After experiencing its biggest decline in decades, global electricity demand is expected to rebound modestly next year, led by growth in China, India and other emerging economies, according to a new report by the International Energy Agency (IEA).
The historic shock of the Covid-19 crisis is set to result in a 2%
decline in global electricity demand in 2020, according to the IEA’s
first ever Electricity Market Report. With the recovery of the world
economy in 2021, electricity demand is forecast to grow by around 3%.
That would be significantly weaker than the rebound in demand of over 7%
in 2010, the year following the global financial crisis. China will be
the only major economy to see higher electricity demand in 2020.
However, its expected growth of around 2% is well below its recent
average of 6.5%. Other big electricity consumers including the US,
India, Europe, Japan, Korea and Southeast Asia are all set to experience
declines for the year as a whole.
Electricity generation from
renewable energy – such as hydropower, wind and solar – is forecast to
grow by almost 7% in 2020, squeezing conventional power sources.
Coal-fired generation is set to fall by around 5%, the largest decrease
on record; nuclear power generation by around 4%; and gas-fired
electricity generation by 2%. Overall, CO2 emissions from electricity
generation are on course to fall by 5% in 2020.
"Electricity
has a central role in today’s energy world – a role that will only
increase in importance as clean energy transitions accelerate,” said Dr
Fatih Birol, the IEA’s Executive Director. "Based on the very latest
data available, the IEA’s new Electricity Market Report provides fresh
insights on this critical sector. Starting next year, we will publish a
new edition of the report on a half-yearly basis.”
Falling
demand, lower fuel prices and the increase in renewable generation have
dragged down wholesale electricity prices in 2020. The IEA’s wholesale
electricity market price index, which tracks price movements in major
advanced economies, shows an average price decline of 28% this year,
after having already fallen by 12% in 2019.
The growth of
renewable power generation is forecast to continue in 2021 with an
increase of more than 6%, expanding the share of renewables in the power
mix to 29% from 28% in 2020. Nuclear power is set for growth of 2.5%
next year on rebounds in France and Japan and new plants coming online
in China and the UAE.
In advanced economies, the growth of
renewables and nuclear power will continue to shrink the space remaining
for fossil fuel generation. Natural gas is likely to be impacted more
than coal as a result of an expected rise in natural gas prices. In
emerging and developing economies, demand growth is forecast to outpace
increases in renewables and nuclear power, leaving some room for coal
and gas generation to expand.
The expected net result globally
is that coal-fired generation increases by around 3% in 2021, while
gas-fired plants increase output by roughly 1%. This would lead to a
rise in CO2 emissions from the power sector of around 2% in 2021.
(TradeArabia News Service, December 16, 2020)
