Electrification at scale: from business case to system change

How WBCSD helps unlock the conditions to accelerate electrification

In summary

This article explores the business case for electrification and how the World Business Council for Sustainable Development (WBCSD) supports companies in advancing it.

Electricity has become a key cost and risk factor in low-carbon industrial transformation, often outweighing technology in determining commercial viability. As electricity’s share of final energy consumption is projected to rise to nearly 50% by mid-century, electricity price exposure is now a central business risk. Leading companies are responding by securing long-term power agreements, managing demand, and investing in flexibility. In doing so, they not only lock in cost advantages, but also protect their operating costs from price volatility.

Data show that, while demand for electrification is growing across sectors, grid access remains a bottleneck. Companies that optimize their energy use and become active assets in the system – for example, by deploying on-site generation and storage – can secure grid access ahead of competitors. As energy infrastructure is among the assets most vulnerable to climate change, they also build resilience of the system.

Electrification, therefore, is more than a decarbonization pathway, is a core driver of competitiveness, resilience, and long-term business value. However, electrification at scale depends on systemic action across value chains, from utilities to regulators. By connecting supply and demand sectors across value chains with policymakers and partners, WBCSD’s Electrification and Grid Readiness initiative is ready to accelerate the conditions for this system-level transformation.

Electricity is a strategic variable

The cost of electricity determines a large part of the economics of most low-carbon industrial processes¹

In green hydrogen production, electricity accounts for 50 to 70% of operating costs. The price of electricity, not of the technology, determines whether a project is economically viable or stranded. In direct-reduced iron steelmaking, for example, power prices set the competitive boundary between facilities that can operate profitably and those that cannot. In electric freight, grid tariffs, time-of-use pricing and corridor charging availability set the total cost of ownership (TCO) calculation that drives charged fleet conversion decisions across European logistics. In low-carbon cement, clean ammonia, and electrified industrial heat, capital expenditure is fixed and upfront, while electricity costs are recurring and compounding, making long-run power prices the primary determinant of economic viability.

The IEA projects electricity’s share of final energy consumption will rise from 21% today to nearly 50% by mid-century² under its Net Zero Emissions scenario. This trajectory makes electricity price exposure a central business risk across almost every industrial sector. Companies responding to this risk are locking in long-term power purchase agreements at current price levels, building virtual power plants that aggregate flexibility across their assets, and managing their demand profile actively. These measures protect operating costs against price volatility for a decade or more and create a structural cost edge over competitors that remain exposed to spot market pricing.

Today, a company that treats electrification solely as a procurement and infrastructure decision (i.e., buying equipment, connecting to the grid, and consuming electricity) carries the same exposure that made fossil fuel dependence so costly over the past decade.

The transition has momentum. Grid access is the binding constraint.

Global energy transition investment reached $2.3 trillion in 2025³, nearly triple the 2020 figure. Clean energy supply investment outpaced fossil fuel supply investmentfor the second consecutive year. At the same time, energy storage costs have fallen below $100 per kilowatt-hour⁴, a threshold that mainstream forecasts projected as a post-2030 milestone. On the demand side, electric vehicles (EVs) account for around 30% of new car sales worldwide⁵, reflecting a TCO calculation that tends to close. The same momentum is emerging in freight.

Grid infrastructure, however, has not kept pace with this demand growth. Connection queues in European transmission systems exceed 1,700 gigawatts across 16 countries – 722 GW in the UK and 348 GW in Italy alone⁶. This is the most immediate operational constraint companies seeking to electrify face today.

Companies that manage their electricity demand actively, invest in on-site generation and storage, develop collocated assets, and place charging infrastructure strategically are securing grid access ahead of competitors. Grid operators should increasingly reward these behaviors, with flexible connection agreements (FCAs) that give faster access to companies that can prove they can control their consumption. Companies that can make the case for any of those strategies are building a competitive advantage that grows as connection queues are lengthening and grid reinforcement timelines are extending.

Resilience is the other name for competitiveness

Physical impacts of climate change further strengthen the business case for electrification. Damages from climate-related events cost the global economy at least $1.4 trillion in 2023, almost ten times more than in 2000⁷. Cumulative climate-related disaster spending since 2000 has exceeded $18.5 trillion globally⁸. Energy infrastructure is among the assets most vulnerable to climate change, creating compounding risk as that infrastructure comes under increasing stress. Continued dependence on globalized fossil fuel supply chains amplifies both sides of that exposure: physical disruption costs rising with each degree of warming, and carbon costs rising with each tonne of CO2 emitted to produce them.

Electrification structurally changes this risk profile. For example, a manufacturing facility with on-site solar generation, battery storage, and smart demand management has greater control over its energy security than a facility dependent on external gas supply. Likewise, a commercial building with heat pumps, demand response systems, and EV charging can reduce tenants’ exposure to gas price volatility, which remains a risk source in many corporate energy budgets.

Energy security (i.e., the ability to control the cost base and maintain operational continuity across market conditions) is an increasingly material competitive differentiator, particularly for energy-intensive sectors where power costs drive margin. This is where electrification delivers value beyond decarbonization, and why it warrants equal weight in the investment case.

Still, the order of action matters: the strongest early movers optimize before they electrify. They reduce energy load, improve efficiency, and redesign their energy profiles before adding electrified capacity. Facilities following this sequence arrive at electrification with lower capital requirements, smaller grid connection requests, and stronger flexibility assets, a stronger position over those that add load to an unreformed baseline.

How value chains unlock electrification at scale

Companies electrifying faster are those that engage their broader value chain early. Electrification is not a decision that a single company can make and execute in isolation. Every major electrification investment creates dependencies on actors whose decisions determine whether that investment performs as planned.

As an example, electrifying a logistics fleet requires depot owners to assess grid capacity, grid operators to plan for new demand schedules, insurers to develop products for new asset risk profiles, and authorities to implement the regulatory signals that make the economics work. Each actor’s decision creates the conditions for the next. Shared learning across the value chain helps accelerate the system as a whole.

The same pattern holds across different sectors. Industrial buyers committing to low-carbon steel procurement need their suppliers to access competitive green electricity. Property developers building net-zero commercial assets need grid operators to have capacity for electrified heat and EV charging, a process involving owners, tenants, utilities, and financiers before a single heat pump is installed. Logistics companies electrifying last-mile fleets need their real estate partners to have integrated charging infrastructure into warehouses and urban distribution centers from the outset.

These interdependencies are why ecosystems matter. Electrification is a chain reaction and companies that have already built relationships with utilities, grid operators, regulators, and supply chain partners hold a positional advantage that takes years to develop and is hard to replicate. In practice, this plays out through:

Industrial clusters where businesses invest in shared grid and low-carbon infrastructure and create the demand density and shared cost structures that make system-level investment viable.
Logistics corridors where charging demand and grid planning develop together, allowing infrastructure to be sized and placed for collective use rather than individual projects.
Territories where regulatory signals and business investment move in the same direction, creating the demand certainty that unlocks private capital.

These are the environments where individual company decisions become systemic transformation, generating investable projects at the pace the economics now justify.

WBCSD: where systemic action happens at scale

Systemic transformation requires actors with different investment timelines, risk tolerances, and regulatory remits to act together. A building owner, a logistics operator, an industrial manufacturer, a grid technology company, and a local authority each hold a piece of the system. The system only moves when they do collectively.

On this basis, WBCSD is establishing an Electrification and Grid Readiness initiative to support and bring together companies willing to electrify faster and with greater confidence. This takes the form of supply-demand dialogues and in-person roundtables bringing together actors across energy, transport and mobility, buildings, and industry – including data centers. It extends to dedicated convenings with policymakers and regulators at key moments on the global agenda, from the Global Energy Transition and Electrification Summit at London Climate Action Week to the cross-sector and policy gathering at Climate Week NYC in September.

The WBCSD initiative will encompass six areas – a deliberate span, as electrification is a systemic matter and as a structure addressing only one lever produces recommendations that stall where the next actor’s remit begins. These are:

electricity market design and grid flexibility,
demand-side electrification,
procurement and clean energy accounting,
policy and regulatory advocacy,
local and regional implementation,
digitalization.

A primary focus of this work is to drive transformation into ecosystems and across value chains where public and private investment are starting to move in the same direction.

Differently from existing research agendas or advocacy platforms, WBCSD helps companies to structure their engagement around concrete, cross-sector actions. The objective is to move infrastructure investment decisions, procurement commitments, and regulatory frameworks in parallel, at the pace the transition requires.

Through its global membership and partnerships with the key global actors (IEA, IRENA, and UNECE just to name a few), WBCSD connects companies with utilities, grid operators, policymakers, regulators, and financiers. It provides the global platform and cross-sector convening power that allow companies to move faster than any single organization could alone.

In conclusion

The business case for early electrification goes beyond ESG ratings and regulatory risk management. The structural advantages of early action on electrification accumulate over time and are difficult to recover for later movers.

Companies locking in long-term power purchase agreements today are securing a cost edge for a decade or more. Those investing in demand flexibility are establishing the grid relationships and revenue streams that will determine their cost position as electricity markets mature. Operators that have worked through the complexity of electrification are building operational expertise that compounds with scale and time.

Economics reinforce this logic. Cost reductions in solar, wind, batteries, and power electronics have consistently exceeded mainstream forecasts. Electricity gets cheaper as more of it is deployed, and the transition has its own momentum, independent of any single policy signal or political cycle.

The pace at which a company builds electricity capabilities, cost structures, grid relationships, and value chain positioning will determine its competitive standing when the transformation reaches full scale. The window for structural gain is open now.

WBCSD’s Electrification and Grid Readiness initiative will accelerate the conditions for electrification at scale. To find out more or get involved contact Celine Le Goazigo, Energy Lead at WBCSD (legoazigo@wbcsd.org).