Global electricity demand is growing faster than renewable energy capacity can be rolled out and will require more power to be generated from the burning of fossil fuels, the International Energy Agency (IEA) said in a report on July 15.
After falling by about 1% in 2020 when the COVID-19 pandemic curbed industrial activity across the world, power consumption is set to grow by close to 5% in 2021 and by 4% in 2022 as economies recover, the IEA said in the mid-2021 edition of its Electricity Market Report.
Nearly half of the increase will have to be met by burning fossil fuels, notably coal, which could push CO₂ emissions from the sector to record highs in 2022, the agency said, adding it expects particularly strong demand in the Asia Pacific region, primarily China and India.
Renewables are expanding quickly as the global community addresses the need to reduce carbon pollution, but the IEA's report shows the process will have to accelerate if cleaner energy is to keep up with overall demand.
Renewable capacity, including hydropower, wind and solar photovoltaics, is on track for 8% growth in 2021 and more than 6% in 2022, while virtually emissions-free nuclear will increase by 1% and 2% respectively.
“Even with this strong growth, renewables will only be able to meet around half the projected increase in global electricity demand over those two years,” the IEA said.
“To shift to a sustainable trajectory, we need to massively step up investment in clean energy technologies—especially renewables and energy efficiency,” it said.
The IEA also predicted that CO₂ emissions from burning coal and gas were likely to increase by 3.5% in 2021 and by 2.5% in 2022.
Turning to wholesale power prices, the IEA noted a rise of 54% in first half 2021 in advanced economies, compared with the same period in 2020.
Full year average prices last year declined by a quarter from 2019.
The IEA also noted that extreme cold, heat and drought have caused disruptions to electricity supply this year, notably the Texas power crisis in February.
Recommended Reading
BP’s Kate Thomson Promoted to CFO, Joins Board
2024-02-05 - Before becoming BP’s interim CFO in September 2023, Kate Thomson served as senior vice president of finance for production and operations.
Magnolia Oil & Gas Hikes Quarterly Cash Dividend by 13%
2024-02-05 - Magnolia’s dividend will rise 13% to $0.13 per share, the company said.
TPG Adds Lebovitz as Head of Infrastructure for Climate Investing Platform
2024-02-07 - TPG Rise Climate was launched in 2021 to make investments across asset classes in climate solutions globally.
HighPeak Energy Authorizes First Share Buyback Since Founding
2024-02-06 - Along with a $75 million share repurchase program, Midland Basin operator HighPeak Energy’s board also increased its quarterly dividend.
Occidental Increases Annual Dividend by 22%
2024-02-11 - Occidental Petroleum Corp.’s newly declared dividend is at an annual rate of $0.88 per share, compared to the previous annual rate of $0.72 per share.