This edition of the Global Energy and Climate Outlook (GECO) analyses the role of electrification in global transition pathways to a low Greenhouse Gas (GHG) emissions economy. Electricity is found to be an increasingly important energy carrier in final energy consumption already in the absence of stronger climate policies than those currently in place (Reference scenario), while enhanced electrification of final energy demand is a crucial element of the 2°C temperature change scenario, paving the way to climate neutrality. The 2°C target could be achieved by simultaneously transforming various elements of the energy system: shifting final energy demand from mainly fossil fuels towards electricity and low-carbon synthetic fuels mainly derived from electricity; decarbonising power generation; increasing energy efficiency in end-uses, which is favoured by further electrification; and mobilising novel options to better accommodate high shares of intermittent renewable electricity sources, such as demand-side load management and power storage. This report further shows that the 2°C target is technically possible at relatively low cost for the overall economy (global GDP reduction below 1% across all sensitivities compared to Reference in 2050). This would also bring along co-benefits for air quality. In order to explore the role that electrification can play as an emissions mitigation option, a number of sensitivity variants on key parameters impacting the energy system - energy prices, cost of technologies, non-economic drivers related to behaviour and policy - are conducted. The role of electricity is examined by large sector (industry, transport, buildings, power generation), with a particular regional focus on the EU and China and a sectoral focus on road transport electrification.

The present report presents a set of computational modules for assessing the costs and savings of different CO2 emission targets for new light duty vehicles. In particular, these models allow constructing cost curves, identifying cost-optimal CO2 emission reduction distributions over the different powertrains and segments composing a vehicle fleet, and calculating additional manufacturing costs, fuel and energy savings, and total costs or savings resulting from different scenarios. The modules have been developed and employed in support of the impact assessment for the Commission's proposal for post-2020 CO2 targets for light duty vehicles.

As a means of reducing the climate impact of transport as well as local air pollution, electrification of the road vehicle fleet is a much-discussed option. In the past years, many electric vehicle models have been introduced to the EU market. On the basis of the monitoring databases for the implementation of Regulation EC No 443/2009 and Regulation EU No 510/2011 we have analysed EV deployment in the EU in the past five years. We find that since 2010 the deployment of EV in the EU has gained momentum. The number of models offered as well as the size segment coverage of EV passenger cars has increased significantly from 2010 to 2014. The number of registrations and also the EV share, albeit still small compared to the total vehicle market, has increased steadily in the EU. This trend continued in the first half of 2015. The demand for EV has been fostered by various incentive schemes in different EU member states (MS).^The numbers of EV registrations and market shares in the MS align well with the level of financial support for EV buyers. This seems to indicate that policies remain to be needed in order to overcome market barriers for the EV deployment at this moment in time. When comparing EV deployment in Europe to other regions of the world, we find that EV market shares in Europe are more or less on par with those in the US and Japan. From an industrial policy perspective, it is encouraging that the share of EV manufactured in the EU has increased from roughly 30% in 2011 to approximately 65% in 2014. As an overall conclusion we can state that indeed the EU seems to currently witness a transition from testing and experimenting with EV towards full scale EV commercialisation. Nevertheless, the beginning market deployment is still dependent on support policies and vulnerable to changes in support.^For the coming years it will be important to accompany the EV market deployment with carefully designed policy measures that should gradually be phased out when EV become a mainstream option.