China provides the largest share of global electricity demand growth in terms of volume, but India posts the fastest growth rate through 2026 among major economies. Following a 7% increase in India's electricity demand in 2023, we expect growth above 6% on average annually until 2026, supported by strong economic activity and expanding ownership of air conditioners. Over the next three years, India will add electricity demand roughly equivalent to the current consumption of the United Kingdom. While renewables are set to meet almost half of this demand growth, one-third is expected to come from rising coal-fired generation. We also expect Southeast Asia to see robust annual increases in electricity demand of 5% on average through 2026, led higher by strong economic activity.

While electricity use per capita in India and Southeast Asia is rapidly rising, it has been effectively stagnant in Africa for more than three decades. Per capita consumption in Africa even declined in recent years as the population grew faster than electricity supply was made available, and we only expect it to recover to its 2010-15 levels by the end of 2026 at the earliest. Thirty years ago, a person in Africa consumed more electricity on average than someone living in India or Southeast Asia. However, strong increases in electricity demand and supply in India and Southeast Asia in recent decades - which have gone hand in hand with a boom in economic development - have transformed these regions at a spectacular pace. Meanwhile, Africa's per capita electricity consumption in 2023 was half that of India and 70% lower than in Southeast Asia. Our forecast for Africa for the 2024-26 period anticipates average annual growth in total electricity demand of 4%, double the mean growth rate observed between 2017 and 2023. Two-thirds of this growth in demand is set to be met by expanding renewables, with the remainder covered mostly by natural gas.

Electricity demand in the United States fell by 1.6% in 2023 after increasing 2.6% in 2022, but it is expected to recover in the 2024-26 outlook period. A key reason for the decline was milder weather in 2023 compared with 2022, though a slowdown in the manufacturing sector was also a factor. We forecast a moderate increase in demand of 2.5% in 2024, assuming a reversion to average weather conditions. This will be followed by growth averaging 1% in 2025-26, led by electrification and the expansion of the data centre sector, which is expected to account for more than one-third of additional demand through 2026.

 

Key Highlights of International Energy Agency (IEA) Electricity Report 2024 :

Continued Reliance on Coal:

·        India is projected to rely on coal to meet rising electricity demand through 2026

·        Coal-fired generation is expected to meet 68% of India's electricity demand by 2026, despite a decrease from 74% in 2023.

·        Coal-fired power generation is expected to rise by 2.5% annually (2024-2026)

·        Despite India's net-zero target by 2070, coal is expected to dominate, meeting 68% of demand

 

Renewable Generation:

• Renewable energy (RE) generation remained relatively stable, with a 21% share of electricity generation in 2023. The rise in solar and wind was largely offset by reduced hydropower output

 

• Close to 21 gigawatts (GW) of RE capacity was added during 2023, with RE accounting for nearly 44% of total installed capacity in 2023

 

Electricity Demand Dynamics:

• India's electricity demand rose by 7% in 2023, driven by rapid economic growth and Increased space cooling needs.

• Expected annual average growth of 6.5% between 2024 and 2026.

• India's electricity demand is projected to outpace China's by 2026, with the world's fastest growth rate

 

 Global Comparison and Emerging Economies:

• China holds the largest volume of expected growth. India's electricity demand in the three years might nearly be equivalent to the United Kingdom's

• Developed economies reported substantial reductions in manufacturing and industrial output, and high inflation

About 85% of new electricity capacity is expected from emerging economies, particularly in South Asia, with China and India in the lead

 

Hydropower Challenges and Mandates:

·        Changing weather patterns led to a 15% fall in hydropower generation in 2023

·        To ensure uninterrupted power supply, the government mandated a blending of a minimum of 6% of imported coal with domestic coal until March 2024

 

Diversification Efforts:

 

·        Besides adding wind and solar power capacity, large hydro and nuclear power projects are being developed in the country.

 

Nuclear Power Surge:

·        More than half of the nuclear power plants in the pipeline globally (between 2024- 2026) are in China and India.

·        IEA forecasts global nuclear generation will be almost 10% higher in 2026, compared to 2023

 

·        India announced plans in 2022 to triple its nuclear capacity by 2032, aiming to add 13 GW with 6 GW currently under construction.

·        India currently has 23 operable nuclear reactors providing about 2% of the country's electricity

·        Report highlighted that the largest domestically built nuclear power plant, the 700 MWe Kakrapar Unit 3 reactor, commenced operations in Gujarat in June 2023 and reached full capacity in August 2023

 

·         Based on the country's project timeline, Nuclear power generation is expected to increase rapidly during 2024-2026, with new plants totalling an estimated 4 GW of capacity entering commercial operation".

 

·        Global Nuclear Landscape:

 

·        According to the World Nuclear Association estimates as of November 2023, 68 GW of nuclear capacity is under construction, 9 GW is currently planned and 353 GW is proposed

 

·         Asia is expected to surpass North America's nuclear power growth by 2026, reaching a 30% share of global nuclear generation.

 

·        Small Modular Reactor (SMR) Technology

·         The report highlighted that momentum is growing behind small modular reactor (SMR) technology

·        SMRs are advanced nuclear reactors that have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors.

 

·        SMRs, which can produce a large amount of low-carbon electricity, are:

·        Small: physically a fraction of the size of a conventional nuclear power reactor

·        Modular: making it possible for systems and components to be factory- assembled and transported as a unit to a location for installation

·        Reactors: harnessing nuclear fission to generate heat to produce energy

 

·        The SMR Technology development and deployment are progressing, but not without challenges R&D is starting to accelerate

Resources Used:

Information – International Energy Agency (IEA)

https://www.iea.org/reports/electricity-2024/executive-summary

Drishti IAS

https://www.drishtiias.com/daily-updates/daily-news-analysis/iea-report-electricity-2024#:~:text=What%20are%20the%20Key%20Highlights,decrease%20from%2074%25%20in%202023

Picture – International Energy Agency (IEA)