Written By: Laura Turner
Electrification is the process of replacing technologies that require fossil fuels (coal, oil, and natural gas) with those that rely on electricity. It has become a popular - and hotly debated - decarbonization strategy as governments and many industries seek to limit their reliance on fossil fuels.
Probably the most recognizable example of electrification is the growing market for electric vehicles (EVs) and the installation of EV charging stations at multifamily properties, offices, and other commercial buildings. As transportation accounts for about one-third of US energy use, this sector is an important target for electrification. At the same time, residential and commercial buildings account for an additional third of energy use in this country. Most of this energy consumption depends on fossil fuels.
There is no doubt that decarbonization is necessary to curb the worst effects of climate change, and electrification is a critical decarbonization strategy. It is one of the only feasible ways to limit reliance on fossil fuels in the built environment and in the transportation sector without major disruption. It also offers an opportunity to increase reliance on renewables.
As such, electrification presents a realistic path toward a clean energy future. Yet given the current energy and economic landscapes, there are some major challenges that must be addressed if the transition to carbon neutral technologies is going to be a smooth one.
1. Job losses
The fossil fuel industry accounts for about 12.6 million jobs worldwide. A 2021 study outlined that decarbonization could reduce this figure to 3.1 million jobs by 2050. At first glance, this is an incredibly bleak statistic when one considers the economies and livelihoods that rely on the energy landscape in its current form. However, the same study indicated that employment in renewable energy could increase from 4.6 million to 22 million on the same timeline – a net increase of 7.9 million jobs in the energy sector globally.
Job losses in the fossil fuel industry are an unavoidable reality when it comes to electrification. But with appropriate training and transition opportunities, as well as mindful economic development in the communities that rely on these industries, there does not have to be an equivalent cost to peoples’ livelihoods.
2. Energy prices
With energy prices at record highs, many people are anxious about investing in fossil fuel alternatives. This is further complicated by the fact that energy markets are significantly more complicated than most people realize, and the popular conversation surrounding energy prices does little to accommodate its nuances.
The prices we are experiencing globally are the result of a number of factors: climate change and extreme weather driving up demand for electricity, increased natural gas prices, decreased investment in oil since 2020 creating a supply issue, and repairs to the electric grid, to name a few.
Electrification actually offers an important solution to many of these problems. Electricity markets are less volatile than those associated with coal, oil, and natural gas. This means that energy prices will be more stable and predictable as we transition away from fossil fuels toward cleaner, less centralized energy production.
Energy prices will also be lower. The technologies associated with electricity (e.g., heat pumps and electric cars) require less maintenance and reduce heating bills. Alongside investment in energy efficiency and renewables, it is estimated that electrification will save an estimated $500 per household annually in energy costs.
Finally, electrification is critical to long term economic stability. The staggering inflation affecting consumer prices today is caused more by energy prices than any other factor. As climate change continues to incite record temperatures and extreme weather events, inflation on this scale will become the norm unless we invest in alternative fuel sources, including electrification.
The electrification conversation is much more nuanced than this article can capture, but these two challenges highlight that at the core of the electrification debate are two aspects of human life that are essential to every person’s life, livelihood, and economic security: the security of the energy industry and a safe and stable global environment.
While electrification is critical to achieving carbon neutral goals and creating a reliable and sustainable energy future, the process of achieving it is fraught with conflicting viewpoints because it promises an unprecedented shift in the energy industry and the lives tied up in it.