As renewable energy should cover almost all growth in electricity supply over the next three years as it, together with nuclear power, meets the vast majority of the increase in global demand until 2025, making significant increases in carbon emissions from the energy sector unlikely.
This is the analysis of new IEA report (International Energy Agency). After slowing slightly last year to 2% amid the turbulence of the global energy crisis and exceptional weather conditions in some regions, the demand growth accelerates to an average of 3% over the next three years.
According to the study, the emerging and developing economies in Asia are the driving forces behind this faster pace, which represents an improvement over the average growth of 2,4% during the years before the pandemic.
More than 70% of the increase in global electricity demand over the next three years is expected to come from China, India and Southeast Asia, although there remains considerable uncertainty about trends in China as its economy emerges from tight restrictions. of Covid-19.
China's share of global consumption is forecast to rise to a new record of a third by 2025, up from a quarter in 2015. At the same time, advanced economies are seeking to expand the use of electricity to replace fossil fuels in sectors such as such as transport, heating and industry.
“The world’s growing demand for electricity is expected to accelerate, adding more than double Japan’s current electricity consumption over the next three years,” said Fatih Birol, executive director of the IEA.
“The good news is that renewables and nuclear are growing fast enough to meet almost all of this additional appetite, suggesting we are close to a tipping point for power sector emissions,” he pointed out.
In his view, governments now need to allow low emission sources grow even faster and reduce emissions so the world can ensure secure electricity supplies while meeting climate goals.
Although natural gas power generation in the European Union is expected to decline in the coming years, based on current trends, a significant increase in the Middle East should partially offset this decline.
Sharp spikes in natural gas prices amid the energy crisis have in turn fueled rising electricity prices in some markets, especially in Europe, sparking debate in political circles about energy market design reforms.
Meanwhile, expected declines in coal generation in Europe and the Americas will likely be accompanied by an increase in the Asia-Pacific region, despite increased nuclear power deployment and power plant restarts in some countries such as Japan.
According to the IEA, this means that, after reaching an all-time high in 2022, carbon dioxide (CO2) emissions from global energy generation are expected to remain at the same level until 2025.
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Other data
The strong growth of renewables means that their share of the global power generation mix is expected to increase from 29% in 2022 to 35% in 2025, as the share of coal and gas generation falls.
As a result, the CO2 intensity of global power generation will continue to decline in the coming years. Europe bucked this global trend last year, however.
For the Agency, the CO2 intensity of Europe's electricity generation has increased as a result of greater use of coal and gas amid sharp declines in hydropower production due to drought and nuclear power due to plant closures and maintenance.
However, the research emphasized that this setback will be temporary, as Europe's power generation emissions are expected to decline by an average of around 10% per year until 2025.
Energy Demand Trends
Electricity demand trends varied widely by region in 2022. India's consumption rose sharply, while China's growth was more subdued due to its Covid-0 policy weighing on economic activity.
The United States, for example, has seen a robust increase in demand, driven by economic activity and higher residential use amid a hotter summer and colder-than-normal winter.
According to the study, demand in the European Union contracted due to the exceptionally mild winter and a drop in electricity consumption in the industrial sector, which significantly reduced production due to high energy prices and supply disruptions caused by the Russian invasion of Ukraine.
The 3,5% drop in EU demand was the second biggest percentage drop since the global financial crisis in 2009, the biggest being the exceptional contraction due to the Covid shock in 2020.
Decarbonization needs to accelerate
The new IEA report further noted that electricity demand and supply around the world is becoming increasingly dependent on the weather, with extreme conditions being a recurring theme in 2022. In addition to the drought in Europe, there have been heat waves in India, resulting in the country's highest peak energy demand.
Similarly, central and eastern China have been hit by heatwaves and droughts, causing demand for air conditioning to rise amid reduced hydropower generation in Sichuan province. The United States also saw severe winter storms in December, triggering major power outages.
Therefore, the IEA highlighted the need for faster decarbonization and accelerated deployment of clean energy technologies. At the same time, as the transition to clean energy gathers pace, the impact of weather events on electricity demand will intensify due to the growth of heating electrification, while the share of climate-dependent renewables will continue to grow in the energy mix. generation.
“In this world, it will be crucial to increase the flexibility of energy systems, ensuring security of supply and resilience of networks,” concluded the International Energy Agency.
