Released August 01, 2024 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Worldwide electricity demand is expected to rise sharply this year and next, growing about 4% each year, driven by stronger economic growth, heatwaves that drive up electricity use and growing electrification of the world's economies, according to a report from the International Energy Agency (IEA) (Paris, France).
Click on the image at right to see year-over-year global electric demand growth since 1991, and a forecast for 2024 and 2025.
The agency's Electricity Mid-Year Update, released July 19, said China's demand for electricity grew 7% in 2023, and is forecast to grow 6.5% this year and 6.2% in 2025. On a percentage basis, India is experiencing the world's fastest demand growth for electricity: It rose 8% in 2023 and is forecast to rise 8% this year and 6.8% in 2025.
U.S. electricity demand fell 1.6% in 2023, the report noted, a function of slower economic growth and mild weather. But demand is forecast to rise 3% this year and 1.9% in 2025, driven in large part by surging electric demand growth from data centers. Typically, electric demand grows about 1% per year in the U.S., though growth typically is higher when the country comes out of a recession and a public health crisis like COVID-19.
The Electricity Mid-Year Update noted that, "many regions (around the world) struggled with intense heatwaves in the first half of 2024, which elevated electricity demand and strained power grids. May 2024 was the hottest month since global records began and the 12th consecutive month of record-high temperatures. India, Mexico, Pakistan, the United States, Vietnam and many other countries saw severe heatwaves with surging peak loads due to the increased need for cooling."
"As more households begin to purchase air conditioners (ACs), the impact will grow substantially, particularly in emerging economies where the proportion of households with ACs is currently much lower compared with advanced economies with comparable climates," the report continued. "Implementing higher efficiency standards for air conditioning will be crucial to mitigate the impact of increased cooling demand on power systems. The expansion and reinforcement of power grids will also be very important to ensure reliability."
Across the world, the report forecast that the amount of electricity generated by renewables will rise sharpy this year and next, as the trend to decarbonize electric generation continues to grow. "Clean energy sources will set new records through 2025," the report predicted. "Despite the sharp rise in electricity use, solar PV alone is expected to meet roughly half of the growth in global electricity demand to 2025. Together with wind power generation, (those sources) will (meet) almost 75% of the increase."
It continued: "Global electricity generation from solar PV and wind is expected to surpass that from hydropower in 2024. This follows a massive 33% year-on-year increase in global solar PV generation and sustained growth in wind generation of 10%. The global energy transition is set to achieve another significant milestone by 2025, with total renewable generation poised to overtake coal-fired electricity output. The share of renewables in global electricity supply rose to 30% in 2023 and is projected to climb further to 35% in 2025."
Click on the image at right to see year-over-year changes in electricity generated by source since 2018, with predictions for 2024 and 2025.
The race to renewables is shown in a country-by-country analysis in the report. On a year-over-year basis, the IEA sees renewables surging in China, the U.S. and the European Union in 2024 and 2025. The trend is less pronounced in India, where heat waves earlier this year cut into hydroelectric generation and led to an increased use of coal. But in 2025, renewables are expected to grow significantly in that country. Interestingly, the IEA report shows that the U.S. relied more heavily on natural gas than renewables in 2022 and 2023, though renewables are expected to crowd out gas in 2024 and 2025.
By yearend 2025, the IEA report predicted global carbon dioxide (CO2) emissions from the power sector will dip slightly compared to 2023 levels, as increased emissions from India are offset by reductions from the EU and U.S.
Click on the image at right to see IEA's prediction of worldwide CO2 emissions from the electricity sector will be in 2025 compared to 2023.
The IEA report also noted that several regions, such as the Texas Panhandle, Southern California, South Australia and Houston, Texas, are experiencing a growing incidence of negative prices for electricity, which occur when renewable sources of generation produce electricity that exceeds electric demand. More widespread deployment of energy storage, and increased investments in electric grids, could reduce this waste of electricity.
Like other organizations, the agency noted how artificial intelligence (AI) and data centers were driving up global electricity use. It called for better measurement of those sectors' usage and demand growth. "The rise of AI has put the electricity consumption of data centers in focus, making better stocktaking more important than ever," the report said. "In many regions, historical estimates of data centers' electricity consumption are hampered by a lack of reliable data. At the same time, future projections include a very wide range of uncertainties related to the pace of deployment, the diverse and expanding applications of AI and the potential for energy efficiency improvements. Expanding and improving the collection of electricity demand data from the sector will be crucial to identify past developments correctly and to understand future trends better."
For many years, the IEA has urged swift and decisive action to counter the world's rising CO2 emissions from the energy sector. Presumably, the agency is pleased with progress made, and projections of further gains, in decarbonizing the electricity sector. But it cautioned that now was not the time for the world to rest on its laurels. "In 2024, temperatures set new records around the globe, with electricity demand for cooling surging and severely impacting power systems. From January to May 2024, the world's surface temperature registered the warmest on record at 1.32°C above the 1901-2000 average, with April 2024 marking a new high."
The agency issued a separate mid-year update July 24 on global coal use that tended to align with the findings of the electricity report. The IEA's Coal Mid-Year Update, noted that global demand for thermal coal exceeded its expectation for 2023, but that was largely because drought in China forced that country to increase its use of coal-fired generation to meet rising electric demand. China's use of thermal coal rose 8% in 2023.
India's demand for thermal coal rose 10% last year, the report noted: "Unlike in many other parts of the world, in India, growth in renewable energy sources is unable to keep pace with the growth in power demand."
Coal consumption in the United States and European Union plunged by 17% and 23%, respectively in 2023, the report said, representing their most significant annual decline of this century apart from the reduction caused by COVID-19.
For the first half of 2024, global demand for thermal coal rose about 1.4%, driven by increased use in India and China, the IEA report said. While hydro conditions have recently improved in China, they have not in India, causing the agency to predict that global coal use for power generation will rise about 0.5% overall for 2024 compared to 2023 usage. Globally, it forecast the power sector will burn a total of 5.9 billion tons.
The IEA coal report predicted that better hydro conditions this year in China will lead to a 1.1% decline in that country's use of thermal coal for power generation in 2025. Demand will continue falling in the U.S. (8 million tons or 2%) and the European Union (9 million tons or 3.0%) in 2025, it predicted.
But coal use for power is expected to rise in India next year. "In India, the rise of renewables will likely not cover the growth in power demand. Therefore, we expect coal plants to capture part of the growth." The IEA report noted that India aims to commission 14,000 megawatts (MW) GW of new coal-fired electric generation in 2024, more than four times the annual average in the last five years.
Taken together, the reports paint a generally positive picture for those concerned about rising emissions of CO2 and a warming planet. But the vicissitudes of temperature and rainfall, and thus the role of hydropower, suggest that any optimism about global warming should be qualified and tempered with caution.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The agency's Electricity Mid-Year Update, released July 19, said China's demand for electricity grew 7% in 2023, and is forecast to grow 6.5% this year and 6.2% in 2025. On a percentage basis, India is experiencing the world's fastest demand growth for electricity: It rose 8% in 2023 and is forecast to rise 8% this year and 6.8% in 2025.
U.S. electricity demand fell 1.6% in 2023, the report noted, a function of slower economic growth and mild weather. But demand is forecast to rise 3% this year and 1.9% in 2025, driven in large part by surging electric demand growth from data centers. Typically, electric demand grows about 1% per year in the U.S., though growth typically is higher when the country comes out of a recession and a public health crisis like COVID-19.
The Electricity Mid-Year Update noted that, "many regions (around the world) struggled with intense heatwaves in the first half of 2024, which elevated electricity demand and strained power grids. May 2024 was the hottest month since global records began and the 12th consecutive month of record-high temperatures. India, Mexico, Pakistan, the United States, Vietnam and many other countries saw severe heatwaves with surging peak loads due to the increased need for cooling."
"As more households begin to purchase air conditioners (ACs), the impact will grow substantially, particularly in emerging economies where the proportion of households with ACs is currently much lower compared with advanced economies with comparable climates," the report continued. "Implementing higher efficiency standards for air conditioning will be crucial to mitigate the impact of increased cooling demand on power systems. The expansion and reinforcement of power grids will also be very important to ensure reliability."
Across the world, the report forecast that the amount of electricity generated by renewables will rise sharpy this year and next, as the trend to decarbonize electric generation continues to grow. "Clean energy sources will set new records through 2025," the report predicted. "Despite the sharp rise in electricity use, solar PV alone is expected to meet roughly half of the growth in global electricity demand to 2025. Together with wind power generation, (those sources) will (meet) almost 75% of the increase."
It continued: "Global electricity generation from solar PV and wind is expected to surpass that from hydropower in 2024. This follows a massive 33% year-on-year increase in global solar PV generation and sustained growth in wind generation of 10%. The global energy transition is set to achieve another significant milestone by 2025, with total renewable generation poised to overtake coal-fired electricity output. The share of renewables in global electricity supply rose to 30% in 2023 and is projected to climb further to 35% in 2025."
The race to renewables is shown in a country-by-country analysis in the report. On a year-over-year basis, the IEA sees renewables surging in China, the U.S. and the European Union in 2024 and 2025. The trend is less pronounced in India, where heat waves earlier this year cut into hydroelectric generation and led to an increased use of coal. But in 2025, renewables are expected to grow significantly in that country. Interestingly, the IEA report shows that the U.S. relied more heavily on natural gas than renewables in 2022 and 2023, though renewables are expected to crowd out gas in 2024 and 2025.
By yearend 2025, the IEA report predicted global carbon dioxide (CO2) emissions from the power sector will dip slightly compared to 2023 levels, as increased emissions from India are offset by reductions from the EU and U.S.
The IEA report also noted that several regions, such as the Texas Panhandle, Southern California, South Australia and Houston, Texas, are experiencing a growing incidence of negative prices for electricity, which occur when renewable sources of generation produce electricity that exceeds electric demand. More widespread deployment of energy storage, and increased investments in electric grids, could reduce this waste of electricity.
Like other organizations, the agency noted how artificial intelligence (AI) and data centers were driving up global electricity use. It called for better measurement of those sectors' usage and demand growth. "The rise of AI has put the electricity consumption of data centers in focus, making better stocktaking more important than ever," the report said. "In many regions, historical estimates of data centers' electricity consumption are hampered by a lack of reliable data. At the same time, future projections include a very wide range of uncertainties related to the pace of deployment, the diverse and expanding applications of AI and the potential for energy efficiency improvements. Expanding and improving the collection of electricity demand data from the sector will be crucial to identify past developments correctly and to understand future trends better."
For many years, the IEA has urged swift and decisive action to counter the world's rising CO2 emissions from the energy sector. Presumably, the agency is pleased with progress made, and projections of further gains, in decarbonizing the electricity sector. But it cautioned that now was not the time for the world to rest on its laurels. "In 2024, temperatures set new records around the globe, with electricity demand for cooling surging and severely impacting power systems. From January to May 2024, the world's surface temperature registered the warmest on record at 1.32°C above the 1901-2000 average, with April 2024 marking a new high."
The agency issued a separate mid-year update July 24 on global coal use that tended to align with the findings of the electricity report. The IEA's Coal Mid-Year Update, noted that global demand for thermal coal exceeded its expectation for 2023, but that was largely because drought in China forced that country to increase its use of coal-fired generation to meet rising electric demand. China's use of thermal coal rose 8% in 2023.
India's demand for thermal coal rose 10% last year, the report noted: "Unlike in many other parts of the world, in India, growth in renewable energy sources is unable to keep pace with the growth in power demand."
Coal consumption in the United States and European Union plunged by 17% and 23%, respectively in 2023, the report said, representing their most significant annual decline of this century apart from the reduction caused by COVID-19.
For the first half of 2024, global demand for thermal coal rose about 1.4%, driven by increased use in India and China, the IEA report said. While hydro conditions have recently improved in China, they have not in India, causing the agency to predict that global coal use for power generation will rise about 0.5% overall for 2024 compared to 2023 usage. Globally, it forecast the power sector will burn a total of 5.9 billion tons.
The IEA coal report predicted that better hydro conditions this year in China will lead to a 1.1% decline in that country's use of thermal coal for power generation in 2025. Demand will continue falling in the U.S. (8 million tons or 2%) and the European Union (9 million tons or 3.0%) in 2025, it predicted.
But coal use for power is expected to rise in India next year. "In India, the rise of renewables will likely not cover the growth in power demand. Therefore, we expect coal plants to capture part of the growth." The IEA report noted that India aims to commission 14,000 megawatts (MW) GW of new coal-fired electric generation in 2024, more than four times the annual average in the last five years.
Taken together, the reports paint a generally positive picture for those concerned about rising emissions of CO2 and a warming planet. But the vicissitudes of temperature and rainfall, and thus the role of hydropower, suggest that any optimism about global warming should be qualified and tempered with caution.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
