Key takeaways:
- A new lens on the transition: Ember rejects the polarized fossil vs. net-zero debate and instead frames the energy shift as building a fundamentally superior system centered on electricity — driven by efficiency, affordability, and independence.
- Efficiency that changes everything: our current combustion-based systems waste two-thirds of their energy. “Electrotech” technologies like EVs, heat pumps, and renewables are 2–4x more efficient, unlocking trillions in annual energy savings.
- Economics of abundance: Renewable technologies get cheaper the more we build them, while fossil fuels grow costlier as resources deplete. The result: a structural divergence where manufactured energy outcompetes extracted energy.
- The race to independence: 75% of the world population is a net importer of fossil fuels., “Electrotech” enables nations to achieve great energy independence. Cutting fossil import bills by up to 70% and saving $1.3 trillion globally, shifting power from resource owners to technology leaders.
- The electrification ceiling in high and rising: The pace of progress keeps defying expectations. Renewables, EVs, and electrified heating are scaling faster than anyone ever predicted. The first 75% of the global energy system is on track to electrify rapidly; the real question now is how fast we can innovate to tackle the final 25%.
Our friends at Ember, a global energy think tank that also advises us at Carbon Equity, recently released their latest annual presentation titled “The Electrotech Revolution.” In it, they lay out a powerful new framework for understanding the energy transition: one grounded not in ideology but in physics, economics and geopolitics. The 100+ slide deck ispacked with data and insights that reveal how electricity-centric technologies are reshaping the global energy system faster than most realize.
This article breaks down some of our favourite slides from Ember's work.
If you'd like to go deeper, you can also rewatch the webinar recording featuring Ember's Daan Walter (co-author of the report) alongside Hein Ploegmakers (Gilde Climate) and Helmer Schukken (Rubio Impact Ventures), who explore the investment opportunities emerging from this transformation.
A shift in perspective
Today’s energy debate can sometimes feel stale, stuck between “fossil gradualists,” who insist oil, gas, and coal remain essential and downplay clean energy progress, and “net-zero puritans,” who see the system purely as a carbon problem demanding strict government action. But neither perspective can truly account for the scale or speed of the energy transition that is happening.
Ember’s analysis proposes a third way, one that frames the transition as simply building a fundamentally better and more efficient energy system, organized around electricity. It shifts away from an exclusively climate-focused narrative toward a more practical framework based on system efficiency, economics, and geopolitics.
Of course, tackling climate change remains the key motivation for me and the Carbon Equity team, but this perspective rewires the conversation entirely. We’re moving from thinking about decarbonization as a political choice with limited upside, to positioning solving climate change as a “byproduct” of an energy transition that is driven by economic and geopolitical forces, is already happening at speed, and where dragging our feet on these technologies will harm our future prosperity.
What is electrotech?
Before we dive in, let’s clarify what we mean by “electrotech.” Ember defines it as the convergence of 3 electricity-centric technology clusters reshaping how we produce, transport and store, and use electrons: it covers a wide range of technologies including solar and wind power; intelligent connectivity through battery storage and digital systems; and electrified consumption via electric vehicles and heat pumps.
It’s this convergence of our ability to effectively produce, use, and transport sustainable electricity that has flipped the script in terms of which energy system is the cheapest and most efficient, and hence which one is winning. Indeed, Electrotech costs have been falling for decades: solar, wind, and batteries have gotten ~20% cheaper every time global capacity doubled. After decades on this curve, they’re now so cheap that they beat fossil fuels on price in most parts of the world.
The fundamentals driving change
Behind all these curves, Ember names three fundamental forces at work: physics, economics, and geopolitics. At risk of pointing out the obvious: none of these are about moral imperatives or policy mandates; they’re hard realities that make electrotech the obvious choice. You don’t need to care about polar bears or feel guilty about your carbon footprint to see why Electrotech wins. The physics of efficiency, the economics of falling costs, and the geopolitics of energy independence all create their own compelling logic.
The physics: efficiency that changes everything
The electrotech perspective highlights the absurdity of combustion-based energy systems, which waste two-thirds of their input energy - worth $4.6 trillion. Every year. Fossil fuels are excellent at one thing: producing heat. But converting heat to electricity or movement is where we waste enormous amounts of energy.
Electrotech bypasses these thermal conversion losses and delivers huge efficiency gains: wind & solar are 2-3x as efficient as gas power plants, EVs are 2-4x more efficient than internal combustion engines, and a heat pump is 3-4x more efficient than a gas boiler. In short, renewables and electrification unlock a big leap in energy efficiency across the whole economy.
The economics: scale vs. scarcity
The financial mathematics are equally striking, following a clear pattern: manufactured technologies become more affordable through learning curves as we perfect designs and production with each unit made. We’ve optimized fossil fuel extraction for 200+ years. But now the costs stay high because we’re fighting geology not manufacturing inefficiency. We’ve only gotten serious about renewable manufacturing in the past 20 years, meaning there’s enormous cost reduction potential still untapped.
The cost structures are also fundamentally different: renewables are a CAPEX game (pay upfront for the panel/turbine) while fossil fuels are an OPEX game (buy fuel every day, forever). Manufacturing costs fall predictably with scale, but extraction costs rise as easy deposits run out and we’re forced to drill deeper in harsher conditions. This creates cost trajectory divergence. The intersection point isn’t theoretical anymore. It’s the current reality across multiple markets. Fossil fuel prices are volatile, but there is no learning curve that creates a sustained fall in cost - only the relentless march toward scarcity.
The geopolitics: the race to independence
Energy independence has become a national security priority for many countries in 2025. Relying on expensive imported fossil fuels makes countries vulnerable to global price swings. This is more than a short-term problem. It puts jobs, industry and long-term competitiveness at risk.
In today’s system, fossil fuel import dependency is widespread and expensive: 75% of the world population is a net importer of fossil fuels, and over a quarter of the world spends over 5% of its GDP on annual fossil fuel imports.
The good news is: with just a few electrotech technologies (like wind and solar, EVs, and heat pumps), we could already reduce the global net spending on imports by 70%, saving importers $1.3 trillion globally each year.
Electrotech offers a two-pronged security strategy. First, because virtually every nation could achieve energy self-sufficiency through local renewable resources. Second, by electrifying end-use sectors like transport and heating to use domestic electricity instead of fossil fuels. While electrotech doesn’t lead to full independence if a country is still importing the technologies, Electrotech infrastructure, once installed, operates independently for decades without exposure to international price volatility. This transition also further shifts power from resource-rich nations to technology leaders and manufacturing hubs.
We're only getting started
The technological progress to date has surpassed what almost any expert predicted, including the rapid price decreases, the explosive growth of renewables, and EVs becoming mainstream. But it’s not just about cost or quality anymore: it’s about how the ceiling of what we thought was possible keeps rising.
25 years ago, we thought renewables might power 25% of the global economy, and just 7 years ago, when I worked at McKinsey, experts didn’t believe we could electrify residential heating or long-haul trucking. Today we can. At equal cost to fossil fuels.
These fundamental drivers (physics, economics, and geopolitics) are already driving 75% of the energy transition. Once again, the question isn’t whether the electrotech revolution will happen - it’s: how quickly will the first 75% of the energy system electrify? And, when will we develop the right technology with which the remaining 25% will follow?
This framework perfectly captures what we’ve been seeing across our investment landscape at Carbon Equity. We’ve been backing managers who understand these fundamental shifts, but no one has spelled it out better than the Ember team, and it crystallizes why this moment feels so compelling. Of course, this transformation won’t be seamless. Entrenched interests will fight to preserve the status quo, and there will be bumps along the way. But the fundamentals don’t lie. We’re not just witnessing the end of one system, but the birth of something fundamentally superior. The fact that this technology happens to be exactly what we need for our climate goals?
That’s just our luck.
