Electrification: Accelerating the Energy Transition

By Pami Aalto

Electrification: Accelerating the Energy Transition offers a widely applicable framework to delineate context-sensitive pathways by which this transition can be accelerated and lists the types of processes and structures that may hinder progress towards this goal. The framework draws insights from well-established literature, ranging from technological studies to socio-technical studies of energy transitions, on to strategic niche management approaches, (international) political economy approaches, and institutionalist literatures, while also adopting wider social theoretical ideas from structuration theory. Contributors discuss a multitude of case studies drawn from global examples of electrification projects.

Brief case studies and text boxes help users further understand this domain and the technological, infrastructural and societal structures that may exercise significant powers.

• Proposes a globally applicable, inclusive framework linking together several literatures of energy transition research (ranging from the social sciences to law and engineering)
• Assesses the regional and national applicability of solutions, covering the societal structures and interests that shape the prospects of their implementation
• Extends the analysis from technological and infrastructural solutions to the policies required to accelerate transition
• Introduces several country level case studies, thus demonstrating how to harness niches of innovation, kick-start the adoption of a solution, and make it mainstream

• Language: English
• Publisher: Academic Press
• Release date: Aug 8, 2021
• ISBN: 9780128221761

Book preview

Electrification

Accelerating the Energy Transition

Editor

Pami Aalto

Faculty of Management and Business/Politics Unit, Tampere University, Tampere, Finland

Table of Contents

Cover image

Title page

Copyright

Contributors

Preface

I. Framework for transition to electrification

Chapter 1. Introduction: electrification and the energy transition

1.1. Electrification as the new oil

1.2. Why and how to accelerate electrification?

1.3. Technological part-solutions

1.4. How to engage the wider field of stakeholders?

1.5. Structure of the book

Chapter 2. Globally and locally applicable technologies to accelerate electrification

2.1. Introduction

2.2. Wind power

2.3. Solar energy

2.4. Hydropower

2.5. Marine power

2.6. Bioenergy

2.7. Geothermal energy

2.8. Small modular nuclear reactors

2.9. Conclusion

Appendix 1: Overview of technology features of low carbon energy sources

Chapter 3. How to accelerate electrification? The leverage of policies

3.1. Introduction

3.2. The interests driving policy-makers

3.3. How policy-makers can catalyze change: Types of policy instruments

3.4. How do policy-makers formulate policies?

3.5. From policies to solutions

II. Part-solutions

Chapter 4. How can society accelerate renewable energy production?

4.1. Introduction

4.2. The problem: Constraints on accelerating wind and solar power generation

4.3. Policies

4.4. Case study: Policies for accelerating renewable energy in the EU

4.5. Case study: Federal and state-level policies in the USA

4.6. Case study: The battle against nuclear power in Japan

4.7. Conclusion: Policy mixes for different phases of RES integration

Chapter 5. The role of energy storage and backup solutions for management of a system with a high amount of variable renewable power

5.1. Introduction

5.2. Energy storage options and features in flexible systems

5.3. Battery storage in the USA

5.4. Gas engines and heat storages in future power systems

5.5. The case of household-level batteries

5.6. Conclusion

Chapter 6. Toward smarter and more flexible grids

6.1. Introduction

6.2. Smart grids in electrical energy system transformation

6.3. Need for flexibility

6.4. Case study: Large-scale industrial loads as flexible resources

6.5. Case study: Smart metering

6.6. Case study: Power-based grid tariffs

6.7. Case study: Energy communities and microgrids

6.8. Conclusion and implications

Chapter 7. Policies for climate-neutral road transport

7.1. Introduction

7.2. What do we know?

7.3. The problem: Constraints on electrification in road transport

7.4. Policies

7.5. Case study: Policies for accelerating the EV sector in the Nordic countries

7.6. Case study: EV policies in China and Japan

7.7. Case study: Emission reduction in the heavy-duty transport sector by means of biogas

7.8. Conclusions: Policy lessons

Chapter 8. Electrification and energy efficiency in buildings: Policy implications and interactions

8.1. Introduction: What does electrification mean in the context of buildings?

8.2. The problem: Policies for electrification and energy efficiency

8.3. Case study: The EU's energy efficiency first principle in the electrification of buildings

8.4. Case study: Implementation of EU legal rules in Finland

8.5. Interlinkages of energy-efficiency policies with the electrification of buildings

8.6. Conclusion

Chapter 9. From energy consumers to prosumers—how do policies influence the transition?

9.1. Introduction

9.2. What is energy prosumerism?

9.3. The problem: How to engage consumers in the energy system transition?

9.4. Case studies

9.5. Conclusions

Chapter 10. Anticipating future trends in energy transition: Multilevel dynamics in energy policy agenda-setting

10.1. Introduction

10.2. The problem: Path dependency in a large technical system

10.3. Trend pyramid framework combined with the multilevel perspective

10.4. The national level: Discursive struggles on energy policy in Finland

10.5. From national to global level: Big data analyses

10.6. From micro-level niches to global level: Scientific debates

10.7. Conclusions

III. Combining part-solutions

Chapter 11. How to combine various solutions in a national context?

11.1. Introduction

11.2. Case study: The Finnish power system

11.3. Scenarios for future electric power system development in Finland

11.4. Analysis of scenarios for future electric power system development in Finland

11.5. Discussion

11.6. Policy recommendations

Appendix 1. Hot water heat storages connected to district heating networks in use and already decided projects

Chapter 12. Analyzing electrification scenarios for the northern European energy system

12.1. Introduction

12.2. Scenarios for 2030

12.3. A scenario for 2050

12.4. Results: the scenario for 2030

12.5. Results: the 2050 case

12.6. Conclusions

Chapter 13. Toward a roadmap for electrification

13.1. Introduction

13.2. Electrification and phases of transition

13.3. How to move from one phase to another: electrification in practice

Index

Copyright

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Contributors

Pami Aalto,     Faculty of Management and Business/Politics Unit, Tampere University, Tampere, Finland

Kalle Aro,     Faculty of Management and Business/Politics Unit, Tampere University, Tampere, Finland

Mert Bilgin,     Department of Political Science and International Relations, School of Humanities and Social Sciences, Medipol University, Istanbul, Turkey

Tomas Björkqvist,     Faculty of Engineering and Natural Sciences/Automation and Mechanical Engineering Unit, Tampere University, Tampere, Finland

Pirkko Harsia,     Faculty of Building Services Engineering, Built Environment and Bioeconomy Unit, Tampere University of Applied Sciences, Tampere, Finland

Teresa Haukkala,     Aalto University School of Business, Espoo, Finland

Juhani Heljo,     Faculty of Built Environment, Civil Engineering Unit, Tampere University, Tampere, Finland

Hannele Holttinen,     Recognis Oy, Espoo, Finland

Pertti Järventausta,     Faculty of Information Technology and Communication Sciences/Electrical Engineering, Tampere University, Tampere, Finland

Jari Kaivo-oja

Finland Futures Research Centre, University of Turku, Tampere, Finland

Kazimiero Simonavičiaus University, Vilnius, Lithuania

Kari Kallioharju

Faculty of Built Environment, Civil Engineering Unit, Tampere University, Tampere, Finland

Faculty of Building Services Engineering, Built Environment and Bioeconomy Unit, Tampere University of Applied Sciences, Tampere, Finland

Sarah Kilpeläinen,     Faculty of Management and Business/Politics Unit, Tampere University, Tampere, Finland

Juha Kiviluoma,     VTT Technical Research Centre of Finland Ltd., Espoo, Finland

Matti Kojo,     Faculty of Management and Business/Politics Unit, Tampere University, Tampere, Finland

Jukka Konttinen,     Faculty of Engineering and Natural Sciences/Materials Science and Environmental Engineering, Tampere University, Tampere, Finland

Juha Koskela,     Faculty of Information Technology and Communication Sciences/Electrical Engineering, Tampere University, Tampere, Finland

Kirsi Kotilainen,     VTT Technical Research Centre of Finland Ltd., Espoo, Finland

Kimmo Lummi,     Faculty of Information Technology and Communication Sciences/Electrical Engineering, Tampere University, Tampere, Finland

Jyrki Luukkanen,     Finland Futures Research Centre, University of Turku, Tampere, Finland

Yrjö Majanne,     Faculty of Engineering and Natural Sciences/Automation and Mechanical Engineering Unit, Tampere University, Tampere, Finland

Akihisa Mori,     Graduate School of Global Environmental Studies, Kyoto University, Kyoto, Kyoto Prefecture, Japan

C. Johannes Muth,     Faculty of Management and Business/Politics Unit, Tampere University, Tampere, Finland

Fanni Mylläri,     Faculty of Engineering and Natural Sciences/Physics, Tampere University, Tampere, Finland

Anna Pääkkönen

Enmac Oy, Tampere, Finland

Faculty of Engineering and Natural Sciences/Materials Science and Environmental Engineering, Tampere University, Tampere, Finland

Lasse Peltonen,     Faculty of Information Technology and Communication Sciences/Electrical Engineering, Tampere University, Tampere, Finland

Sirja-Leena Penttinen,     Faculty of Social Sciences and Business Studies/Law School, University of Eastern Finland, Joensuu, Finland

Esa Pursiheimo,     VTT Technical Research Centre of Finland Ltd, Espoo, Finland

Antti Rautiainen,     Faculty of Information Technology and Communication Sciences/Electrical Engineering, Tampere University, Tampere, Finland

Sami Repo,     Faculty of Information Technology and Communication Sciences/Electrical Engineering, Tampere University, Tampere, Finland

Topi Rönkkö,     Faculty of Engineering and Natural Sciences/Physics, Tampere University, Tampere, Finland

Ilkka Ruostetsaari,     Faculty of Management and Business/Politics Unit, Tampere University, Tampere, Finland

Ulla A. Saari

Faculty of Management and Business/Industrial Engineering and Management, Tampere University, Tampere, Finland

Jönköping International Business School, Jönköping University, Jönköping, Sweden

Jaakko Sorri,     Faculty of Built Environment, Civil Engineering Unit, Tampere University, Tampere, Finland

Benjamin Sovacool

Center for Energy Technologies, Department of Business Development and Technology, Aarhus University, Herning, Denmark

Science Policy Research Unit (SPRU), University of Sussex Business School, Falmer, East Sussex, United Kingdom

Kim Talus,     Faculty of Social Sciences and Business Studies/Law School, University of Eastern Finland, Joensuu, Finland

Jussi Valta,     Faculty of Management and Business/Industrial Engineering and Management, Tampere University, Tampere, Finland

Jarmo Vehmas,     Finland Futures Research Centre, University of Turku, Tampere, Finland

Taimi Vesterinen,     Faculty of Engineering and Natural Sciences/Materials Science and Environmental Engineering, Tampere University, Tampere, Finland

Matti Vilkko,     Faculty of Engineering and Natural Sciences/Automation and Mechanical Engineering Unit, Tampere University, Tampere, Finland

Preface

This book focuses on a subject that is little discussed on its own terms—the electrification of energy systems and societies. Such a focus differs from most studies examining the electric energy system as such or its future development. Indeed, studies abound in various engineering disciplines on the evolution of electric energy systems. Often these studies also mention how electricity is becoming the main energy carrier, notably replacing the combustion of fossil fuels for power and heat. A burgeoning field of studies also concentrates on how electric energy systems are developing toward smart grid type systems of systems, where the management of electricity flows becomes central not only for the production, distribution, and consumption of power but also for energy use in transport, buildings, and industry. Such studies span perspectives from several engineering, information, and communication sciences with research on computer science, artificial intelligence, software, as well as studies on innovation and technology development, for example. The technical insights of such studies will naturally be surveyed in this book but chiefly to help us better understand electrification as a megatrend that transforms energy systems and societies.

The field of research on electricity markets is already well established in economics and business studies. However, electrification as an overall megatrend reshaping the energy markets and business in several ways has so far received scant explicit attention. This is surprising, given that electrification is a logical yet game-changing outcome of the globally ongoing transition to new renewable energy sources such as wind and solar power that produce only electricity—but not heat, unlike fossil fuels, biomass, or geothermal energy. This switch to renewable energies is also a pervasive topic in the predominantly social scientific field of sustainability transitions, but very rarely do these studies extend to questions such as what electrification is ultimately all about, how it might develop, what such development presupposes, what problems will likely be encountered on the way, and what the consequences of all this may be.

In this book, electrification is considered from the perspective of climate neutrality. Climate neutrality is a grand policy goal set by human beings—an increasing number of societies, companies, and civil society actors—one that envisages renewable electricity generation with electricity-only resources as the main means to that end. Because of this essentially societal aspect of electrification, studies on this subject should not be limited to the characteristics of the energy system. Ultimately, research should reach out to address the implications of electrification for society, economy, and politics and likewise to international relations and what is often called the geopolitics of energy in a world where oil or natural gas matter less than they once did. In other words, electrification becomes a relevant subject of enquiry in multiple fields because of the outcome of climate neutrality it can deliver, although its character as a technical phenomenon also remains important.

Moreover, the world is anxiously hastening the efforts for climate neutrality. This means that most societies will for a long time be seeking ways to speed up their actions. Accelerated transition therefore becomes urgent. Hence, the focus here is on how the adoption of various electrification measures could be accelerated by means of developing and implementing policies and policy instruments. Approaching electrification from the perspective of how its introduction could be accelerated in the interests of achieving climate neutrality is the new path of research this book seeks to pioneer.

Naturally there are many important transition paths toward climate neutrality meriting attention in parallel with and apart from electrification. However, hardly any of these offer equal measures of globally scalable potential. One of them is the frequently mentioned field of power-to-X technologies and the associated hydrogen economy, where gas-based fuels replace fossil fuels in several energy end-use sectors and open up promising new value chains. While those prospects are indeed great, we wish to accentuate that these will mostly likely be outcomes of widespread electrification that first needs to advance. Large-scale hydrogen economy has to be climate neutral or sustainable in the wider sense, and it may best be achieved when based on hydrogen produced by renewably generated electricity.

This book is intended for several reader segments. Energy engineers will learn of the interface between technologies, infrastructures, society, and policy. With this, this book refers to societal path-dependencies, lock-ins, vested interests, and other constraints along the way to new technologies and infrastructures, elaborating policy instruments to overcome these, and describing some unsuccessful attempts to do so. Social scientists and energy lawyers will learn of the technologies and infrastructures for electrifying energy systems, their mutual interdependencies, and how they both constrain and enable societal choices and policy options. In other words, while readers will undoubtedly find some sections of this book familiar terrain, some other sections should guide them to new territories. For policy analysts, professionals, and practitioners, this book is intended to serve as an accessible handbook on the state-of-the-art of technologies, infrastructures, and policies, and no less of their interrelationships, illustrated by means of several case studies. Overall, the role of various policy instruments and their use in suitable combinations is what differentiates this book from most studies on electric energy systems and climate-neutral transitions.

The agenda of energy systems transitioning toward climate neutrality via electrification in an accelerated manner, and the related policies, is a very broad field we can probe only selectively. Our case studies mostly concern developed countries. In many of them, electrification is progressing satisfactorily. Some references are made, however, to more challenging cases, where either material or social structures, or their combinations, inhibit similar development. In prospective studies, more attention will be needed on the world's numerous emerging and developing countries. This is especially the case, given that the patterns of inherited energy infrastructures and societal constraints are to some extent case-specific, requiring follow-up work on a number of cases. The implications of electrification for development policy and international relations are another area in need of further research. Likewise is the wider circle of policy processes from policy formation and development to implementation, evaluation, and follow-up, to which this book can only make passing reference.

The field opened up for enquiry here is decidedly interdisciplinary and should be even more so in the future. In many of the chapters that follow, engineers and social scientists representing a variety of specializations have worked together, in the capacity of codesign of the research reported, co-authorship, or interdisciplinary commentary and debate. This is not yet the new normal, but it should indeed become so for many questions on electrification. The need for more disciplinary studies naturally continues to exist simultaneously, but such studies cannot exist alone.

The authors are grateful for several sources of funding that have enabled the efforts reported here. The bulk of the work was supported by the large-scale consortium Transition to a Resource Efficient and Climate Neutral Electricity System (EL-TRAN, funded by the Strategic Research Council at the Academy of Finland, project no. 314319, 2015–21, and led by Pami Aalto). The partners comprised Tampere University, Tampere University of Applied Sciences, the University of Eastern Finland, the University of Turku, and VTT Technical Research Centre of Finland, with several public, private, and NGO sector stakeholders playing key roles as part of the consortium's interaction panel. This wide stakeholder involvement was invaluable for the consortium's work and helped to make it more relevant for the ongoing energy transition. Many colleagues not directly involved in this book have also greatly supported the consortium's work in various capacities and through invaluable cooperation: Karoliina Auvinen, Marika Hakkarainen, Mikael Hilden, Kaisa Huhta, Iida Jaakkola, Jari Ihonen, Johanna Kirkinen, Maria Kopsakangas-Savolainen, Timo Korpela, Aki Kortetmäki, Heidi Krons-Välimäki, Raimo Lovio, Anna M. Oksa, Ontrei Reipala, Armi Temmes, Pasi Toivanen, Sanna Uski, and Seppo Valkealahti.

We also wish to acknowledge the Business Finland funded project that has supported our work on energy use in buildings: the Center for Electrical Engineering and Energy Efficiency STEK (co-operation project Future Energy Solutions for the Urban Environment). Our work on producer-consumers (prosumers) has been supported by two further Business Finland–funded projects. The project Social Energy— Prosumer Centric Energy Ecosystem (ProCem, coordinated by Tampere University, 2016–18, with 15 companies involved); this project comprised an Internet-of-Things (IoT)-based technology platform for the exploitation of various distributed energy resources, taking into account both the electricity market and power system management perspectives. The project Prosumer Centric Energy Communities—towards Energy Ecosystem (ProCemPlus, 2019–21), with Tampere University, Tampere University of Applied Sciences, and VTT Technical Research Centre of Finland involved alongside 11 companies. This project examined the formation of individual energy communities into broader business-oriented energy ecosystems through several research themes and concrete pilot cases related to the development of energy communities, and analysed the role of microgrids and energy communities in the future energy ecosystem.

Several chapters of this book have also benefited from work within the Business Finland–funded consortium Black Carbon Footprint (BCfp, 2019–22, coordinated by Tampere University and Finnish Meteorological Institute, Topi Rönkkö and Hilkka Timonen), with several universities and companies as partners. The research for Chapter 10 is also linked to the project Platforms of Big Data Foresight (PLATBIDAFO), which has received funding from the European Regional Development Fund (Project No 01.2.2-LMT-K-718-02-0019) under a grant agreement with the Research Council of Lithuania. For speedy and reliable language revision work, we would like to warmly acknowledge Virginia Mattila.

Finally, the authors wish to thank numerous colleagues and commentators for critical comments and detailed observations in conferences and seminars, and our significant others for all their support and tolerance in the fairly challenging times of lockdown owing to the COVID-19 pandemic under which this book was prepared.

I

Framework for transition to electrification

Outline

Chapter 1. Introduction: electrification and the energy transition

Chapter 2. Globally and locally applicable technologies to accelerate electrification

Chapter 3. How to accelerate electrification? The leverage of policies

Chapter 1: Introduction

electrification and the energy transition

Pami Aalto ¹ , Teresa Haukkala ² , Sarah Kilpeläinen ¹ , and Matti Kojo ¹       ¹ Faculty of Management and Business/Politics Unit, Tampere University, Tampere, Finland      ² Aalto University School of Business, Espoo, Finland

Abstract

In this chapter, we characterize electrification as a megatrend directly shaping not only the energy system but also society, global development, and energy politics internationally. In particular, we highlight the high potency of electrification as a master solution for an accelerated transition to climate neutrality. Although electrification simultaneously creates challenges of its own, a high degree of electrification is technically possible, politically increasingly supported, and can be pushed further by emerging innovations. By referencing studies in the socio-technical literature, institutionalism, and political economy, we also draw attention to the different enablers and constraints on electrification that emerge when different actors and stakeholders on the micro-, meso-, and macro-levels of society are affected by electrification or themselves contribute to it. Finally, we introduce the subsequent chapters to this book on solutions and policy instruments to promote accelerated electrification.

Keywords

Acceleration; Climate neutrality; Electricity; Electrification; Energy transition; Renewable energy

1.1. Electrification as the new oil

Electricity is frequently referred to as the new oil or the new backbone of energy systems globally. Electricity powers an increasing number of activities, making electrification a megatrend decisively shaping our social and material environments. While this implies drastic changes and entails new questions to answer, it will also help to address some thorny problems we are facing.

We characterize the megatrend of electrification by referring to seven interrelated changes. The first three relate to the energy system, where the production, distribution, and consumption phases are becoming increasingly electrified. The fourth change pertains to indirect electrification, whereby electricity is used to produce for example synthetic fuels. The last three changes widen the perspective considerably. At the societal level, electrification has several highly transformative repercussions. On the wider international level, electrification has developmental implications while it also shapes our conceptions of the role of resources in international relations. We briefly survey each of these changes in order to outline the scope of this book.

1.1.1. What changes will electrification bring about?

First, in the production phase of the energy system, the globally ongoing turn to renewable energy sources acts as a major catalyst of electrification. There are sufficient renewable energy resources to replace our current use of fossil fuels, since renewables are plentiful in various forms throughout the planet; likewise a wide range of technological solutions for their exploitation are also available (Yahyaoui, 2018a,b). Despite this great potential, several problems remain to be solved to actually build and operate energy systems based entirely on renewable sources. Many of these problems are tackled in this book, where we proceed from the observation that globally the most potent and fastest expanding sectors of renewable energy, wind power, and solar PV power are electricity-only resources. Emerging resources such as tidal and wave power, alongside traditional hydropower, are also electricity-only resources. By contrast, burning fossil fuels releases heat that can be converted into mechanical energy and further into electricity. At the same time burning creates emissions—including waste heat from inefficient conversion processes—and noise from the combustion engines used for instance in the vehicles that populate our streets and roads.

We will propose several reasons for this turn to electricity-only renewable resources. However, we contend that this transition is particularly warranted because it can support the ambitious goals of the 2015 Paris Agreement on climate policy. In this Agreement, 175 countries agreed to reduce emissions of greenhouse gases (GHGs) into the atmosphere to jointly delimit long-term global warming to 1.5°C (UN, 2015). The Agreement expresses a political commitment to pursue climate neutrality, by which the International Panel on Climate Change refers to a state of affairs where human actions have zero effect on climate change. These include not only CO2 emissions but also emissions of other GHGs, of which Short-Lived Climate Pollutants (SLCPs) such as methane, black carbon, and ozone are most crucial (UNEP, 2019). Land-use issues are inseparable from GHG emissions, and refer to the carbon sink or the ability of forests, crops, swamps, seas, and, for example, wood products to bind CO2 (IPCC, 2018, p. 545).

Yet the transition to electricity-only renewables is hampered by several issues, primarily that they have to compete with the continuously expanding supply of fossil fuels. This expansion results from the production of unconventional oil and natural gas and the ability of the oil and natural gas industries to develop better methods of fully exploiting old, depleting fields (Covert et al., 2016). Fossil fuel industries nevertheless face constraints of their own. By the end of 2020, more than 1200 institutional investors had announced long-term divestment plans (withdrawing their investments) from fossil fuels. The climate benefits of divestment are undeniably contested; some think it may hamper the industry's conversion into less climate burdening business. Nevertheless, the greater problem from the perspective of climate neutrality is the ever-increasing global energy demand. This increase is fueled predominantly by the growing energy needs of developing (and emerging) countries, which consume most of the expanding fossil fuels supply while simultaneously increasing their own renewable production. In other words, the absolute volume of fossil fuel consumption may increase globally, despite divestment, alongside expansion in the absolute volume of renewables and an increase in their share of the energy mix. This would mean de facto higher cumulative GHG emissions. Such scenarios are possible, for instance, in Southeast Asia, India, and the Middle East (IEA, 2019a, Annex A). Finally, when contemplating who should reduce emissions and by how much, a solution fully serving the principles of distributive justice is elusive. The developed member countries of the Organization of Economic Cooperation and Development (OECD) remain responsible for roughly a half of the historically accumulated CO2 emissions (Kolstad et al., 2014, pp. 217–19; Blanco et al., 2014, p. 359).

Alongside the transition to electricity-only renewables, we also need to recognize the other transition paths to climate neutrality, some of which are complementary or built on electrification while others, at least to some extent, may compete with widespread electrification. Each of these paths has its own benefits and associated problems (see Box 1.1).

The transition path based on electricity-only renewables offers high climate neutrality gains, geographically wide applicability, and high scalability. These features may well make it the predominant path, but it is not problem-free. Regarding climate neutrality, the biggest problem in the production phase is high raw materials intensity. In life cycle analysis, wind and solar power face questions of environmental sustainability, as do all energy technologies (see Chapters 2 and 10). Moreover, wind and solar power are weather-dependent. Fortunately, in many regions, their use can be combined with the use of traditional renewable technologies such as hydropower, or biomass-based or geothermal facilities producing both power and heat, improving their attractiveness in environments requiring space heating. In some regions, concentrated solar power (CSP) plants can provide heat, cool, and power, while in others, solar thermal collectors or small-scale geothermal systems can supply heat to buildings. Further transition paths include hydrogen and other gas-based technologies, synthetic fuels, and carbon capture, utilization, and storage (CCUS) technologies (see Box 1.1), as well as traditional nuclear power alongside small-scale modular nuclear reactors (SMRs) (see Chapter 2). In fact, no form of production represents a silver bullet on its own. Hence electricity-only renewables alone do not have to completely solve the climate neutrality challenge and are likely to be combined with other modes of production (see Chapters 2, 4, 5, 11, and 12). In many cases, sector-coupling solutions are applicable whereby electricity is converted to heat, used directly in the heating of buildings or in industrial sectors in place of other fuels, or stored in gaseous or liquid form to be used later in transport, building or industrial sectors (Pilpola and Lund, 2018).

Box 1.1

Transition paths to climate neutrality

The electrification path is often linked to several gas-based paths, which can also be viewed as advanced phases of electrification. Perhaps the most potent is the energy use of hydrogen. A high volume of renewably generated electricity necessitates storing the occasionally generated excess electricity that cannot be fed into the grid, exported via electricity interconnectors, or instantly consumed. Such excess electricity can via electrolysis be converted into a gaseous storable resource by splitting water molecules into hydrogen and oxygen. The hydrogen can be reconverted to electricity upon demand and despatched to the electricity grid, stored in transportable fuel cells, or distributed via pipelines for use as fuel, for example, in the transport or industrial sectors. Alongside such renewable or green hydrogen, nonrenewable gray hydrogen can be produced directly from fossil fuels and blue hydrogen, when carbon capture, utilization, and storage (CCUS) technologies (see below) are added into the system. The different types of hydrogen have implications for climate neutrality targets.

Renewably generated electricity can furthermore be used to produce synthetic fuels. Overall, the paths where electricity is converted to other energy carriers, either gaseous or liquid formats, are often called power-to-X technologies. All such technologies offer benefits in terms of storability while concerns relate to the efficiency of conversion and identifying the additional value in relation to the direct use of electricity. Finally, the gas-based paths include the option of using organic matter to produce hydrogen or renewable biogas (which can be upgraded into biomethane that is compatible with natural gas infrastructures; see Chapters 2 and 7).

Retrofitting existing fossil fuel power plants with CCUS technologies is often proposed as a pragmatic means of reducing emissions without early phasing out of power plants so incumbent actors can recover their sunk cost investments. CCUS would enable the continued use of fossil fuels without large emissions, for example, in China, where the fleet of coal plants is relatively young, or in the USA, where unconventional natural gas is plentiful, widely exploited, and relatively inexpensive as long as its environmental implications are not fully appreciated. In the industrial sector, CCUS can help reduce emissions, for example, in the heavily emitting cement and metal industries. In the bioenergy segment, CCUS could decrease the CO2 emitted in power, heat, and biofuel applications. In this context CCUS is often viewed as a means to achieve negative emissions as carbon emitted in the combustion process is removed from the atmosphere and new biomass is expected to replace the utilized biomass, eventually binding carbon (REN21, 2020, p. 91). However, for both fossil fuel and biomass-based CCUS applications, uncertainty persists on the availability of large-scale carbon storage and demand for its use on a global scale, likewise on costs and low policy support, especially with the rapidly falling costs of wind and solar power (IEA, 2019a). The climate neutrality status of various CCUS technologies depends on whether the origin of the carbon is fossil fuel or biomass based, whether the carbon is stored, for how long, and whether it is used or not. These differences also shape the compatibility of CCUS technologies with emission trading or carbon pricing schemes.

Second, in the distribution phase, electrification reforges the global chains of energy as once they were known—based on unevenly distributed, point-source fossil fuel resources (van der Ploeg, 2011). The nature of these resources enables generating high revenue from long chains of value creation where minerals are extracted onshore and offshore, transported over long distances, converted into various fuels, and finally burned at high temperatures to produce power and heat. These end products are then distributed for consumption, with emissions transmitted locally, nationally, and globally. The gradual drift away from that world will decrease the strategic significance of oil and natural gas resources and their respective infrastructures including pipelines, tankers, and fuel terminals. The networks of filling stations will also be under pressure. Yet in the natural gas sector, investment in transmission and distribution pipelines, as well as liquefaction and regasification terminals for liquefied natural gas (LNG) are expected to proliferate until the end of the 2020s in developing and developed countries alike, and particularly in the USA. Natural gas infrastructure may also serve the potential expansion of the use of biogas, which is largely an unexploited resource (IEA, 2019a, pp. 583–7; see also Chapters 2 and 7). Weather-dependent resources may also need access to gas-based infrastructure if, for example, excess wind power is converted into hydrogen to be fed into a pipeline network (see Box 1.1).

At the same time, enormous investment is expected in electricity grids—globally, in the IEA's stated policies scenario, $354 bln annually during 2019–30, and $455 bln during 2031–40. In the sustainable development scenario, the cumulative needs are even greater (IEA, 2019a, pp. 748–9). Roughly a quarter of this investment need would be for Transmission System Operators (TSOs) to enhance transmission networks, for example, to connect offshore wind power parks with large-scale consumption in cities. The remaining three-quarters would be invested by Distribution System Operators (DSOs) (Petit, 2019, pp. 116–117). Such needs may arise because DSOs must reinforce their grids because of the extra demand for grid capacity created by the electrification of heating. Further needs may arise from the integration into the grid of decentralized electricity infrastructure such as rooftop solar panels. Such changes profoundly affect the management practices of electric energy grids, as in developed countries the grids are generally centralized, one-way systems built to deliver electricity from large or medium-scale power plants to the points of consumption. By contrast, in the rural parts of many developing countries, off-grid alternatives can be potentially highly useful, in the form of small-scale installations of solar power combined with battery storage for night-time use, for households, communities, or farms. Such solutions offer short-term installation periods and low upfront costs. This is important, especially when institutional capacity to develop centralized grids is low, investment capacity of the utility companies low, grid connection relatively expensive and expected energy demand relatively low, and where local resources can generate electricity directly onsite with low upfront cost (Levin and Thomas, 2016).

Third, in the consumption phase, we witness further examples of sector coupling in the form of transitions to electricity in transport, heating, industry, businesses, and households. In the transport sector, switching to electric vehicles (EVs) can replace a large share of oil-consuming vehicles. In the residential heating sector, electricity-consuming heat pumps can replace the burning of oil and natural gas (see Chapters 7 and 8). In the various industrial sectors, electrification can replace fossil fuels in the generation of the heat required in the production processes, via technologies such as infrared heating, ultraviolet curing, microwave and radio frequency heating, induction heating, melting or hardening, and electric arc furnaces. The globally increasing electricity access enables the use of new electric appliances and facilitates new use cases such as cooling and digitalization (IEA, 2017, pp. 234–5; Philibert, 2019, p. 202). This is dependent on the price of electricity in relation to alternative fuels, in particular when overall annual subsidies for fossil fuels amounted globally to over $400 bln in 2018 (IEA, 2019b). Subsidies for electricity access would have to be well targeted to avoid subsidizing better-off large consumers (IEA, 2019a, p. 471). Sometimes increasingly weather-dependent production of electricity fails to meet demand, even when combined with other generation options, and sometimes it exceeds the demand, necessitating different levels of storage of electricity (see Chapter 5).

Fourth, beyond these direct electrification trends in the energy system as such, in the various industrial sectors, indirect electrification can occur. This term refers to processes where direct electrification is neither possible nor feasible. This means the use of electricity, by means of electrolysis, to produce energy carriers such as chemicals and fuels in gaseous or liquid form: hydrogen or hydrogen-rich fuels and chemicals such as ammonia and methanol that are traditionally produced from fossil fuels. In this way, it is possible to use energy products in other economic sectors, store electricity long-term, or enable long-haul energy transport in chemical format (Philibert, 2019). For example, the iron and steel industries, which account for one-third of global industrial CO2 emissions, can switch from coal burning to the use of hydrogen generated from renewably produced electricity (Karakaya et al., 2018). Hydrogen produced by electrolysis can also be reacted with CO2 captured from thermal power generators, industrial processes such as fuel use or other chemical processes, or from the atmosphere (direct air capture). This yields electrofuels in the form of methane, methanol, or Fischer-Tropsch (FT) hydrocarbons that can be refined to make them compatible with existing fossil fuel infrastructure (Lehtonen et al., 2019). Such conversion processes imply the use of CCUS technologies, which have limitations of their own (see Box 1.1).

Fifth, there are wider, relatively little discussed social dimensions to electrification. In many smart visions with new electricity generation, distribution technologies, and related IT infrastructure (Taşcikaraoğlu and Erdinç, 2019), humans are mostly absent. Sometimes they are somewhat technocratically referred to as users or consumers. Such roles do exist, but since human beings are the performers of the new practices the new solutions enable, we should also think of them as people: citizens or members of the public with a stake in the changes (cf. Labuissière and Nadaï, 2018). In a word, changes in everyday practices are required if households are to offer flexibility services in the same way as industries have traditionally done in some countries. For example, several fundamental social dimensions emerge when home automation technologies use real-time data on electricity consumption (on the loads caused by certain appliances), to adjust electricity consumption in response to the variation in weather-dependent production or to ameliorate peak demand situations (Strengers, 2013, pp. 5–9). Such behavioral aspects are not insignificant since buildings in the residential and business sectors account for over half of global electricity demand (Philibert, 2019). Further electrification is the most important solution for reducing emissions in this sector, followed by the use of renewable sources in heating and improvements in building design and efficiency standards set for home appliances (Wang et al., 2018). Yet such electrification requires full comprehension of the controversies between these policy domains and the related interest groups (see Chapters 3 and 8). In summary, to fully understand residential consumption, the analysis needs to extend to everyday practices, life course practices, and societal structures shaping these (Yamaguchi, 2019).

Sixth, electrification can also advance development. Many studies describe rural electrification projects and programs, and small-scale decentralized off-grid solutions in developing countries (Kirchhoff et al., 2016; Mandelli et al., 2016). A typical argument is that developing countries or some of their more remote regions can in this way leapfrog the historical patterns of energy system development in the industrialized countries where economies of scale have supported the building of fossil fuel–based centralized systems with high upfront costs (Levin and Thomas, 2016). If such electrification projects involve development aid, they risk running into familiar problems of producing ambiguous outcomes and reproducing unequal power relations (Ahlborg, 2018). Energy justice issues are pivotal here. In terms of distributive justice, it matters if everyone within the same jurisdiction is offered similar access to electricity. In terms of procedural justice, the concerns involve transparency and participation in decision-making over solutions, siting, financing, and capacity transfer (Delina, 2018, pp. 155–7).

Seventh, electrification ultimately changes the role of energy resources in international relations as we know it. Resource conflicts typical for unevenly distributed point-source fossil fuels, as seen, for example, in the Middle East and Africa (Colgan, 2013), should not repeat. Yet the literature on the geopolitics of renewables addresses new types of interdependencies where producers of renewable energy technology can become dependent on trade flows of rare earths and minerals used as raw material in the production of the technology (Scholten and Bosman, 2016). So far, these flows go in particular from China to companies in the USA, Europe, and Japan. These flows are combined, for example, with the expected increase in flows of cross-border electricity trade, helping to balance production and consumption across regions and countries. This is necessary as variable, weather-dependent production increases. Such a wider region where production is shared and traded can also support the technical quality of electricity by helping to maintain sufficient levels of inertia in the electric energy grids when they are chiefly supplied by variable production (Aalto and Muth, 2019). Together, such trade flows alter the power relations among major fossil fuel exporters and their traditional customers in North America, Europe, and Asia. Trade in renewable energy technologies and equipment may also involve more traditional protectionism, as seen in the solar protectionism of the USA, the EU, and India, where they impose tariffs on Chinese solar PV technologies as antidumping measures. Overall, however, the emerging agenda of geopolitics of renewables will for various reasons quite likely differ from that of the geopolitics of oil (Øverland, 2019).

We summarize the wide agenda of electrification as follows:

Electrification is a mega-trend whereby less fuel is eventually burned to produce energy, with the connectivity of goods, services and people becoming more reliant on electricity, a larger share of the energy we use taking the form of electricity, industrial processes becoming more dependent on electricity, while many social and economic activities are also infiltrated with electricity, which furthermore has implications for global development in the form of energy access and to the role of resources in international relations and perceptions of (energy) justice.

The mega-trend of electrification means that electricity gradually pervades not only energy systems, but also our lives as human beings from the scale of everyday life to the global level. In other words, electrification is about much more than the end product of electricity itself. Compared to fossil fuels or biomass sources, electricity is a very peculiar type of energy carrier because it can be both readily used and transported over long distances, and also converted into mechanical work with almost 100% efficiency (Goldemberg, 2012, pp. 149–150). Although electricity in this sense is a very convenient material commodity, its extensive use entails challenges. To be sensitive to the multifaceted character of electricity, we treat it as thoroughly material, meaning that while electricity comprises physical flows, we are also interested in the actors and networks that underpin and facilitate these flows and benefit from them (Spaargaren et al., 2006). Because electricity represents network energies (Tagliapietra, 2017, pp. 18–9), concerning several flows within energy ecosystems (Goldthau et al., 2018), electrification has far-reaching implications within energy systems as such and several repercussions beyond them.

In this book we can address only part of this wide agenda, and will concentrate mostly on electrification of the energy system and society in developed countries. In developing countries, by contrast, electrification is often inseparable from issues of energy access, energy justice, and poverty alleviation, and indeed, from many other issues on the Sustainable Development Goals agenda of the United Nations (Delina, 2018; Filho et al., 2020). We will examine mostly direct electrification within the electric energy system and its wider social consequences. While our overall focus in this book will be on various solutions leading to electrification, we have a particular interest in