Home Investing News Emissions set to rise with global power demand – IEA

Emissions set to rise with global power demand – IEA

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(C) Reuters. FILE PHOTO: Chimneys of a coal-fired power plant are seen behind a gate in Shanghai, China October 21, 2021. REUTERS/Aly Song/File Photo

PARIS (Reuters) – Global electricity demand over the next few years is set to slow after a record 2021 but will still result in higher carbon emissions without rapid gains in low-carbon supply and energy efficiency, the International Energy Agency (IEA) said on Friday.

Global electricity demand rose by 6% or 1,500 terawatt hours (TWh) in 2021, the largest percentage gain since the recovery from a global financial crisis in 2010 and the largest total rise on record, the agency said in its annual report on the electricity sector.

China accounted for about half of the increase in global electricity demand last year with a 10% rise.

However, global electricity demand is expected to slow in the next few years as energy efficiency measures take effect and economic recovery slows.

It is forecast to increase by 2.7% on average to 2024, though the effects of the coronavirus pandemic and high energy prices are still uncertain, the report said.

South East Asia is expected to see the strongest electricity demand, growing by an average 5% between 2022 and 2024, followed by the Asia Pacific region, which includes China, at around 4% over that period, slightly below pre-pandemic levels.

Demand in North America and Latin America, is seen rising by around 1% over 2022-2024, with the largest percentage gains in Mexico and Canada at 3-4% a year.

Europe is set to register 1.7% growth in 2022 and then stay flat in 2023 and 2024. (Graphic: Regional electricity demand growth forecast to 2024 – IEA, https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnjmklpq/Regional%20electricity%20demand%20growth%20forecast%20to%202024.png)

EMISSIONS

Power sector carbon dioxide emissions climbed 7% to a record high in 2021 after falling the previous two years.

Although slower electricity demand growth and the rise of low-carbon generation should limit emissions growth to less than 1% per year between 2022 and 2024, emissions need to fall sharply to meet net zero targets by 2050, the report said.

To fulfill its role in de-carbonizing the energy system, the electricity sector needed big improvements in energy efficiency and low-carbon supply, IEA said.

Fossil fuel generation is set to stagnate over the next three years while renewables are expected to grow 8% per year through 2024, and account for over 90% of total demand growth over that period.

Commenting on the report, David Jones, the global lead for independent climate think tank Ember said: “Failure to build enough new clean electricity to keep up with demand will slow the phase-out of coal-fired and gas-fired electricity; a mistake we cannot afford to make for the climate.”

On the electricity supply side, most of the growth to 2024 is expected in China, accounting for around half of the net total increase, followed by India at 12%, Europe at 7% and the United States at 4%.

Last year, a surge in consumption, combined with a reduced natural gas and coal supply, resulted in volatile power prices and negative effects on power generators, retailers and end- users in China, Europe and India, the IEA said.

The IEA’s price index for major wholesale electricity markets in 2021 nearly doubled compared to 2020, up 64% from the average over 2016 to 2020. In Europe, fourth quarter 2021 prices were over four times the 2015-2020 average.

“Sharp (OTC:SHCAY) spikes in electricity prices in recent times have been causing hardship for many households and businesses around the world and risk becoming a driver of social and political tensions,” said IEA Executive Director Fatih Birol.

The IEA did not provide detail on where price volatility might be most concentrated over the next few years.

Emissions set to rise with global power demand – IEA

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