Global Energy Perspective 2023: Industrial electrification outlook

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The Global Energy Perspective 2023 models the outlook for demand and supply of energy commodities across a 1.5°C pathway, aligned with the Paris Agreement, and four bottom-up energy transition scenarios. These energy transition scenarios examine outcomes ranging from warming of 1.6°C to 2.9°C by 2100 (scenario descriptions outlined below in sidebar “About the Global Energy Perspective 2023”). These wide-ranging scenarios sketch a range of outcomes based on varying underlying assumptions—for example, about the pace of technological progress and the level of policy enforcement. The scenarios are shaped by more than 400 drivers across sectors, technologies, policies, costs, and fuels, and serve as a fact base to inform decision makers on the challenges to be overcome to enable the energy transition. In this article, we examine the key role of electrification in the energy transition, as well as the potential bottlenecks that need to be overcome along the electrification supply chain—and the value that doing so could create.
 

The energy transition is driving significant demand for technologies that enable electrification. Electrification and the continuing shift toward green and carbon-neutral power generation are likely to play a large role in reducing global emissions, but enabling technologies, such as solar PV, wind, heat pumps, and battery energy storage systems (BESS), may require significant scaling over the next decade. Moreover, bottlenecks along the electrification supply chain, including supply chain risks, labor shortages, and uncertainty in capital deployment, would need to be overcome to ensure that future supply can meet growing demand. Nevertheless, these bottlenecks can be turned into value-creation opportunities, particularly for original equipment manufacturers (OEMs).

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