Electrification Is a Development Strategy

COP31 opens in Antalya on 9 November in a world once again shaped by events beyond the control of most countries. War in the Middle East and disruptions to shipping through Hormuz have triggered a global energy shock, with Brent crude expected to average around USD 96 a barrel in 2026, up from USD 69 in 2025. Against this backdrop, the presidency has made "35 by 35" its flagship goal: raising the share of electricity in global final energy consumption from 23 percent today to 35 percent by 2035.

Most countries do not set the price of oil, gas or green technologies; they pay it. Every oil shock brings imported stagflation: higher energy costs spread through transport, food, production and the rest of the economy, driving inflation up just as growth slows. The bill then lands on public budgets through price subsidies, weaker tax revenues and higher interest rates. When growth remains sluggish for years, the cost of living keeps rising. Economies that have neglected their competitiveness and the security of their value chains create fewer opportunities and stagnate. Each energy shock drains resources that could otherwise go towards development and addressing the problems societies face.

Each energy shock drains resources that could otherwise go towards development and addressing the problems societies face.

Electrification offers a way out, and much more than protection against the next shock. Cheap, abundant power can attract and enable electro-intensive industries and new value chains, while reduced pollution lowers health and environmental costs. Electrification is an industrial and development strategy, not just an energy or climate policy. But cheap renewable power can transform an economy only if it reaches firms and households through electricity tariffs, and if the rules are stable enough for them to replace their fossil machinery.

Affordable, Stable and Sovereign

Sunlight and wind are public goods that can be harnessed locally to generate electricity for decades once the necessary infrastructure is in place. That makes renewable electricity a matter of sovereignty. It is also the cheapest option: more than 90 percent of utility-scale renewable projects commissioned in 2025 produced electricity more cheaply than the cheapest new fossil alternative.

For renewable power to be stable as well as cheap, it needs transmission, storage and flexible demand. With battery storage costs down some 95 percent since 2010, the binding constraints are now grids, rules and capital, rather than technology.

How Electrification Drives Growth and Jobs

Electrification raises growth through three channels. The first is lower fossil fuel imports: every process that switches to domestic renewable electricity cuts the import bill, keeps money at home that would otherwise leave the country and eases the external constraint that so often cuts growth short.

The second is higher capital productivity. Electric technologies do the same work with much less energy: an electric car is around three times more efficient than a combustion one, heat pumps are three to five times more efficient than conventional heating, and in industry, electric motors are several times more efficient than those powered by diesel or natural gas. When cheap electricity reaches users, each machine produces more for the same cost, making the whole economy more efficient. Countries need not invent these technologies; they only need to adopt them.

An economy that relies less on extraction also eases pressure on its natural resources and creates more room for conservation.

The third is higher investment. Because electric capital earns more than fossil capital, it makes economic sense to retire fossil machinery early and replace it, driving a process of creative destruction in the capital stock. Investment also shifts towards electro-intensive activities, from metal refining to green chemistry, which can keep expanding as long as electricity stays cheap. Meanwhile, activities that draw ever more heavily on natural resources face diminishing returns. 

This creates jobs twice over: first, during the transformation, through building grids, installing equipment and retrofitting industry; and then in operation, as more competitive firms expand and hire. Since 2019, electricity-related employment has grown by 4 percent a year, well above the 1.5 percent average for the energy sector and the economy as a whole. An economy that relies less on extraction also eases pressure on its natural resources and creates more room for conservation.

Behind the Meter and in Front of It

Behind the meter, households and firms decide what to install: rooftop solar, batteries, heat pumps, electric motors and vehicles. Pakistan shows how fast this can happen, and what can go wrong without clear rules. With retail tariffs more than doubling in three years, it imported some 22 GW of solar panels in 2024 alone. But its power plants are paid fixed capacity charges, recovered through each kWh sold. As households installed panels, those charges were spread across fewer kWh, raising the bill for those who could not afford solar. Without a framework, distributed solar becomes an exit from the grid for those who can afford it, rather than a transition for everyone.

In front of the meter, the task is to build cheap supply and the grids needed to carry it, then steer demand towards it. Norway shows what happens when both sides are aligned. Around 98 percent of its electricity comes from hydropower and wind, and electric cars were largely exempted from the heavy taxes on petrol and diesel vehicles. As a result, 95.9 percent of new cars sold in 2025 were electric. Clean supply alone was not enough; directing demand towards it made the difference. Today, electricity meets 49 percent of Norway's final energy consumption, the highest share among the countries tracked by Enerdata and more than twice the world average.

Who Pays for the Grid?

Cheap generation does not automatically translate into a cheap bill: network costs, legacy contracts and taxes can absorb the savings from solar and wind. The grid itself must also be redesigned. A fossil grid sends power one way, from a few large plants, while a renewable one must connect remote solar and wind parks and accommodate power flowing back from rooftops. 

That redesign requires major investment, and how it is financed determines whether it raises or lowers the bill. Treated as public infrastructure and financed with cheap, long-term capital, it can lower costs for everyone. A cheap tariff that may be reversed next year changes nothing; a stable one, backed by law and long-term contracts, changes investment decisions.

Credible Rules, Not Subsidies

Chile shows what credible rules can achieve, and that cheap renewable power does not need subsidies. Its transition has been market-led, but the state redesigned the market. Auctions to supply regulated customers were reformed to offer long-term contracts, open the door to new projects and allow solar to compete during daylight hours. A new transmission law created an independent grid operator and introduced public planning of the network. 

With predictable revenues, capital became cheaper, prices fell sharply and private investors did the rest. Between 2015 and 2025, these rules transformed Chile’s power mix: the share of renewables in electricity generation rose from around 40 percent to around 70 percent, driven by solar and wind. For countries whose budgets are already strained by energy shocks, the lesson is that the scarce resource is not public money, but credible rules.

What Antalya Should Deliver

What most countries lack is cheap capital and stable rules.

"35 by 35" will matter only if it comes with the means to remove these barriers: measuring electrification on both sides of the meter; providing concessional finance for grids and capital replacement; and reforming tariffs so that falling costs reach users with long-term certainty, without making the poorest pay for others' exit from the grid.

Most countries pay for every oil shock, yet already have the sun, the wind and much of the technical capacity to stop doing so. What they lack is cheap capital and stable rules. That is what Antalya owes them.