International Energy Agency (IEA)
says - Electricity is central to the functioning of modern societies and economies - and its importance is only growing as technologies that run on electricity, such as electric vehicles and heat pumps, become increasingly popular. Power generation is currently the largest source of carbon dioxide (CO©ü) emissions in the world, but it is also the sector leading the transition to net zero emissions through the rapid expansion of renewable energy sources such as solar and wind power. Ensuring consumers have secure and affordable access to electricity while also reducing global carbon dioxide (CO©ü)
emissions is one of the core challenges of the energy transition.
Given these trends, the International Energy Agency's Electricity 2024 is essential reading. It offers a deep and comprehensive analysis of recent policies and market developments, and provides forecasts through 2026 for electricity demand, supply and CO2 emissions. The IEA's electricity sector report, which has been published regularly since 2020, provides insight into the evolving generation mix. In addition, this year's report features in-depth analysis on the drivers of recent declines in electricity demand in Europe, the data center sector's impact on electricity consumption; and recent developments in the global nuclear power sector
Global electricity demand rose moderately in 2023 but is set to grow faster through 2026 - Falling electricity consumption in advanced economies restrained growth in global power demand in 2023. The world's demand for electricity grew by 2.2% in 2023, less than the 2.4% growth observed in 2022. While China, India and numerous countries in Southeast Asia experienced robust growth in electricity demand in 2023, advanced economies posted substantial declines due to a lacklustre macroeconomic environment and high inflation, which reduced manufacturing and industrial output.
Global electricity: demand is expected to rise at a faster rate over the next three years, growing by an average of 3.4% annually through 2026 : The gains will be driven by an improving economic outlook, which will contribute to faster electricity demand growth both in advanced and emerging economies. Particularly in advanced economies and China, electricity demand will be supported by the ongoing electrification of the residential and transport sectors, as well as a notable expansion of the data centre sector. The share of electricity in final energy consumption is estimated to have reached 20% in 2023, up from 18% in 2015. While this is progress, electrification needs to accelerate rapidly to meet the world's decarbonization targets. In the IEA's Net Zero Emissions by 2050 Scenario, a pathway aligned with limiting global warming to 1.5 ¡ÆC, electricity's share in final energy consumption nears 30% in 2030.
Electricity consumption from data centers, artificial intelligence (AI) and the cryptocurrency sector could double by 2026. Data centres are significant drivers of growth in electricity demand in many regions. After globally consuming an estimated 460 terawatt-hours (TWh) in 2022, data centres' total electricity consumption could reach more than 1000 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.
Emerging and developing economies are the engines of global electricity demand growth - About 85% of additional electricity demand through 2026 is set to come from outside advanced economies, with China contributing substantially even as the country's economy undergoes structural changes. In 2023, China's electricity demand rose by 6.4%, driven by the services and industrial sectors. With the country's economic growth expected to slow and become less reliant on heavy industry, the pace of Chinese electricity demand growth eases to 5.1% in 2024, 4.9% in 2025 and 4.7% in 2026 in our forecasts. Even so, the total increase in China's electricity demand through 2026 of about 1400 TWh is more than half of the European Union's current annual electricity consumption. Electricity consumption per capita in China already exceeded that of the European Union at the end of 2022 and is set to rise further. The rapidly expanding production of solar PV modules and electric vehicles, and the processing of related materials, will support ongoing electricity demand growth in China while the structure of its economy evolves.
Referance: International Energy Agency (IEA)
https://www.iea.org/reports/electricity-2024
picture credit - International Energy Agency (IEA)
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