IEA: ‘Almost All’ Additional Electricity Generation Installed Through to 2025 Will Be Renewable or Nuclear

Wednesday, 08 February 2023

The Agency has today (8 February) published its Electricity Market Outlook for 2023, tracking trends in electricity demand and sources of electricity around the globe for 2022 and setting out forecasts through to 2025.

As it predicted last year, the IEA is reiterating that emissions from the global power sector are likely to peak for good by 2025, as more renewables and nuclear come online and as the coal-fired electricity phase-out gathers pace.

However, it has stated that emissions from the sector peaked once more in 2022, following on from record highs in 2021. Emissions rose 1.3% year-on-year for 2022, following a sharp 6% rise in 2021 as lockdown restrictions eased. The IEA is now expecting emissions to plateau until 2025 before dropping, whereas, previously, it had been expecting a decrease between 2022 and 2025.

This is a concern for global climate efforts. The Intergovernmental Panel on Climate Change (IPCC) has concluded that, to give the best chance of holding the global temperature increase below 1.5C, global emissions will need to decrease by at least 45% by 2030. The power sector is often regarded as the basis for decarbonisation elsewhere; its own low-carbon transition enables transitions in sectors such as transport, heat and heavy industry.

The IEA’s prediction is that the share of renewables in the global electricity mix will rise from 29% in 2022 to 35% in 2025. China is set to be the market that will install the most renewable electricity generation capacity during this timeframe, followed by the EU 27.

The share of natural gas and coal is expected to remain broadly flat, the IEA is predicting.

Progress in Europe, offset elsewhere

While gas-fired generation is set to decline in the EU in the near term, the report notes that there was an uptick in 2022. It concludes that this will be temporary and that coal and gas will decline by more than 10% annually in the next three years across the bloc.

The IEA is forecasting that “significant growth” in gas-fired generation in the Middle East that will almost entirely offset this. The Agency is also expecting that, at least in the short term, the decrease in coal-fired generation in Europe, North America and South America will be matched by an increase in the Asia-Pacific region.

A similar trend is seen regarding efforts to improve energy efficiency and reduce electricity consumption. The EU recorded a 3.5% decrease in electricity consumption year-on-year for 2022, with policy interventions relating to building retrofit and behaviour change implemented as part of efforts to wean the bloc off of Russian fossil fuel imports by 2027.

Yet, in India, an 8.4% increase year-on-year in electricity demand was recorded. The IEA attributes this partly to a strong economic recovery from Covid-19, but also notes that “exceptionally high” summer temperatures led to a spike in demand for cooling. India and Pakistan recorded their hottest March since 1901 in 2022, with unseasonably early and intense heatwaves heavily impacting agriculture and resulting in at least 90 deaths.

The IEA also recorded a 2.6% electricity demand increase in the US and the same level of increase in China. It explains in the report that demand is increasing in emerging markets and developed markets alike, as the former category of nations industrialise and improve energy access, and as the latter strive to electrify sectors such as heat and transport.

Through to 2025, the IEA expects more than 70% of the growth in global electricity demand to come from China, India and Southeast Asia.


(www.edie.net, 8 February, 2023)

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