Global electricity demand is rising at its fastest rate in two decades, but solar is on course to meet half of demand growth, says the IEA.
Global electricity demand is forecast to grow by around 4% in 2024, up from 2.5% in 2023, according to the International Energy Agency’s (IEA) newly released “Electricity Mid-Year Update” report. This would represent the highest annual growth rate since 2007, except for rebounds after the global financial crisis and the pandemic. The increase in global electricity consumption is set to continue into 2025, with growth at around 4% again, according to the report.
Renewables are also set to expand rapidly this year and next, with their share of global electricity supply forecast to rise from 30% in 2023 to 35% in 2025. The amount of electricity generated by renewables worldwide in 2025 is forecast to eclipse the amount generated by coal for the first time. Solar alone is expected to meet roughly half of the growth in global electricity demand in 2024 and 2025 – with solar and wind combined meeting as much as 75% of growth.
Despite the rapid renewables increase, global power generation from coal is unlikely to drop this year due to demand growth, especially in China and India, according to the report. As a result, CO2 emissions from the global power sector are plateauing, with a slight increase in 2024 followed by a decline in 2025. However, there are still unknowns: Chinese hydropower production recovered strongly in the first half of 2024 from its 2023 low. If this upward trend continues in H2 2024, it could curb coal-fired power generation and result in a slight decline in global power sector emissions this year.
Power demand in India is expected to surge by a whopping 8% this year, thanks to strong economic activity and intense heatwaves. China is also set to see more than 6% demand growth because of robust activity in the services industries and various industrial sectors, including clean energy manufacturing.
Multiple regions faced intense heatwaves in H2 2024, which elevated air conditioning demand and strained electricity systems.
After declining in 2023 amid mild weather, electricity demand in the US is forecast to rebound in 2024 by 3% amid steady economic growth, rising demand for cooling, and an expanding data center sector. (The IEA’s report highlights a wide range of uncertainties concerning the electricity demand of data centers, including the pace of deployment, the diverse and expanding uses of AI, and the potential for energy efficiency improvements.)
The EU will see a more modest recovery in electricity demand, with growth forecast at 1.7%, following two consecutive years of contraction amid the impacts of the energy crisis.
London-based renewables thinktank Ember’s insight director, Dave Jones, said in response to the IEA’s “Electricity Mid-Year Update” report:
We’re heading fast toward an electric future, with so much of the rise in energy demand coming from electricity. Renewable electricity has a dual role – not only to replace coal and gas power plants – but also to meet this rise in electricity demand. Therefore, we need to be building renewables at double speed, to make power sector emissions fall as fast as they need to.
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