Global electricity demand may accelerate over the next three years, growing by an average 3.4% annually through 2026, an International Energy Agency (IEA) report said, while pointing out that China, India, and other Southeast Asian countries fueled robust consumption last year.
The study said that while China provides the largest share of global electricity demand growth in terms of volume, India will post the fastest growth rate through 2026 among major economies
Over the next three years, India will add electricity demand roughly equivalent to the current consumption of the United Kingdom, the IEA report said, adding that while renewables are set to meet almost half of this demand growth, one-third is expected to come from rising coal-fired generation.
The trend of rising electricity demand will continue in India as the country posts the fastest growth rate in electricity usage of above 6% annually until 2026, higher than the global average of 3.4% for the next three years, it added.
The report, titled Electricity 2024, drew parallels with Africa, noting that in 2023, the continent’s per capita electricity consumption was only half that of India and 70% less than that of Southeast Asia
The rapid growth of renewables, supported by rising nuclear generation, is set to displace global coal-fired generation, which is forecast to fall by an average of 1.7% annually through 2026.
Nuclear generation is projected to grow by nearly 3% annually through 2026, despite some countries phasing out nuclear power or retiring plants early.
This growth is expected as France completes maintenance works, Japan restarts nuclear production at several plants, and new reactors commence commercial operations in markets including China, India, Korea, and Europe.
Carbon emission from electricity generation is expected to drop by more than 2% in 2024 after rising by 1% in 2023 on solid growth in coal-fired generation in 2023 due to slashed hydropower output, especially in China and India. The drop in emission from electricity generation will continue to decline in 2025 and 2026, the study added.
The increase in global electricity usage dropped to 2.2% in 2023 as opposed to 2.4% in 2022 from the year earlier. The report said Southeast Asia will see a 5% average rise in the region’s electricity demand by 2026.
Given India’s rapid increase in demand for electricity, coal-fired power generation is expected to rise by an average of 2.5% annually in 2024-26. At the same time, renewable generation will accelerate, with an average annual growth rate of 13% in India. Similarly, coal-fired generation is set to increase annually on average by about 4% out to 2026 in Southeast Asia. Renewables are expected to grow at a higher average rate of 7%, and gas-fired output is expected at about 5% in the region.
India reported a 1.6% rise in the country’s coal-fired output in 2023 amid droughts; China, too, reported a drop in its hydropower output and thus increased coal-fired generation in the last year.
The IEA report said global hydropower generation declined in 2023 amid droughts, below-average rainfall, and early snowmelts in numerous regions.Canada, China, Colombia, Costa Rica, India, Mexico, Türkiye, the United States, Vietnam, and others saw hydropower generation decline.
This offset substantial declines in coal-fired generation in the US and EU. IEA electricity report stressed the evolving trends in China, where more than half of the world’s coal-fired generation occurs.
Wholesale electricity prices in many countries dropped last year from the record highs observed in 2022 with the reduction in natural gas and coal prices. However, regional differences were observed in the electricity prices. Wholesale electricity prices in Europe dropped by 50% in 2023 from 2022, whereas US prices in 2023 were only about 15% higher than in 2019. Wholesale prices in Japan and India remained above 2019 levels in 2023.
IEA report mentioned that as clean electricity supply continues to expand rapidly, the share of fossil fuels in global generation is forecast to decline from 61% in 2023 to 54% in 2026, falling below 60% for the first time in IEA records dating back to 1971.
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