Electricity is fast becoming the world’s defining energy currency. According to the International Energy Agency’s World Energy Outlook 2025, global electricity demand will rise by roughly 40 percent by 2035, outpacing all other energy growth. Yet this surge—driven by the electrification of transport, heating, and data-intensive technologies—exposes a deeper fault line: the fragility of the material and industrial foundations supporting the transition.
The IEA warns that the security risks once confined to oil and gas are now entrenched in the supply chains of lithium, nickel, cobalt, and rare earth elements. A single country—China—controls refining for 19 of the 20 strategic energy-related minerals, with an average market share near 70 percent. More than half of these minerals are now under some form of export restriction. What began as an efficiency of specialization has turned into a systemic vulnerability. Supply concentration, the IEA notes, has increased since 2020, even as governments pledged diversification.
This new material dependency is colliding with a historic phase of industrial oversupply. Manufacturing capacity for solar photovoltaics could already produce more than twice the volume of panels deployed in 2024; battery cell capacity stands at nearly triple deployment levels. China again dominates this landscape, exporting low-cost modules, cells, and electric vehicles that now represent almost 5 percent of its total goods exports. While this industrial surplus keeps technology prices competitive, it also distorts global trade dynamics. Some advanced economies are tightening tariffs, while emerging markets weigh the opportunity of cheap imports against fears of new dependencies.
At the same time, the structural lag in grid infrastructure threatens to mute the benefits of these abundant clean technologies. Investment in power generation has soared to USD 1 trillion per year, nearly 70 percent above 2015 levels. Yet grid spending remains at only USD 400 billion annually—less than half the pace needed. The bottleneck is evident: renewables are being added faster than they can be connected. The IEA reports rising congestion, curtailment of wind and solar output, and increasing negative pricing in wholesale markets.
This imbalance defines the early contours of the “Age of Electricity.” Electricity now accounts for about 21 percent of global final energy use but powers over 40 percent of the global economy. In economic terms, the world is already electric—but infrastructurally, it remains fossil. The shift exposes governments to a dual security dilemma: dependence on volatile mineral and manufacturing supply chains abroad, and vulnerability of domestic power systems to climate shocks, cyberattacks, and grid delays.
Behind these supply and infrastructure asymmetries lies the overarching emissions paradox. Despite record renewable deployment—540 GW of new solar capacity in 2024 alone—global energy-related CO₂ emissions reached a record 38 gigatonnes that same year. The IEA’s baseline scenarios project a temperature outcome of roughly 2.5°C under stated policies and nearly 3°C under current ones. The agency concedes that a “limited overshoot” pathway to 1.5°C has now slipped beyond reach. Even in its Net Zero by 2050 pathway, global warming peaks around 1.65°C mid-century before gradually receding, relying on large-scale carbon removal technologies not yet proven at scale.
This widening gap between technological progress and climate reality underscores a misalignment of priorities. Energy policy remains reactive—focused on volume, not velocity; on production, not system integration. Governments racing to onshore clean-tech manufacturing often neglect the long-term coordination of grids, storage, and demand flexibility that define true resilience. Similarly, markets celebrating cheap solar panels rarely account for the geopolitical fragility of the mineral ecosystems that make them possible.
The IEA’s numbers point to an emerging truth: the energy transition is not constrained by technology but by coherence. Overcapacity in renewables, underinvestment in infrastructure, and mineral concentration all feed a feedback loop that undermines both energy security and climate credibility. Electricity may indeed be the backbone of the new economy, but without systemic diversification—of supply chains, grids, and governance—it risks becoming its most fragile artery.
