Global electricity demand is set to grow by close to 5 percent in 2021 and 4 percent in 2022 – driven by the economic recovery – according to IEA’s semi-annual Electricity Market Report.
The majority of the increase in electricity demand is expected to come from the Asia Pacific region, primarily China and India.
Eelectricity demand fell by about 1 percent in 2020 due to the impacts of the Covid-19 pandemic, the report said.
Electricity generation from renewables – including hydropower, wind and solar PV – is on track to grow strongly around the world over the next two years – by 8 percent in 2021 and by more than 6 percent in 2022.
Fossil fuel-based electricity generation is set to cover 45 percent of additional demand in 2021 and 40 percent in 2022, with nuclear power accounting for the rest.
CO2 emissions from the electricity sector – which fell in both 2019 and 2020 – are forecast to increase by 3.5 percent in 2021 and by 2.5 percent in 2022, which would take them to an all-time high.
Renewable growth has exceeded demand growth in only two years: 2019 and 2020. It was largely due to exceptionally slow or declining demand, suggesting that renewables outpacing the rest of the electricity sector is not yet the new normal.
“Renewable power is growing impressively in many parts of the world, but it still isn’t where it needs to be to put us on a path to reaching net-zero emissions by mid-century,” said Keisuke Sadamori, the IEA Director of Energy Markets and Security.
Nearly three-quarters of emissions reductions between 2020 and 2025 take place in the electricity sector. To achieve this decline, the pathway calls for coal-fired electricity generation to fall by more than 6 percent a year.
Coal-fired electricity generation is set to increase by almost 5 percent this year and by further 3 percent in 2022, potentially reaching an all-time high, according to the Electricity Market Report.
Gas-fired generation, which declined 2 percent in 2020, is expected to increase by 1 percent in 2021 and by nearly 2 percent in 2022. The growth of gas lags that of coal because it plays a smaller role in the fast-growing economies in the Asia Pacific region and it faces competition from renewables in Europe and North America.