Age of Electricity: What It Means for Your Power Bill

For most households, the energy transition is not an abstraction. It shows up in the price of running an air conditioner during a heatwave, in the cost of charging a car, in the monthly electricity bill. That is the framing Fatih Birol, executive director of the International Energy Agency, chose when he described the world as having entered “the age of electricity”, speaking to the Guardian in an interview at the Cop31 UN climate summit in Turkey.

Birol’s argument is that the era dominated by coal, oil and gas is giving way to one in which electricity becomes the dominant source of energy. “We will still use oil and gas, but the dominant source of energy is becoming electricity,” he said. The numbers behind that claim are striking. Over the last ten years, the world added about 5,000 gigawatts of electricity generation. In a conservative estimate, he expects about 12,000 gigawatts in the next decade, more than double the previous figure.

The consequences reach into ordinary life in ways the summit’s negotiators are only beginning to grapple with. Air conditioning is one of the clearest examples. In the United States, about 90% of households have access to it. In India, fewer than 20% do. In Nigeria, about 5%. As heatwaves grow more intense and more frequent under rising global temperatures, Birol noted, people who can afford them buy air conditioners, and demand for the electricity to run them grows explosively. “With the increasing effects of climate change, and if they have more money, [people] buy air conditioners,” he said.

Meanwhile, transport is changing at a similar pace, and it is visible in what people buy. Five years ago, only 5% of cars sold worldwide were electric. This year, the IEA expects roughly one-third of all cars sold to be electric, and electric trucks are arriving. Outside China, electric car sales have risen by 60% in the last nine months. “This is going to displace a significant amount of oil,” Birol said.

A third major driver, alongside transport and cooling, is the growth of AI datacentres pushing electricity demand upward. Global electricity demand, Birol said, is growing three times faster than total energy demand. “And it is impossible to stop it. The one and only issue is making electricity affordable for people.”

Affordability is where the human stakes become sharpest, and Birol was blunt about the cause of high bills in Britain. “There is always a debate about this in the UK, but in fact the single most important reason why UK electricity prices may be on the high side is reliance on imported gas. Gas prices went up, so did the electricity prices, full stop.” The remedy, he argued, is not importing more gas but building more renewable electricity at home.

The wider picture explains why that shift matters so much. Electricity currently meets about a quarter of most energy needs, while three-quarters of final energy worldwide still comes from fossil fuels, mostly for transport, heating and industrial uses. Because fossil fuels are inefficient, most of that energy is wasted as heat; when activities are electrified, only about half the energy needs to be replaced. Renewables already supply a growing share of generation, a process Birol expects to accelerate.

Governments from 185 countries are meeting this week and next in Antalya, with the Turkish and Australian governments jointly presiding, and electrification is among the key topics. A resolution to derive 35% of final energy worldwide from electricity by 2035 is on the table, and Birol said most countries back it. If adopted, it would send “an unmistakable signal to the markets and investors that governments see that the future of energy is in electricity”, potentially one of the most consequential decisions from Cops in recent years.

Consensus rules mean a small number of objectors can block the text, and governments including Saudi Arabia and Russia are said to be opposed. Even so, Birol argued, the underlying shift would continue regardless, driven by datacentres, vehicles and cooling. For him, the case rests on security and cost as much as climate: electricity generated within a country, unlike imported fossil fuels, belongs to its own people. “If the electrification pledge comes out [of Cop31] and the countries decide that the world’s energy future is electric, then it will definitely lead to a secure, more affordable and more livable planet.”

Whether the pledge survives the objections in Antalya may determine how quickly that affordability arrives for the households already watching their bills.