Electrification of operations: what changes in energy decisions

Electrification of different energy uses has been gaining ground across various sectors of the economy. Vehicles, heating systems, industrial equipment, and other applications that traditionally use fossil fuels can, under certain conditions, switch to electricity.

This movement is part of a broader transformation in the energy system. According to the International Energy Agency (IEA), global electricity demand is expected to grow by an average of 3.6% per year between 2026 and 2030. This rate is significantly higher than the average observed in the previous decade. Industry, electric vehicles, HVAC/space conditioning, heat pumps, and data centers are among the drivers contributing to this growth.

For companies, however, electrifying operations can alter the energy consumption profile, peak power demand, required infrastructure, operating costs, and even the environmental outcomes of an activity.

Therefore, replacing a fuel with electricity requires considering the functioning of the operation as a whole.

Electrify what?

The first question is precisely this. Not every energy use presents the same conditions for electrification.

In industry, for example, a major share of energy is used for heat generation. The required temperature, process characteristics, and how that heat is utilized all make a difference when selecting technology.

The IEA points out that, in less energy-intensive industries, a relevant portion of heat demand lies in low-temperature ranges of up to approximately 200 °C. In these cases, commercially available technologies, such as heat pumps, can enable the electrification of certain processes. In energy-intensive industries, however, many processes rely on temperatures above 500 °C, presenting distinct technological and economic challenges.

This helps explain why electrification opportunities vary so greatly from one operation to another.

A food processing plant, a chemical manufacturing facility, a mining operation, and a steel plant can utilize electrical energy in vastly different ways. Even within the same company, different process stages may present distinct conditions.

The United States Department of Energy, for instance, in its guide to industrial electrification, brings together technologies such as resistance heating, induction, infrared, microwave, and radio frequency, heat pumps, electric boilers, and electric hot water systems, alongside applications in space conditioning and internal transport. The publication itself highlights that these technologies have different applications, limitations, and integration possibilities.

Therefore, discussing electrification without considering the specific energy end-use can obscure the most critical part of the analysis.

Fuel switching changes how the operation uses energy

When equipment using gas, oil, or another fuel switches to electricity, part of the demand for that fuel ceases to exist. At the same time, electricity demand increases.

Depending on the application, electricity consumption can increase significantly and alter the facility's load profile. This may require evaluating the electrical infrastructure, available capacity, consumption schedules, and how power is contracted.

It is also necessary to observe the efficiency of the new solution. The fact that equipment is electric does not mean, in and of itself, that it will consume less energy or have lower operating costs. The result depends on the technology used, operating conditions, the performance of the equipment being replaced, relative electricity and fuel prices, and how the solution is integrated into the process.

The IEA itself draws attention to these aspects when analyzing the electrification of industrial heat. Some technologies may offer operational advantages, such as greater temperature control and rapid response to load variations, but economic conditions can differ substantially depending on the country, application, and the ratio between electricity and fuel prices.

Thus, an electrification analysis must go beyond a simple side-by-side comparison of two pieces of equipment.

The question is not merely how much the electric equipment costs compared to conventional equipment. It is necessary to evaluate how the shift affects energy consumption, operations, infrastructure, maintenance, availability, and life-cycle costs.

The Brazilian context matters too

In Brazil, this discussion takes place within an electricity matrix with a predominant share of renewable sources.

According to the 2026 Brazilian Energy Balance (Balanço Energético Nacional), domestic electricity supply in 2025 reached 783.3 TWh, while final consumption reached 667.8 TWh. Renewable sources accounted for 86.6% of domestic electricity supply. The industrial sector accounted for 36.1% of final electricity consumption, followed by the residential sector at 28.2%.

These figures help put electrification into perspective. A given fuel switch to electricity can produce different effects in different countries and power systems. The environmental outcome of an electrical solution, for example, is directly linked to how that electricity is generated.

In Brazil, the high share of renewable sources in domestic electricity supply creates unique conditions. This does not mean, however, that all electrification automatically results in emissions reductions or economic advantages. One must consider the application, additional electricity consumption, technology efficiency, and specific operational conditions.

It is also important to note that electricity consumption in Brazilian industry is not growing uniformly.

According to the 2026 Electricity Statistical Yearbook (Anuário Estatístico de Energia Elétrica), industry consumed 199,341 GWh in 2025, a 0.7% increase compared to the previous year. Among the 37 sectors monitored by the EPE (Energy Research Office), 22 recorded consumption increases, while others registered declines. Variations were also quite distinct across segments such as mining, machinery and equipment, food and beverages, chemicals, pulp and paper, and metallurgy.

This reinforces a key takeaway: even when a trend is observed at a national scale, decisions remain dependent on the specific characteristics of each operation.

Electrification and energy efficiency must be analyzed together

Another vital precaution is to analyze electrification and energy efficiency in tandem.

Replacing one energy source with another may be an alternative for a given application, but it does not eliminate the need to evaluate whether energy is being used efficiently.

Before replacing a source, it may be necessary to understand thermal losses, operating conditions, process controls, insulation, motors, thermal systems, and other factors that influence consumption.

The IEA emphasizes the importance of efficiency measures and points out electrification opportunities for specific heat uses, particularly in low-temperature industrial processes. Highlighted measures include process optimization, energy management, motor efficiency improvements, insulation, and the electrification of specific heat applications.

This relationship is particularly important because an inefficient operation may remain inefficient after switching energy sources.

Imagine, for example, a process with significant thermal losses. Simply replacing the heat-generating equipment does not necessarily address the root cause of those losses. In certain situations, improving the process prior to electrification can alter the required equipment size, electrical demand, and even the economic feasibility of the transition itself.

The sequence of decisions can, therefore, make all the difference.

A decision that requires more than choosing a technology

Operational electrification is set to gain ground as new technologies become available and electricity meets a larger share of final energy uses. The IEA itself projects that electricity's share in global final consumption will rise from 21% in 2025 to 24% in 2030.

For companies, electrification becomes yet another alternative to consider in energy decision-making. The choice depends on operational characteristics, available technology, infrastructure, involved costs, and expected outcomes.

In this type of decision, several questions are fundamental: What energy use is intended to be modified? Which technology meets the process requirements? What will the electricity consumption look like? Does the existing infrastructure support the new demand? How will operating and investment costs change? Are there impacts on operational continuity or flexibility? How does the shift affect emissions? Are there alternative technologies that offer different results?

The answers to these questions rely on operational data, technical specifications, economic conditions, and corporate objectives. Therefore, electrification must be analyzed within the context of each specific operation. More than selecting a technology, it is essential to understand how the shift alters energy use and what consequences it brings to the business.

As electricity occupies new spaces across industry, buildings, and transport, understanding the effects of this shift becomes increasingly vital for energy management. The decision encompasses operational characteristics, equipment performance, infrastructure capacity, costs, power availability, and emissions.

It is this analysis that allows companies to evaluate, based on data and real operational conditions, when electrification makes sense and which aspects must be considered before taking a decision.

Sources and references used

International Energy Agency (IEA)

Electricity 2026 – Demand

Energy Efficiency 2025 – Industry

Renewables for Industry

Can low-temperature heat in factories be electrified competitively?

Empresa de Pesquisa Energética (EPE)

Balanço Energético Nacional 2026

Anuário Estatístico de Energia Elétrica 2026 – Highlights

U.S. Department of Energy – Better Buildings & Better Plants

Industrial Electrification Technologies Booklet

Technical Authorship

This content was developed by the Mitsidi content team, based on technical references, public data, and the company's experience in energy efficiency, energy management, and decarbonization projects.

The materials published in this section are prepared by the editorial team and reviewed by Mitsidi's technical experts.

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