Global electricity demand is expected to grow at a faster rate over the next three years as the clean energy transition gathers speed, with all the additional demand forecast to be covered by technologies that produce low-emissions electricity, according to a new report from the International Energy Agency (IEA) released on Wednesday.
The Electricity 2024 report finds that while global growth in electricity demand eased to 2.2% in 2023 due to falling electricity consumption in advanced economies, it is projected to accelerate to an average of 3.4% from 2024 through 2026, the IEA said. The report also found that renewables are set to make up more than one-third or 33% of total electricity generation by early 2025, overtaking coal.
High growth areas
About 85% of the increase in the world’s electricity demand through 2026 is expected to come from outside advanced economies – most notably China, India and countries in Southeast Asia, the agency said. However, record-setting electricity generation from low-emissions sources – comprising renewables, such as solar, wind and hydro, as well as nuclear power – should reduce the role of fossil fuels in providing power for homes and businesses. Low-emissions sources are expected to account for almost half of the world’s electricity generation by 2026, up from a share of just under 40% in 2023, the IEA said.
The report is the latest edition of the IEA’s annual analysis of electricity market developments and policies, providing forecasts for demand, supply and carbon dioxide (CO2) emissions from the sector through 2026.
“The power sector currently produces more CO2 emissions than any other in the world economy, so it’s encouraging that the rapid growth of renewables and a steady expansion of nuclear power are together on course to match all the increase in global electricity demand over the next three years,” IEA Executive Director Fatih Birol said in a statement.
“This is largely thanks to the huge momentum behind renewables, with ever cheaper solar leading the way, and support from the important comeback of nuclear power, whose generation is set to reach a historic high by 2025. While more progress is needed, and fast, these are very promising trends,” Dr Birol said.
Role of nuclear power
By 2025, nuclear power generation is also forecast to reach an all-time high globally as output from France climbs, several plants in Japan come back online, and new reactors begin commercial operations in many markets, including in China, India, Korea and Europe.
According to the IEA, when the share of fossil fuels in global generation falls below 60%, this will mark the first time it has gone below this threshold in IEA records dating back more than five decades.
