Over the past decades, the power we use to make, move, and heat has shifted from fossil fuels to electricity – resulting in electrification becoming the backbone of the energy transition.

This was made possible through the rapid deployment of clean technologies like solar, hydro, wind, batteries, and electric vehicles, alongside the transformation of the grid. These advances have scaled at a pace faster than anyone predicted – with 40% of global electricity powered from low carbon sources in 2024 alone.

That was the first wave. And it has changed everything.

But to reach net zero, protect our economies, and strengthen global resilience, we now need to tackle the next phase: Electrification 2.0. This time, it’s on an industrial scale.

Decades of growth

Since the first multi-megawatt wind turbine in Denmark in 1978, global wind capacity has soared from 25 MW in 1981 to 1,136 GW cumulative capacity in 2024. Wind has now become the world’s fastest-growing renewable energy source, contributing to 8.1% of global electricity.

Solar has also surged in recent years, with global capacity growing nearly tenfold since 2014, now generating over 6.9% of the world’s electricity. Despite China dominating over 80% of the PV value chain, demand in Europe continues to soar, with production on track to reach as much as 816 GW by 2030.

While wind and solar have led in expansion, hydropower has become the largest contributor to renewable energy. Tapping into this, the EU has set targets to produce 40 GW by 2050, enough to power around 58 million homes.

Over the past 30 years, there have also been huge advances in energy storage, in particular batteries. Costs have declined 99%, while growth has increased 33% – with EV sales reaching 17 million last year. 

Every metric, from deployment to cost, performance, and adoption, points to a surge in growth. But to meet our net-zero targets, we must hit key milestones, in particular achieving a net-zero electricity sector by 2040.

Clean electricity: what it will take to transform industry 

While progress is accelerating in some areas, the spotlight now needs to shift to the infrastructure that moves and builds the world. Heavy industries. Aviation. Shipping. Construction. These industries represent the foundation of modern life. They are also the largest sources of global emissions and the most challenging to decarbonise.

In many of these sectors, electrification as a stand-alone solution isn’t technically or economically viable. However, it does provide the foundation to produce alternative power sources which rely on the availability of reliable, clean, and low carbon electricity. For instance, clean fuels like low carbon hydrogen – and its derivatives such as ammonia and methanol – will be essential for decarbonising hard-to-abate industries.

Momentum is building, with many policy agendas now turning their focus to industry, where electrification and clean fuels must scale together. In February, the European Commission published the Clean Industrial Deal, outlining concrete actions which support energy-intensive industries to decarbonize, ensuring it is also a driver of growth. Just a few months later, in May, China’s State Council unveiled an Action Plan to accelerate decarbonisation across key sectors including power, metals, refining, and cement. Meanwhile, under the Trump Administration, the U.S. Department of Energy rolled back 47 regulations as part of the government’s cost-cutting push – a clear setback to clean energy progress.

While government strategies diverge, innovators are developing breakthrough solutions. InnoEnergy’s portfolio company, HeatVentors, is creating thermal battery systems to store electricity as heat; ecop is commercialising high-temperature heat pumps for industrial use above 200°C; and Heliup is building ultra-light solar panels for industrial, commercial, and public buildings.

InnoEnergy’s industrial ventures are also driving large-scale decarbonisation. FertigHy, is leading the transformation of Europe’s fertiliser industry, while GravitHy is accelerating the decarbonisation of the steel sector – accounting for around 8% of global CO₂ emissions. Holosolis is establishing large-scale PV cell and module production facilities, and new projects like Sunwafe will advance sustainable domestic ingot and wafer production.

While progress is being made with European clean tech innovation, China continues to lead the race across many fronts. This includes the electrification of medium and heavy-duty trucks, which are responsible for about 36% of on-the-road greenhouse gas emissions. Beyond roads, China has developed the largest battery-electric container ship and launched the first inter-city electric air taxi demonstration.

Grid and storage: from net zero to energy security

As leading nations work towards industrial decarbonisation, the demand on the grid is set to increase dramatically. The war in Ukraine exposed the dangers of external energy dependence and the blackout in Spain proves the importance of a resilient power system – and this is just the beginning.

By 2050, global electricity demand is expected to double, not just from industry, transport, and buildings, but also from AI and data centres. Global data centre demand is predicted to increase 165% to 122 GW by 2030.

However, answers are emerging and new technologies are playing a crucial role in unlocking robust grid and storage solutions, which will enhance sustainability and security.

Among these is Skeleton, whose graphene-based supercapacitors offer ultra-fast, high-power solutions for grid stability. Other InnoEnergy portfolio companies making headway include Enline Energy Solutions, which are improving overall grid efficiency; Hepta and Spottitt which support grid maintenance and prevention, and suena energy, who are leading the way in energy traceability and flexibility.

Beyond this, SeaQurrent® and CorPower Ocean are harnessing ocean energy for off-grid power solutions. Meanwhile, Bamboo Energy optimises the integration of renewables and enhances grid management; and Flexidao enables real-time verification of renewable energy use.

Such innovations are upgrading our grids while enhancing the overall security and resilience of our energy systems.

What it takes to win

If electrified industrial sectors are what get powered; capable infrastructure is how it happens. Together, they form Electrification 2.0. Yet, rising geopolitical tensions are pushing nations to pursue energy and industrial strategies in isolation. This must not become a zero-sum race. The clean energy transition is our greatest opportunity to co-invest, co-build, and co-lead. Encouraging collaboration will unlock the full potential of electrification and the complementary solutions needed to power energy-intensive industries.

To succeed, we need:

• Novel funding mechanisms for First-of-a-kind (FOAK) plants and technologies
• Strategic partnerships between established industry and new frontrunners to de-risk and scale faster
• Securing off-take, through regulation to shape early demand and secure long-term investment decisions
• Smarter, faster permitting and infrastructure planning to cut delays
• Cross-border collaboration to share industrial know-how and best practices to industrialise clean technologies faster

This isn’t just about climate. It’s about competitiveness, sovereignty, and shared security. For the planet. For profit. For people. For real.

Let’s make Electrification 2.0 a collective leap forward.

Connect with the industrial leaders, clean tech startups, and investors making Electrification 2.0 happen. Join us at The Business Booster.