Volvo Group will start taking orders in 2026 for its new, long distance battery-powered truck. The Volvo FH Aero Electric can, according to the manufacturer, be driven for up to 600km on a single charge and can recharge within 40 minutes.
The development by the Swedish group is part of a global push to reshape energy consumption as well as supply to tackle global warming.
Just as important as the development of new wind and solar farms to generate electricity without carbon dioxide emissions is the overhauling of vehicles, heating systems and factories so they can run on electricity instead of combustion processes, say energy and climate experts.
They say that this so-called “electrification” of demand will create a more efficient energy system overall by avoiding losing energy while either burning fossil fuels or using electricity to make synthetic fuel for a combustion engine.
“Clean electrification is very much the backbone of the energy transition,” says Elena Pravettoni, head of analysis at the Energy Transitions Commission think-tank. “It’s going to do a lot of the heavy lifting.”
Under recommendations from the United Nations, statisticians working out how much energy the world consumes typically do not count all of the energy from the wind and sun that falls on wind turbines and solar panels, only that which is turned into electricity. By contrast, they do count the energy wasted through burning and extracting fossil fuels, meaning the overall energy requirements of a fossil fuel system are higher.
Meanwhile, electric cars use about 2-4 times less energy than their fossil fuel counterparts, as they avoid heat losses and use regenerative braking, according to IEA modeller Anthony Vautrin. And heat pumps can produce three or more units of heat for every unit of electricity they use to draw warmth from the outside air.
The IEA’s modelling of a world on track to meet its decarbonisation targets shows final energy consumption falling by as much as 15 per cent compared with current levels by 2035, because of electrification and other energy efficiency measures such as better insulation, even as GDP continues to grow.
“Fundamentally, electricity can be a much more efficient energy carrier,” says Michael Dodd, business director for UK and Ireland power grids at the consultancy DNV.
Jan Rosenow, professor of energy and climate policy at the University of Oxford’s Environmental Change Institute, says overhauling the world’s energy system to move away from fossil fuels becomes less challenging when the efficiency benefits of electrification are taken into account. That means the outlook for the “energy transition” is more optimistic than it can appear. “There are other benefits such as improved air quality,” he adds.
Yet despite the benefits, there are also significant challenges. These range from the huge investments needed to overhaul technology and lay new electric cables, to persuading households to switch to different types of transport and heating equipment, redesigning electricity markets and coping with the intermittency of the wind and the sun.
The scale of the potential overhaul is huge: in a world on track to meet net zero goals, the IEA estimates the share of electricity in final energy consumption would rise from about 20 per cent globally today to around 35 per cent in 2035 and about 55 per cent by 2050.
Yet progress so far is patchy: despite growing adoption of electric cars in Europe, the electrification rate in the EU27 has hovered at about 22 per cent since 2007, according to Eurostat figures.
Europe’s rate of electric car sales in 2024 of one in five of all car sales had moved little from the previous year, while some heavy industries that could potentially electrify are struggling to overhaul processes because of factors including high electricity prices compared with competitors in China and the US.
After a surge in 2022 when gas prices were particularly high, heat pump sales fell 22 per cent between 2023 and 2024 in Europe including the UK, according to the European Heat Pump Association, as gas prices fell and some governments withdrew generous subsidies. Demand in the UK in particular has been held back by the relatively high price of electricity compared with gas.
Electricity demand per se is not the only factor: demand also needs to become more flexible to match intermittent supply from the wind and the sun, and limit the amount of storage, transport and backup capacity that needs to be built. In practice, this can mean charging electric cars when it is windy and sunny.
The combination of subdued electricity demand and flexible demand, the growth of solar farms, and limited transport and storage capacity has led to increasingly volatile wholesale electricity prices in Europe: plunging during the middle of the day before jumping as the sun goes down.
“It’s fair to say that over the last couple of years we’ve been frustrated by the lack of progress particularly that EVs and decarbonised heat are making,” says Peter Osbaldstone, research director for European power markets at Wood Mackenzie. “There comes a point where there just isn’t any more market space into which to deploy renewables.”
Electrification rates in the US have also flatlined at about 22 per cent over the past decade. In China, by contrast, electricity now accounts for about 30 per cent of final energy demand, compared with about 12 per cent in 2000, as the country reduces its dependence on imported petrol and gains an edge in clean energy technology.
Domestic EV sales are forecast to hit about 12.5mn this year, and the country is expected to spend as much as $800bn in 2025 upgrading its electricity grids.
Progress is also being made in less high-profile industrial processes such as water desalination, a growing source of energy demand. Vautrin at the IEA points out that in the Middle East and north Africa region — which is heavily reliant on desalination for its water needs — the last major fossil fuel-based desalination plant was installed in 2018.
Volvo’s launch of the Volvo FH Aero Electric is another example of progress beating expectations. Trucks were once considered too difficult to electrify given the amount of energy they require. But “there has been significant improvements in battery density”, says Vautrin.