Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

The demand for electricity has been soaring around the world, and this increase in demand is expected to continue.

Governments have been passing laws to phase out the use of fossil

fuels and to electrify everything. The goal is to electrify transportation heating, household

appliances like stoves and laundry dryers, and even industrial processes that use a lot

of power like iron, steel, concrete and chemical

production. The growth of working from home, along with new technologies like Generative

AI, have increased the demand for power-hungry data centres. Both Europe and the United States

are heavily incentivising on-suring the production of semiconductors,

the US with its Chips Act, to build chip fabs which once again require a lot of power to run.

Today, 60% of electricity in the United States comes from burning fossil fuels.

And the idea behind a lot of the new legislation is to electrify everything while decarbonising

the supply of electricity, thus decarbonising the economy.

Remember, electricity is only a portion of overall energy usage.

Fossil fuels provide over 80% of global power today.

The proposed change involves a huge increase in the amount of electricity that we use.

Solomon Goldstein-Rose's TED talk argues that the current energy policies, if achieved, would replace

today's power generation entirely with clean energy by 2050.

He argues though that this would not be nearly enough.

We instead will need five times that amount of power to charge electric vehicles, heat homes and electrify various

industrial processes if we take growth in demand into account. He points out that today over

700 million people don't have access to electricity and billions more have unreliable access

...