Released January 25, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Global electric demand grew approximately 2.2% in 2023, slightly less than in 2022, but growth is expected to increase to an average of 3.4% annually over the 2024-2026 period, according to a new report from the International Energy Agency (IEA) (Paris, France).
China, India and Southeast Asia accounted for the majority of global electric demand growth in 2023, the agency said in Electricity 2024, which was released January 24. Last year, electric demand in China grew 6.4% over 2022 demand, a strong percentage gain.
Click on the image at right to see a graphic on global electric demand growth from 2022 to 2023.
Looking out to the 2024-2026 period, the IEA sees Chinese demand growth moderating to an average of about 4.9% per year, still a high percentage gain. Chinese overall electricity demand continues to follow a "hockey stick" growth pattern, which is expected to continue through 2026 as the country continues to rapidly industrialize. On a per-capita basis, Chinese electric demand surpassed the European Union's last year, but its per-person use of electricity remains far below the per-capita use of electricity in the U.S.
Click on the image at right to see a graphic showing total Chinese electric demand, population and per-capita electric use compared to the U.S. and the European Union.
In years past, rapid electric demand growth could have been a cause for concern for those worried about climate change, as rising demand in the past often was met with new fossil-fueled generation, mainly fired by coal or natural gas. But this year's annual electricity report sang a different tune, projecting that renewable generation and nuclear power currently under development would more than meet expected surging demand.
"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 accompanying the release of Electricity 2024. "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."
The 171-page report noted that global economic growth is powering rising electric demand. A significant part of that growth story, particularly in advanced economies and China, is the expansion of data centers, artificial intelligence (AI) and cryptocurrency mining.
Click on the image at right to see historical and projected electric demand growth through 2026 for the world's data centers, AI and cryptocurrency mining in a low, base, and high case.
The report said: "Electricity consumption from data centers, AI and the cryptocurrency sector could double by 2026. Data centers are significant drivers of growth in electricity demand in many regions. After globally consuming an estimated 460 terawatt-hours (TWh) in 2022, data centers' total electricity consumption could reach more than 1,000 TWh in 2026. This demand is roughly equivalent to the electricity consumption of Japan. Updated regulations and technological improvements, including on efficiency, will be crucial to moderate the surge in energy consumption from data centers."
The IEA report noted that electric demand growth in China and advanced economies also are being propelled by the ongoing electrification of the residential and transport sectors.
Although China is expected to have the largest share of global electricity demand growth in terms of kilowatt-hours of electricity, Renewables 2024 projected that India would post the fastest percentage gain in electric demand through 2026. Indian electric demand grew 7% in 2023, and growth is expected to exceed 6% per year over the 2024-2026 period. Strong economic growth, and the rising ownership of air conditioners, are propelling electric usage upward in that country. The report projected that renewables will meet nearly half of India's forecast demand growth, but that about 33% of the growth will be met with electricity generated from coal.
The energy agency said electricity demand in the U.S. grew about 2.6% in 2022, driven by a growing economy. However, milder weather and a slowdown in manufacturing in 2023 led to a 1.6% decline in energy usage last year. In 2024, it said, demand growth is projected to rise about 2.5%, assuming weather conditions return to their normal levels, then revert to the mean of growing approximately 1% per year in 2025 and 2026. Growing electrification of the economy, and an expansion of data centers, are expected to drive future electric demand growth in the U.S., IEA said.
On the supply side, the report predicted that "record-breaking electricity generation from low-emissions sources--which includes nuclear and renewables such as solar, wind and hydro--is set to cover all global demand growth over the next three years. Low-emissions sources, which will reduce the role of fossil fuels in producing electricity globally, are forecast to account for almost half of the world's electricity generation by 2026, up from 39% in 2023. Over the next three years, low-emissions generation is set to rise at twice the annual growth rate between 2018 and 2023--a consequential change, given that the power sector contributes the most to global carbon dioxide (CO2) emissions today."
It is not clear, but it appears that the agency is excluding natural gas from its "low-emitting" category of electric generation. Exceptionally strong growth in the installed capacity of renewable energy will characterize generation capacity additions over the 2024-2026 period, the IEA forecast.
Click on the image at right to see the world's historical and projected electric generation capacity by fuel.
"Renewables are set to provide more than one-third of total electricity generation globally by early 2025, overtaking coal," Renewables 2024 said. "The share of renewables in electricity generation is forecast to rise from 30% in 2023 to 37% in 2026, with the growth largely supported by the expansion of ever cheaper solar PV."
"The rapid growth of renewables, supported by rising nuclear generation, is set to displace global coal-fired generation, which is forecast to fall by an average of 1.7% annually through 2026."
On the subject of nuclear, the Paris-based agency wrote, "By 2025, global nuclear generation is forecast to exceed its previous record set in 2021. Even as some countries phase out nuclear power or retire plants early, nuclear generation is forecast to grow by close to 3% per year on average through 2026 as maintenance works are completed within France, Japan restarts nuclear production at several power plants and new reactors begin commercial operations in various markets, including China, India, Korea and Europe. Many countries are making nuclear power a critical part of their energy strategies as they look to safeguard energy security while reducing greenhouse gas emissions."
On balance, declining emissions of CO2 in advanced economies such as the U.S., Japan, Korea and the EU will be offset by surging emissions from China, India and Southeast Asia. Global CO2 emissions from the power sector rose slightly over the 2021-2023 period, but they are expected to decline slightly through 2026.
Click on the image at right to see a chart of CO2 emissions from the power sector globally, and for selected countries.
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).
China, India and Southeast Asia accounted for the majority of global electric demand growth in 2023, the agency said in Electricity 2024, which was released January 24. Last year, electric demand in China grew 6.4% over 2022 demand, a strong percentage gain.
Looking out to the 2024-2026 period, the IEA sees Chinese demand growth moderating to an average of about 4.9% per year, still a high percentage gain. Chinese overall electricity demand continues to follow a "hockey stick" growth pattern, which is expected to continue through 2026 as the country continues to rapidly industrialize. On a per-capita basis, Chinese electric demand surpassed the European Union's last year, but its per-person use of electricity remains far below the per-capita use of electricity in the U.S.
In years past, rapid electric demand growth could have been a cause for concern for those worried about climate change, as rising demand in the past often was met with new fossil-fueled generation, mainly fired by coal or natural gas. But this year's annual electricity report sang a different tune, projecting that renewable generation and nuclear power currently under development would more than meet expected surging demand.
"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 accompanying the release of Electricity 2024. "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."
The 171-page report noted that global economic growth is powering rising electric demand. A significant part of that growth story, particularly in advanced economies and China, is the expansion of data centers, artificial intelligence (AI) and cryptocurrency mining.
The report said: "Electricity consumption from data centers, AI and the cryptocurrency sector could double by 2026. Data centers are significant drivers of growth in electricity demand in many regions. After globally consuming an estimated 460 terawatt-hours (TWh) in 2022, data centers' total electricity consumption could reach more than 1,000 TWh in 2026. This demand is roughly equivalent to the electricity consumption of Japan. Updated regulations and technological improvements, including on efficiency, will be crucial to moderate the surge in energy consumption from data centers."
The IEA report noted that electric demand growth in China and advanced economies also are being propelled by the ongoing electrification of the residential and transport sectors.
Although China is expected to have the largest share of global electricity demand growth in terms of kilowatt-hours of electricity, Renewables 2024 projected that India would post the fastest percentage gain in electric demand through 2026. Indian electric demand grew 7% in 2023, and growth is expected to exceed 6% per year over the 2024-2026 period. Strong economic growth, and the rising ownership of air conditioners, are propelling electric usage upward in that country. The report projected that renewables will meet nearly half of India's forecast demand growth, but that about 33% of the growth will be met with electricity generated from coal.
The energy agency said electricity demand in the U.S. grew about 2.6% in 2022, driven by a growing economy. However, milder weather and a slowdown in manufacturing in 2023 led to a 1.6% decline in energy usage last year. In 2024, it said, demand growth is projected to rise about 2.5%, assuming weather conditions return to their normal levels, then revert to the mean of growing approximately 1% per year in 2025 and 2026. Growing electrification of the economy, and an expansion of data centers, are expected to drive future electric demand growth in the U.S., IEA said.
On the supply side, the report predicted that "record-breaking electricity generation from low-emissions sources--which includes nuclear and renewables such as solar, wind and hydro--is set to cover all global demand growth over the next three years. Low-emissions sources, which will reduce the role of fossil fuels in producing electricity globally, are forecast to account for almost half of the world's electricity generation by 2026, up from 39% in 2023. Over the next three years, low-emissions generation is set to rise at twice the annual growth rate between 2018 and 2023--a consequential change, given that the power sector contributes the most to global carbon dioxide (CO2) emissions today."
It is not clear, but it appears that the agency is excluding natural gas from its "low-emitting" category of electric generation. Exceptionally strong growth in the installed capacity of renewable energy will characterize generation capacity additions over the 2024-2026 period, the IEA forecast.
"Renewables are set to provide more than one-third of total electricity generation globally by early 2025, overtaking coal," Renewables 2024 said. "The share of renewables in electricity generation is forecast to rise from 30% in 2023 to 37% in 2026, with the growth largely supported by the expansion of ever cheaper solar PV."
"The rapid growth of renewables, supported by rising nuclear generation, is set to displace global coal-fired generation, which is forecast to fall by an average of 1.7% annually through 2026."
On the subject of nuclear, the Paris-based agency wrote, "By 2025, global nuclear generation is forecast to exceed its previous record set in 2021. Even as some countries phase out nuclear power or retire plants early, nuclear generation is forecast to grow by close to 3% per year on average through 2026 as maintenance works are completed within France, Japan restarts nuclear production at several power plants and new reactors begin commercial operations in various markets, including China, India, Korea and Europe. Many countries are making nuclear power a critical part of their energy strategies as they look to safeguard energy security while reducing greenhouse gas emissions."
On balance, declining emissions of CO2 in advanced economies such as the U.S., Japan, Korea and the EU will be offset by surging emissions from China, India and Southeast Asia. Global CO2 emissions from the power sector rose slightly over the 2021-2023 period, but they are expected to decline slightly through 2026.
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).
