and subsidised household appliances. Electrification was a deliberate, organized effort to deliver economic growth, modern services, and national development.

4. Growing amid energy shocks (1970s)

The oil crises of the 1970s brought a sharp shock to global energy systems. After decades of near-continuous growth, global energy consumption began to falter. As illustrated below, per capita consumption of oil, coal, and gas levelled off in the 1970s and has remained flat ever since.

Electricity, however, proved more resilient. Even amid price shocks, economic disruption, and emphasis on conservation, electricity demand per capita continued to rise—almost unperturbed by the twin shocks of the 1970s. At the same time, electricity was extending its reach into new countries and regions, bringing power to communities that had previously gone without. As electrification spread, so too did its dividends: daily life became more productive, education and healthcare improved, and life expectancy began to climb.

For the average global consumer, a clear trend was emerging: the growing appetite for energy increasingly translated into a demand for electrons rather than molecules.

5. Taking the lead (2007)

In 2007, electricity became the largest source of useful energy — overtaking all other energy carriers in terms of the services actually delivered. Today, it powers 34% of useful energy services, and its share continues to rise. In the buildings sector, electricity provides 45% of useful energy and in industry, 35%.

This shift is not always reflected in traditional energy statistics, which focus on primary or final energy consumption. These metrics often overlook the thermal losses inherent in fossil fuels and therefore understate electricity’s role. But when measured in terms of useful energy — the energy that actually delivers services like vehicle-kilometres driven or tonnes of industrial output — electricity has already taken the lead. It is now not only the largest part of the global energy system but also its primary engine of growth.

6. Stalling out fossil fuel consumption (2014)

As electrification deepens, its impact on fossil fuel consumption becomes more visible — not just in relative terms, but in absolute volumes. Since the 1980s, electricity’s share of final energy use has increased across nearly every sector.

Over time, a series of relative peaks and plateaus has culminated in an absolute plateau in fossil fuel demand. Gains in electrification and energy efficiency have driven fossil demand to peak and plateau in two of the three major end-use sectors: industrial consumption in 2022 (the latest year for detailed WEB data) is below its 2014 level, and 2022 demand from buildings is still below its 2018 peak. Transport may well peak this year, though confirmation will take another year or two. From 2018-2023, 63% of the growth in final energy demand came from electricity, and just 5% from fossil fuels.

From 2000 to 2018, fossil fuel demand grew at 1.8% a year; from 2018 to 2023 it has grown at 0.1% a year. The era of rapid structural expansion in fossil fuel use is over. Demand now rests on an elevated plateau.

A similar pattern can be observed at the country level. The growth of electricity has driven peak final fossil fuel demand in one country after another. Nearly two thirds of the 155 countries covered by the IEA had seen a peak in final fossil fuel demand by 2019.

Today’s defining moment

This brings us to the present. We are on the cusp of another pivotal moment in electrification. Many energy services once thought impossible to electrify are now technically and commercially viable. As electricity is highly efficient, this shift will curb overall energy demand — even as electricity demand continues to grow — pushing fossil fuel demand into structural decline.

The ceiling of the possible was never higher

What defines the current stage of electrification is the wide range of sectors and technologies now within its reach. Until recently, electrification was mainly limited to lighting and machine drives — which together make up only 14% of final energy demand.

Over the past two decades, major technical barriers to electrifying other sectors have steadily fallen. Early electric vehicles were hampered by short ranges and low torque, while heat pumps used to struggle in cold climates where heating demand is highest. These limitations have largely been resolved, as EV range and power have improved and a new generation of heat pumps can now operate effectively in colder conditions.

In the past decade, these technologies have also become cost-competitive. EVs now rival internal combustion vehicles in upfront price in many markets. Heat pumps are more efficient and offer meaningful savings, even in colder regions. Electric motors have become cheaper, more compact, and widely deployable.

As a result, two major sectors — road transport and low-temperature heating — are now open to electrification. Together, they account for almost 50% of global final energy demand. Just a decade or two ago, these sectors were considered out of reach. Today, they are the next frontier in electricity’s expansion.

In the 1910s, the combination of technical superiority and falling costs drove rapid adoption of electric technologies. Today, a similar dynamic is playing out with electric vehicles — as they reach cost parity in key markets like China and across Europe, adoption is accelerating sharply.

And as in the 1930s, emerging economies are proving to be fast followers. A fifth of emerging economies have already overtaken the OECD in electrification levels.

Electricity is also continuing to open up entirely new energy services — as we saw it did in the 1950s with household appliances. One modern example is computing and artificial intelligence, which might be seen as the electrification of thinking.

And, as in the 70s, we should expect electricity to keep outpacing other fuels — or even push them into decline.

Electricity growth comes with a multiplier

As electrification expands into the vast new domains of transport and heating, many assume that electricity demand growth will surge to keep up. After all, electrifying such large and energy-intensive sectors sounds like a recipe for runaway load growth.

But the reality is more surprising. Rapid electrification, even at the scale envisioned in most deep decarbonisation scenarios, does not require a significant acceleration in global electricity demand growth. Most scenarios assume global electricity demand will grow by about 3% per year through 2050 — the same rate of growth that electricity has enjoyed since 1980. Of course, this will mean faster growth in some regions. As we will explore in a future piece, the OECD has grown markedly more slowly and will need to accelerate. But at the global level, deep electrification is essentially a continuation of a long-standing trend of electricity demand growth.

One reason why we can electrify without a surge in electricity demand lies in the efficiency of electric technologies. New electrotech, such as EVs and heat pumps are roughly three times more efficient than their fossil counterparts, meaning that each new unit of electricity can displace two to three units of fossil energy. Structural change, in other words, comes not from accelerating demand but from the multiplying effect of electrification itself. Much like earlier waves when electric motors replaced steam engines or lighting electrified, every exajoule of electricity can displace two to three exajoules of other final energy consumption.

The impending decline of fossil fuel consumption

Electricity is now driving growth in energy demand, while fossil fuel use is nearing its peak and headed for decline. The chart below of the IEA’s APS (Announced Pledges Scenario) shows that even as the global economy is expanding, total energy consumption is beginning to level off. This is because electricity is rapidly moving into sectors like transport, heating, and industry, displacing fossil fuels. With far greater efficiency, electric technologies reduce the total energy required to deliver the same services, so final energy demand growth falls. As electricity takes the lead, fossil fuel demand flattens — and is set to fall after 2030.

We’ve come a long way on electrification. For much of its history, electricity grew alongside other forms of energy. But over the past few decades, it has become the dominant source of energy demand growth. And now, with a century of momentum behind it, electrification is entering its next act: displacing fossil fuels and becoming the backbone of the global energy system.

Acknowledgements

The authors would like to acknowledge four historical datasets used in this article: IIASA’s Primary, Final and Useful Energy Database created by Simon De Stercke, Roger Fouquet’s Heat, Power and Light: Revolutions in Energy Services (Edward Elgar Publications, 2008), Pinto et al.’s “The rise and stall of world electricity efficiency: 1900–2017, results and insights for the renewables transition” (Energy, 2023), and the International Energy Agency’s World Energy Balance.