Global Electric Demand Slowed in 2022, but Future Trends Depend on China, India

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Despite the economic and energy tumult stemming from Russia's invasion of Ukraine a year ago, worldwide electric demand growth declined only slightly last year, rising 2% compared to a 2.4% annual growth rate for the pre-pandemic years, according to a new report from the International Energy Agency (IEA) (Paris, France).

The global average growth rate included a wide range of electric demand patterns on a national and regional basis. U.S. electric demand rose 2.6% in 2022 compared to 2021, said the IEA report, "Electricity Market Report 2023," which was released February 8. U.S. electric use last year grew slightly over its 2021 demand growth rate. Going forward, the U.S. electric demand is expected to increase by a compound annual growth rate (CAGR) of 0.6% per year over the 2023-2025 period.

The agency estimated that China's electric demand also grew by 2.6% in 2022, but it was on a much larger base. China's increased electric use last year was less than half of its pre-COVID annual demand gains. For the 2023-2025 period, the report predicted China's CAGR for electricity use will rise 5.2% annually.

Meanwhile, Indian electric demand grew 8.4% in 2022 compared to 2021 while the European Union electricity use fell 3.5% last year, a result of exceptionally mild winter and very high energy prices triggered by the Russian invasion of Ukraine, the report said.

The report shows the dramatic gains in electricity use by China and India compared to other regions of the world. China's electric demand was about 8,400 terawatt-hours (TWh) in 2022, nearly double the U.S. demand of 4,320 TWh. By 2025, the IEA report projected China's electricity use will rise to 9,790 TWh while U.S. use will reach 4,402 TWh.

Click on the image at right to see the IEA's historical and projected electric use, by region, from 1990-2025.

This yawning disparity is why so much of the energy world is anxiously watching China's economic development. When it comes to electric generation capacity, what China chooses to build, or not build, will have a significant impact on carbon dioxide (CO2) emissions as well as fuel prices.

"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 considerable uncertainties remain over trends in China as its economy emerges from strict Covid restrictions," the report said. "China's share of global electricity consumption is currently forecast to rise to a new record of one-third by 2025, up from one-quarter in 2015. At the same time, advanced economies are seeking to expand electricity use to displace fossil fuels in sectors such as transport, heating and industry."

The IEA report projected that low-emissions generation sources (renewables and nuclear) are set to cover almost all the growth in global electricity demand by 2025. Those fuel sources will dominate the growth of global electricity supply over the next three years, together meeting on average more than 90% of the additional demand.

"The world's growing demand for electricity is set to accelerate, adding more than double Japan's current electricity consumption over the next three years," IEA Executive Director Fatih Birol said in a statement accompanying the report. "The good news is that renewables and nuclear power are growing quickly enough to meet almost all this additional appetite, suggesting we are close to a tipping point for power sector emissions. Governments now need to enable low-emissions sources to grow even faster and drive down emissions so that the world can ensure secure electricity supplies while reaching climate goals."

Renewable energy's continued torrid growth depends to a degree on increased deployment of battery energy storage systems (BESS) to store energy generated when the sun is shining and the wind is blowing. Last year, BESS deployments in the U.S. and China roughly doubled their 2021 deployment numbers, and strong gains also were recorded in Europe and the OECD Pacific nations.

Click on the image at right to see BESS deployments, by MW, since 2018 in various countries and regions.

The carbon intensity of the power systems in the U.S. and European Union have declined in recent years due to the aggressive deployment of renewable generation and substitution of natural gas for coal in electric generation. However, these efforts have only served to counterbalance the significantly higher carbon intensities of power systems in India and China. However, China and India also are aggressively building non-emitting generation, which should pull down the global average carbon intensity of power systems going forward.

The Paris-based energy agency concludes by urging faster decarbonization and accelerated deployment of clean energy technologies. At the same time, it added, "as the clean energy transition gathers pace, the impact of weather events on electricity demand will intensify due to the increased electrification of heating, while the share of weather-dependent renewables will continue to grow in the generation mix. In such a world, increasing the flexibility of power systems while ensuring security of supply and resilience of networks will be crucial."

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