Released July 20, 2023 | sugar land
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Global electric demand growth will slow in 2023, as declining demand in the U.S., Japan and the European Union (EU) are offset by robust increases in electricity use in China and India, the International Energy Agency (IEA) (Paris, France) said, in a new report released Wednesday.
The agency's Electricity Markets Report Update: Outlook for 2023 and 2024, an update of a report first issued this past February, predicted that global electricity use will rise about 2% in 2023, down from an increase of 2.3% in 2022. In 2024, the report projected, electricity use will rise 3.3%.
"This moderation is strongly driven by declining electricity demand in advanced economies, which are dealing with the ongoing effects of the global energy crisis and slower economic growth," the report said. "In 2024, as expectations for the economic outlook improve, global electricity demand growth is forecast to rebound." Electricity use grew by an average of 2.4% per year over the 2015-2019 period, the report added.
Click on the icon at right to see historical and projected year-on-year percentage changes in electricity demand for several global regions over the 2019-2024 period.
The report pays particular attention to divergent electricity-use trends in the EU, on the one hand, and China and India, on the other. Electricity demand in the EU is set to decline in 2023 for the second year in a row, falling to its lowest level in two decades, the report said. EU electricity demand fell 3.2% in 2022 and is expected to fall about 3% in 2023. The projected decline in 2023 is driven by what the report termed as a "staggering" 6% decline in first-half electricity use by the group's energy-intensive industries compared to the first six months of 2022. This drop offsets record growth in electric heat pumps and electric vehicles (EVs).
Electricity use in the U.S. rose 2.6% in 2022, but is expected to shrink 1.7% this year, despite early-summer surges in electric demand driven by record heat. Next year, the energy agency forecast U.S. electric demand growth will rebound with 2% growth. Japan's electricity demand is expected to fall by a record 3% this year, the agency said.
But China's electricity demand, which grew 3.7% in 2022, is expected to rise by about 5.3% in 2023 and approximately 5.1% in 2024, slightly below its 2015-2019 average of 5.4%, the report said. The IEA said it expected Indian electric demand to rise by an average of 6.5% per year in 2023 and 2024, exceeding its 2015-2019 average of 5.2%.
Click on the icon at right to see historical and projected year-on-year changes in electricity use, measured in terawatt-hours (TWh), for several global regions over the 2019-2024 period.
"The world's need for electricity is set to grow strongly in the years to come," said Keisuke Sadamori, the IEA's Director for Energy Markets and Security. "And we're encouraged to see renewables accounting for a rising share of electricity generation, resulting in declines in the use of fossil fuels for power generation. Now is the time for policy makers and the private sector to build on this momentum to ensure emissions from the power sector go into sustained decline."
The report noted the continued high growth of renewable energy around the world, projecting that new renewable capacity additions in 2023 and 2024 could be equal to global increased electricity demand for those years.
The accelerated pace of new renewable capacity additions means that renewable electric generation, including hydroelectric production, could surpass coal-fired electricity production by next year if weather conditions are favorable. The IEA report projected that coal-fired generation will slightly decline in 2023 and 2024 after rising 1.5% in 2022, when high gas prices led to increased gas-to-coal switching. Asia is expected to increase demand for coal-fired electricity this year and next, which is projected to offset strong drops in the United States and Europe in 2023 and 2024.
By 2024, the share of renewable generation in global electricity supply is expected to exceed 33% for the first time, the report said. On the other hand, by 2024, electricity generation from fossil fuels is expected to have fallen four times in six years.
The Electricity Markets Report Update noted that "declines in fossil-fired generation were rare in the past and occurred primarily after global energy and financial shocks, such as following the oil crises of the 1970s or during the Great Recession in 2009, periods when overall electricity demand was suppressed. But in recent years, fossil-fired supply has lagged or fallen even when electricity demand expanded."
But declining reliance on fossil fuels to generate electricity at a time when electric demand is growing "suggests that the declines in fossil electricity generation are becoming structural. The world is rapidly moving towards a tipping point where global electricity generation from fossil fuels begins to decline and is increasingly replaced by electricity from clean energy sources."
Whether that greener electric future comes to pass depends to a great degree on the availability of hydropower, the report observed: "The capacity factor of global hydropower has been in decline over the past decade, falling from an average of 38% in 1990-2016 to about 36% in 2020-2022." A two-percentage point decline works out to about 240 terawatt-hours (TWh) less hydro electricity production, about the total annual electric use of Spain. Recent droughts have caused "a significant reduction in hydropower availability in affected regions such as Europe, Brazil and China," the IEA report said.
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) 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 Markets Report Update: Outlook for 2023 and 2024, an update of a report first issued this past February, predicted that global electricity use will rise about 2% in 2023, down from an increase of 2.3% in 2022. In 2024, the report projected, electricity use will rise 3.3%.
"This moderation is strongly driven by declining electricity demand in advanced economies, which are dealing with the ongoing effects of the global energy crisis and slower economic growth," the report said. "In 2024, as expectations for the economic outlook improve, global electricity demand growth is forecast to rebound." Electricity use grew by an average of 2.4% per year over the 2015-2019 period, the report added.
Click on the icon at right to see historical and projected year-on-year percentage changes in electricity demand for several global regions over the 2019-2024 period.The report pays particular attention to divergent electricity-use trends in the EU, on the one hand, and China and India, on the other. Electricity demand in the EU is set to decline in 2023 for the second year in a row, falling to its lowest level in two decades, the report said. EU electricity demand fell 3.2% in 2022 and is expected to fall about 3% in 2023. The projected decline in 2023 is driven by what the report termed as a "staggering" 6% decline in first-half electricity use by the group's energy-intensive industries compared to the first six months of 2022. This drop offsets record growth in electric heat pumps and electric vehicles (EVs).
Electricity use in the U.S. rose 2.6% in 2022, but is expected to shrink 1.7% this year, despite early-summer surges in electric demand driven by record heat. Next year, the energy agency forecast U.S. electric demand growth will rebound with 2% growth. Japan's electricity demand is expected to fall by a record 3% this year, the agency said.
But China's electricity demand, which grew 3.7% in 2022, is expected to rise by about 5.3% in 2023 and approximately 5.1% in 2024, slightly below its 2015-2019 average of 5.4%, the report said. The IEA said it expected Indian electric demand to rise by an average of 6.5% per year in 2023 and 2024, exceeding its 2015-2019 average of 5.2%.
Click on the icon at right to see historical and projected year-on-year changes in electricity use, measured in terawatt-hours (TWh), for several global regions over the 2019-2024 period."The world's need for electricity is set to grow strongly in the years to come," said Keisuke Sadamori, the IEA's Director for Energy Markets and Security. "And we're encouraged to see renewables accounting for a rising share of electricity generation, resulting in declines in the use of fossil fuels for power generation. Now is the time for policy makers and the private sector to build on this momentum to ensure emissions from the power sector go into sustained decline."
The report noted the continued high growth of renewable energy around the world, projecting that new renewable capacity additions in 2023 and 2024 could be equal to global increased electricity demand for those years.
The accelerated pace of new renewable capacity additions means that renewable electric generation, including hydroelectric production, could surpass coal-fired electricity production by next year if weather conditions are favorable. The IEA report projected that coal-fired generation will slightly decline in 2023 and 2024 after rising 1.5% in 2022, when high gas prices led to increased gas-to-coal switching. Asia is expected to increase demand for coal-fired electricity this year and next, which is projected to offset strong drops in the United States and Europe in 2023 and 2024.
By 2024, the share of renewable generation in global electricity supply is expected to exceed 33% for the first time, the report said. On the other hand, by 2024, electricity generation from fossil fuels is expected to have fallen four times in six years.
The Electricity Markets Report Update noted that "declines in fossil-fired generation were rare in the past and occurred primarily after global energy and financial shocks, such as following the oil crises of the 1970s or during the Great Recession in 2009, periods when overall electricity demand was suppressed. But in recent years, fossil-fired supply has lagged or fallen even when electricity demand expanded."
But declining reliance on fossil fuels to generate electricity at a time when electric demand is growing "suggests that the declines in fossil electricity generation are becoming structural. The world is rapidly moving towards a tipping point where global electricity generation from fossil fuels begins to decline and is increasingly replaced by electricity from clean energy sources."
Whether that greener electric future comes to pass depends to a great degree on the availability of hydropower, the report observed: "The capacity factor of global hydropower has been in decline over the past decade, falling from an average of 38% in 1990-2016 to about 36% in 2020-2022." A two-percentage point decline works out to about 240 terawatt-hours (TWh) less hydro electricity production, about the total annual electric use of Spain. Recent droughts have caused "a significant reduction in hydropower availability in affected regions such as Europe, Brazil and China," the IEA report said.
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) 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).
