Global energy demand is set to increase by 4.6 percent in 2021, more than offsetting the 4 percent contraction in 2020 and pushing demand 0.5 percent above 2019 levels, says the latest IEA report.
Almost 70 percent of the projected increase in global energy demand is in emerging markets and developing economies, where demand is set to rise to 3.4 percent above 2019 levels. Energy use in advanced economies is on course to be 3 percent below pre-Covid levels.
Demand for all fossil fuels is set to grow significantly in 2021. Coal demand alone is projected to increase by 60 percent more than all renewables combined, underpinning a rise in emissions of almost 5 percent, or 1 500 Mt. This expected increase would reverse 80 percent of the drop in 2020, with emissions ending up just 1.2 percent (or 400 Mt) below 2019 emissions levels.
Despite an expected annual increase of 6.2 percent in 2021, global oil demand is set to remain around 3 percent below 2019 levels.
Oil use for road transport is not projected to reach pre-Covid levels until the end of 2021. Oil use for aviation is projected to remain 20 percent below 2019 levels even in December 2021, with annual demand more than 30 percent lower than in 2019. A full return to pre-crisis oil demand levels would have pushed up CO2 emissions a further 1.5 percent, putting them well above 2019 levels.
Coal demand is set to rise 4.5 percent in 2021, with more than 80 percent of the growth concentrated in Asia. China alone is projected to account for over 50 percent of global growth. Coal demand in the United States and the European Union is also rebounding, but is still set to remain well below pre-crisis levels.
The power sector accounted for only 50 percent of the drop in coal-related emissions in 2020. But the rapid increase in coal-fired generation in Asia means the power sector is expected to account for 80 percent of the rebound in 2021.
Natural gas demand is set to grow by 3.2 percent in 2021, propelled by increasing demand in Asia, the Middle East and the Russian Federation. This is expected to put global demand more than 1 percent above 2019 levels.
In the United States – the world’s largest natural gas market – the annual increase in demand is set to amount to less than 20 percent of the 20 bcm decline in 2020, squeezed by the continued growth of renewables and rising natural gas prices. Nearly three-quarters of the global demand growth in 2021 is from the industry and buildings sectors, while electricity generation from natural gas remains below 2019 levels.
Electricity demand is due to increase by 4.5 percent in 2021, or over 1 000 TWh. This is almost five times greater than the decline in 2020, cementing electricity’s share in final energy demand above 20 percent. Almost 80 percent of the projected increase in demand in 2021 is in emerging market and developing economies, with the China alone accounting for half of global growth. Demand in advanced economies remains below 2019 levels.
Demand for renewables grew by 3 percent in 2020 and is set to increase across all key sectors – power, heating, industry and transport – in 2021. The power sector leads the way, with its demand for renewables on course to expand by more than 8 percent, to reach 8 300 TWh, the largest year-on-year growth on record in absolute terms.
Solar PV and wind are expected to contribute two-thirds of renewables’ growth. The share of renewables in electricity generation is projected to increase to almost 30 percent in 2021, their highest share since the beginning of the Industrial Revolution and up from less than 27 percent in 2019.
Wind is on track to record the largest increase in renewable generation, growing by 275 TWh, or around 17 percent, from 2020. Solar PV electricity generation is expected to rise by 145 TWh, or almost 18 percent, and to approach 1 000 TWh in 2021.
Renewables are set to provide more than half of the increase in global electricity supply in 2021. It is followed by the United States, the European Union and India. China is expected to generate over 900 TWh from solar PV and wind in 2021, the European Union around 580 TWh, and the United States 550 TWh. Together, they represent almost three-quarters of global solar PV and wind output.