Electrification for humans

People sometimes talk about ‘carbon tunnel vision’ – that is, the single-minded pursuit of emission reductions at the sake of everything else. 

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But this is the wrong way to think about electrification.

It isn’t only about emissions (even though preventing the world from dangerous overheating is quite the co-benefit).

It isn’t only about the tech or the kit: the rooftop solar panels, the batteries, the electrified appliances and vehicles. These are just the means to an end.

Electrification is about people and it is a fundamentally better way to power our lives and livelihoods.

By comparison to fossil fuel energy, renewable energy is cheaper, cleaner, more efficient, more abundant and more resilient over the long run. Consequently, the electrification of everything is set to enhance human wellbeing in various ways, often with immediate benefits.

Rather than tunnel vision, we like to look at electrification with panoptic vision.

In this piece, we show that electrification means:

• Cheaper energy, cheaper living.
• Cleaner energy, healthier people.
• More ownership, more mana.
• More distribution, more resilience.

So let’s get into it!

Cheaper energy, cheaper living

Rewiring Aotearoa recently released a report, Electric Homes, which showed that, on average, electric homes can already deliver the cheapest energy available to ordinary New Zealanders. [1]

Most Kiwi homes still rely on a variety of fossil fuel machines, such as gas or LPG appliances and petrol vehicles. But by electrifying everything – that is, switching to electric appliances and vehicles powered by a combination of rooftop solar, battery storage and grid electricity – these homes could save over $1,000 per year (at 5% finance). If the cost of debt for electrification is concessionary (e.g. at 1% finance), the cost savings could be over $4,000 per year. From a cashflow perspective, households are immediately better off, significantly easing the energy component of their living costs. 

Rooftop solar and batteries are key to maximising the benefits. On average, we estimate that rooftop solar can deliver electricity at about 6c/kWh (or 11.5c/kWh at 5% finance), compared to the 34c/kWh (on average) from the grid. Once you’re generating electricity at that price, it makes economic sense to electrify everything, especially your vehicle which is the highest energy consumption cost for most households. Additionally, home batteries and EV batteries will increasingly play a role in household energy storage, keeping the lights on when the sun isn’t shining [2].

These findings are not unique to Aoteara New Zealand. Similar findings were made by Rewiring America [3] and Rewiring Australia [4], and others reached the same conclusion in Europe [5].

Technology is the key, specifically the way that costs decline as innovation accelerates [6]. In 2010, electricity from solar PV was 710% more expensive than the cheapest fossil fuel-fired option, but by 2022 it was 29% less expensive than the same benchmark [7]. Energy modellers predict that solar energy will soon provide the cheapest electricity in all the world’s regions, an irreversible tipping point which ensures the future dominance of solar in global electricity markets [8]. Other technologies, like wind and batteries [9], are on similar trajectories of declining costs and rising capacity.

Consequently, a comprehensive energy transition can save all future people significant costs on energy and, therefore, reduced costs of living. Indeed, recent modelling shows that the sooner we move off fossil fuels, the more we save [10]. This is simply because renewable energy systems produce much cheaper electricity into perpetuity – at only a marginally greater upfront cost [11]. Thus, a fast transition to renewables will result in US$5–$15 trillion of cost savings globally by 2050. And this isn’t even counting the avoided costs of climate change, which are expected to amount to tens or hundreds of trillions of global loss and damages by later this century.

This overturns the notion that the transition to renewable energy is a cost to bear, a sacrifice we must make for environmental reasons [12]. These old assumptions about renewable energy no longer hold, even though they still influence decision making from the household, to the boardroom, to the Beehive. But the evidence is stronger than ever that, at both the household and global level, the electrification of (nearly) everything [13] is a one-way ticket to a cheaper energy system that can benefit all future people.

Cleaner energy, healthier people

Fossil fuels need to be combusted or burned to create useful energy. This releases various pollutants – nitrogen oxide, carbon monoxide, sulphur dioxide, particulate matter, and unburned hydrocarbons – which have direct effects on human health [15]. Our tamariki, including unborn children, are especially vulnerable [16].

A major study in New Zealand found that air pollution was responsible for approximately 3,300 premature deaths in a single year [17]. It was also responsible for more than 13,100 hospital admissions for respiratory and cardiac illnesses, and over 13,200 cases of childhood asthma. In terms of economic impacts, the combined costs of air pollution in New Zealand were estimated at $15.6 billion per year [18]. 

Addressing air pollution would remove a huge weight from the wellbeing of New Zealanders, a burden that we currently take for granted. The electrification of road transport would make a major contribution. About two-thirds of premature deaths from air pollution can be attributed to nitrogen dioxide (NO₂) emissions from motor vehicles. We can eradicate this with technologies that exist today, including electric vehicles (EVs) for private use, and the electrification of buses, trains and heavy transport like trucks. Uptake of e-bikes and e-scooters create further opportunities to improve human health and happiness, as well as make short-distance travel less costly, less congested, and much more enjoyable [19, 20].

And it isn’t only the air pollution in our neighbourhoods, but also our homes. Fossil gas for heating and cooking is a major source of indoor pollution [21]. Indeed, a recent review of scientific evidence found that the air quality in many homes is worse than what is allowed by outdoor air quality standards [22]. A Sunday roast in a gas oven can elevate indoor NO₂ levels to 296 parts per billion, which is nearly three times higher than what is permitted outdoors by New Zealand’s National Environmental Standards for Air Quality  [23]. 

This has serious health implications  [24], but it is easy to solve. Induction stove tops are efficient, effective and readily available.

To be sure, there is a romance in gas cooking, a desire to unleash our inner Anthony Bourdain. The fossil industry plays on this infatuation [25], which gives fossil gas an oversized influence on decision making [26]. Gas may play a role in some sectors in the future, but for everything else, we no longer need to import pollution directly into our homes for cooking and heating. Electrification is cleaner and healthier. 

More ownership, more mana 

A key trend in energy innovation is the emergence of more modular, smaller scale assets. On the supply side, this includes rooftop solar, home batteries, and other technologies like micro-wind turbines and micro-hydropower systems. Often these are classified – somewhat blandly – as consumer-owned energy assets. 

Another way of thinking of it is people-sized energy. People-sized energy assets are often small enough to wrap your arms around, and to carry on household balance sheets. They enable people to produce and store their own electricity at the cost of the asset and its upkeep. And this means that they loosen people’s dependency on both volatile global markets for fossil fuels and large public or private utilities for electricity. It means that people will be able to meet some - or sometimes all - of their energy needs on their own terms. This can be liberating and empowering: it strengthens peoples’ independence, autonomy and dignity.

Consumer isn’t quite the right word for this. Neither is prosumer – although this term at least captures the potential of households to produce their own energy, not only consume energy sold by others. 

At Rewiring Aotearoa, we like to think of empowered people who have the means to power their own lives and livelihoods. We also like to think of energy freedom, of energy systems that promote independence and self-reliance, that free people from the constraints of legacy energy systems and the whims of other decision makers [27].

Mana motuhake is a Māori concept for self-determination and empowerment. Every day, whānau across the motu are making dinner table decisions about how to keep their whare warm and dry, their lights on, and their puku full. The ability for whānau to create and store energy, then dictate what energy is used for, is mana enhancing. With ownership, whānau can harness the power of the elements. From the wind that took the first navigators to Aotearoa, or Maui who risked his life to slow down the sun, harnessing the elements has been a way of life for Māori since inception. Māori now want to seize the opportunities in energy innovation, including harnessing the power of the sun, to create real energy sovereignty. 

Of course, not every household has the savings to wear the upfront costs of electrification, nor the access or appetite for debt. This poses a real risk that the energy transition will be uneven and unequal [28]. It could make current inequalities worse if wealthy households electrify first, leaving everyone else exposed to rising emissions prices and a degenerating fossil energy system. This is why inclusive finance and targeted policy will be critical to an equitable transition. Rewiring Aotearoa has much more to say about this in the near future.

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More distribution, greater resilience

When we talk about the energy transition, we usually mean the transition from fossil energy to renewable energy. 

However, there is a second dimension to the energy transition – that is, the transition from centralised to decentralised energy systems. 

New Zealand’s electricity system is well advanced in the transition to renewables [29], but faces significant disruption ahead from the trends toward decentralisation.

Instead of an energy system which relies on a few large generators and a lot of distribution, technological trends are steering New Zealand toward a system with many smaller generators that produce electricity close to where it is used. In the case of rooftop solar, electricity only travels a few metres from the roof to the plug. This poses well-known challenges, especially to balance supply and demand in the grid. However, if we get this right – and organisations like FlexForum are working on it [30]– then New Zealanders will have a much more resilient energy system. 

The reason is that, in a centralised energy system, a disruption to any single asset or transmission line has serious implications for the whole grid. By contrast, in a decentralised system which is made up of distributed energy resources (DERs), the loss of a few units from a localised event will leave many more units untouched, which continue to serve as back-up. Furthermore, because electricity is generated closer to where it is used, the system is less exposed to transmission disruptions.

This is why the United States Army is rolling out renewable generation, combined with energy storage or microgrids, as supplements or alternatives to diesel generators [31]. Other facilities around the world, including hospitals and government buildings, are installing DERs too. These organisations simply cannot afford blackouts, because human lives are at stake.

Climate change heightens the need for energy resilience. Our energy system, especially transmission and distribution infrastructure, will be increasingly exposed to extreme weather events and associated flooding, landslides, and wildfire [32]. Rural and remote communities will be especially vulnerable to disruption.

Recent extreme weather events have reinforced the resilience value of DERs. Following Cyclone Gabrielle, a Taradale pharmacy powered its operations for three days by connecting up to EV batteries, recharged by rooftop solar, until mains electricity was restored [33]. Subsequently, the Ministerial Inquiry into Land Use in Tairāwhiti and Wairoa recommended that the New Zealand Government ‘support the further investigation, and implementation, of self-sufficient electricity supply systems for the small, isolated communities in Tairāwhiti' [34].

All regions should heed these lessons. Rooftop solar, batteries and other DERs can help keep the lights on post-disaster, and protect essential services and businesses. We need to price avoided disruption into the business case for electrification.

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Summing up

The transition to renewable, decentralised energy – if done well – can mitigate many of the injustices that affect human and ecological health and well-being. 

Think about it like this: if someone invented a machine that removes greenhouse gases from the atmosphere at an industrial scale and therefore ‘fixes’ climate change, would electrification still be worth doing?

Our answer is ‘hell yeah!’ because electrifying everything can improve human wellbeing along multiple metrics. This depends on how we roll out the energy transition, and on whether we design energy markets, supply chains and policy mixes to avoid inequity and injustice. But if we get ahead of the curve, we can ensure that everyone enjoys the benefits of electrification, now and into the future.  

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REFERENCES

1) Josh Ellison, Dominic Thorn, Michelle Pawson and Saul Griffith (2024). Electric homes: The energy, economic, and emissions opportunity of electrifying New Zealand’s home and cars. Rewiring Aotearoa.

2) ev.energy (2023). Unlocking barriers to vehicle-to-everything (V2X) energy flexibility.  

3) Joel Rosenberg (2021). Electrify everything in your home: A guide to comfy, healthy, carbon-free living. Rewiring America. 

4)  Saul Griffith, Josh Ellison, Sam Calisch and Dan Cass (2021). Castles & cars: Savings in the suburbs through electrifying everything. Rewiring Australia. 

 5) Goldman Sachs (2023). Electrification may cut European household energy bills in half. Goldman Sachs Intelligence. 

6) Grubb, M., Drummond, P., Mercure, J. F., & Hepburn, C. et al. (2021). The new economics of innovation and transition: evaluating opportunities and risks. The Economics of Energy Innovation and System Transition (EEIST) project. 

 7) IRENA (2023). Renewable Power Generation Costs in 2022. International Renewable Energy Agency (IRENA).

8) Nijsse, F.J.M.M., Mercure, JF., Ameli, N. et al. (2023). The momentum of the solar energy transition. Nature Communications 14, 6542. 

9)  Daan Walter, Kingsmill Bond, Sam Butler-Sloss, Laurens Speelman, Yuki Numata, Will Atkinson (2023). X-Change: Batteries: The Battery Domino Effect. Rocky Mountain Institute (RMI).

10)  Way, R., Ives, M. C., Mealy, P., & Farmer, J. D. (2022). Empirically grounded technology forecasts and the energy transition. Joule, 6(9), 2057–2082.

11)  Way et al. (2022) estimate that a fast transition will cost US$670 billion annually, compared with the ongoing costs of no transition at US$530 billion annually to keep us locked into our fossil-fuelled status quo.

12) The Ministry for the Environment, in its 2015 consultation on New Zealand’s target for the then-forthcoming Paris Agreement, claimed that: ‘the current target of 5 per cent below 1990 levels by 2030 means that in 2027, an average New Zealand household would be around $1,270 per annum worse off in terms of household consumption than if no target were taken. More ambitious targets will have a higher cost to households.’ To be sure, the options to decarbonise then weren’t as economic then as they are now. However, such modelling falsely assumed that the costs of decarbonisation would stay roughly the same over time. As empirically-minded economists have argued (e.g. Farmer and Lafond, 2016), this is inconsistent with historically observable trends in innovation and technology development. In other words, this is not a one-off error, rather a systemic flaw in equilibrium-based approaches to technological change (Sharpe, 2023). Additionally, the economic modelling did not account for the costs of climate change on Kiwi households, nor the economic opportunities and multipliers created by sustainability transitions.

13)  Saul Griffith (2023). Yes, we can (eventually) electrify (almost) everything! Medium. 

14)  This assumes that the cheaper costs of electricity are passed through to consumers, which is far from guaranteed. However, the problem here lies not with the technologies, like solar and wind, which are delivering ever lower levelised costs of electricity (LCOE) (e.g. IRENA, 2023). Rather, the problem lies with the design and regulation of energy markets (e.g. NZIER, 2022). This is a story for another day – but one that Rewiring Aotearoa plans to address.

15)  Environmental Health Intelligence NZ (n.d.). About air quality and health. Environmental Health Indicators.

16)  Frederica Perera (2017). Pollution from fossil-fuel combustion is the leading environmental threat to global pediatric health and equity: Solutions exist. International Journal of Environmental Research and Public Health 15(1): 16.

17)  HAPINZ 3.0 (2022). Health and air pollution in New Zealand 2016: Findings and implications. Report Prepared for the Ministry for the Environment, Ministry of Health, Te Manatū Waka Ministry of Transport & Waka Kotahi NZ Transport Agency.

18)  No price can be placed upon the grief and stress caused by illness and early death. What the HAPINZ (2022) study does do, however, is quantity the loss of life, loss of economic output from sickness, and combined medical costs. See HAPINZ 3.0 (2022).

19)  Hoj T. H., Bramwell J. J., Lister C., Grant E., et al. (2018). Increasing active transportation through e-bike use: Pilot study comparing the health benefits, attitudes, and beliefs surrounding e-bikes and conventional bikes. JMIR Public Health and Surveillance 4(4): e10461.

20)  Anderson C. C., Clarkson D. E., Howie V. A., Withyman C. J., and Vandelanotte C. (2022). Health and well-being benefits of e-bike commuting for inactive, overweight people living in regional Australia. Health Promotion Journal of Australia (HPJA) 33(S1): 349-357.

21)  David Roberts (2020). Gas stoves can generate unsafe levels of indoor air pollution. Vox. 

22)  RMI (2020). Health effects from gas stove pollution. Rocky Mountain Institute (RMI) in partnership with Physicians for Social Responsibility, Mothers Out Front, and Sierra Club.

23)  The Resource Management (National Environmental Standards for Air Quality) Regulations 2004 sets a limit of 200 micrograms of NO₂ per cubic metre expressed as a 1-hour mean, which converts to 102.79 parts per billion (ppb). 

24) American research (Gruenwald et al., 2023) found that only 35% of households use indoor gas stoves for cooking, but this is attributable to 13% of all childhood asthma in the US. Children are more vulnerable because they are more active, their lungs are larger relative to body size, and their respiratory and immune systems are still developing.

25)  Climate Town (2022). It’s time to break up with our gas stoves. YouTube.

26)  Finlay Dunseath (2021). Climate change: Restaurants want to keep gas burners. RNZ. 

27)  Laimon, M., & Yusaf, T. (2024). Towards energy freedom: Exploring sustainable solutions for energy independence and self-sufficiency. Renewable Energy 222: 119948.

28)  National Academies of Sciences, Engineering, and Medicine (2023). Accelerating Decarbonization in the United States: Technology, Policy, and Societal Dimensions. NASEM.

29)  New Zealand cannot rest on its laurels, however. While the share of renewable electricity generation has been above 80% for most of the last decade, the share of renewables in total final energy consumption (TFEC) is only 30% (MBIE, 2023). This reflects the ongoing dependence on liquid fuels for transport, and also industrial uses of fossil fuels for heat and energy.

30)  FlexForum (2023). Flexibility Plan 1.0.: What we need to do and how we can do it. 

31)  IEA (2022). Unlocking the Potential of Distributed Energy Resources: Power system opportunities and best practices. International Energy Agency (IEA).

 32) Lawrence, J., B. Mackey, F. Chiew, M.J. Costello, et al. (2022). Australasia. Climate Change 2022: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (AR6 WG2).

33)  Napier Courier (2023). Electric vehicles kept pharmacy running for days after Cyclone Gabrielle. Napier Courier.

34)  Ministerial Inquiry into Land Use in Tairāwhiti and Wairoa (2023). Outrage to Optimism.‍

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