February 08 -- Renewables are set to dominate the growth of the world’s electricity supply over the next three years, according to a new IEA report.
Renewables together with nuclear power will meet the vast majority of the increase in global demand in electricity through to 2025.
The growth in electricity demand slowed last year to 2 percent amid the turmoil of the energy crisis and exceptional weather conditions in some regions.
The growth in world electricity demand is expected to accelerate to an average of 3 percent over the next three years, the IEA’s Electricity Market Report 2023 finds.
Emerging and developing economies in Asia are the driving forces behind this faster pace, which is a step up from average growth of 2.4 percent during the years before the pandemic.
More than 70 percent of the increase in global electricity demand over the next three years is expected to come from China, India and Southeast Asia.
China’s share of global electricity consumption is forecast to rise to a new record of one-third by 2025, from one-quarter in 2015. Advanced economies are seeking to expand electricity use to displace fossil fuels in sectors such as transport, heating and industry.
“Renewables and nuclear power are growing quickly enough to meet almost all this additional appetite, suggesting we are close to a tipping point for power sector emissions. Governments now need to enable low-emissions sources to grow even faster and drive down emissions,” said IEA Executive Director Fatih Birol.
Natural gas-fired power generation in the European Union is forecast to fall in the coming years. Sharp spikes in natural gas prices amid the energy crisis have in turn fuelled soaring electricity prices in some markets, particularly in Europe.
Declines in coal-fired generation in Europe and the Americas are likely to be matched by a rise in the Asia-Pacific region, despite increases in nuclear power deployment and restarts of plants in some countries such as Japan. This means that after reaching an all-time high in 2022, carbon dioxide (CO2) emissions from global power generation are set to remain around the same level through 2025.
The strong growth of renewables means their share of the global power generation mix is forecast to rise from 29 percent in 2022 to 35 percent in 2025, with the shares of coal- and gas-fired generation falling.
As a result, the CO2 intensity of global power generation will decrease in the coming years. Europe bucked this global trend last year. The CO2 intensity of Europe’s power generation increased as a result of higher use of coal and gas amid steep drops in output from both hydropower, due to drought, and nuclear power, due to plant closures and maintenance. Europe’s power generation emissions are expected to decrease on average by about 10 percent a year through 2025.
Electricity demand trends varied widely by region in 2022. India’s electricity consumption rose strongly, while China’s growth was more subdued due to its zero-Covid policy weighing heavily on economic activity. The United States recorded a robust increase in demand, driven by economic activity and higher residential use amid hotter summer weather and a colder-than-normal winter.
Demand in European Union contracted due to mild winter weather and a dip in electricity consumption in the industrial sector, which significantly scaled back production because of high energy prices and supply disruptions caused by Russia’s invasion of Ukraine. The 3.5 percent decrease in EU demand was its second largest percentage decline since the global financial crisis in 2009, with the largest being the exceptional contraction due to the Covid shock in 2020.