Global electricity demand is expected to grow at a faster rate over the next three years with low-emission technologies covering the increase, according to a new report from the IEA.
Electricity 2024 is the latest edition of the IEA’s annual analysis of electricity market developments and policies, providing forecasts for demand, supply and carbon dioxide (CO2) emissions from the sector through 2026.
The report found while global growth in electricity demand eased slightly to 2.2% in 2023 due to falling electricity consumption in advanced economies, it is projected to accelerate to an average of 3.4% from 2024 through 2026.
About 85% of the increase in the world’s electricity demand through 2026 is expected to come from outside advanced economies – most notably China, India and countries in Southeast Asia.
However, record-setting electricity generation from low-emissions sources – comprising renewables, such as solar, wind and hydro, as well as nuclear power – should reduce the role of fossil fuels in providing power for homes and businesses, IEA said.
Low-emissions sources are expected to account for almost half of the world’s electricity generation by 2026, up from a share of just under 40% in 2023.
Renewables are set to make up more than one-third of total electricity generation by early 2025, overtaking coal, according to the analysis.
By 2025, nuclear power generation is also forecast to reach an all-time high globally as output from France climbs, several plants in Japan come back online, and new reactors begin commercial operations in many markets, including in China, India, Korea and Europe.
When the share of fossil fuels in global generation falls beneath 60%, this will mark the first time it has gone below this threshold in IEA records dating back more than five decades.
IEA executive director Fatih Birol (pictured) said: “The power sector currently produces more CO2 emissions than any other in the world economy, so it’s encouraging that the rapid growth of renewables and a steady expansion of nuclear power are together on course to match all the increase in global electricity demand over the next three years.
This is largely thanks to the huge momentum behind renewables, with ever cheaper solar leading the way, and support from the important comeback of nuclear power, whose generation is set to reach a historic high by 2025.
“While more progress is needed, and fast, these are very promising trends.”
The report found the increase in electricity generation from renewables and nuclear appears to be pushing the power sector’s emissions into structural decline.
Global emissions from electricity generation are expected to decrease by 2.4% in 2024, followed by smaller declines in 2025 and 2026, according to the analysis.
During the outlook period, China is expected to account for the largest share of the global increase in electricity demand in terms of volume, even as its economic growth slows and becomes less reliant on heavy industry.
Meanwhile, India is set to see electricity demand rise the fastest among major economies, with demand added over the next three years forecast to be roughly equivalent to the current electricity consumption of the United Kingdom.
As a region, Africa remains an outlier in electricity demand trends, according to the report’s analysis.
While electricity use per capita in India and Southeast Asia has risen rapidly, it has been effectively stagnant in Africa for more than three decades.
Birol said: “Electricity use is a key indicator of economic development in any country, and it’s a grim sign that it has flatlined in Africa on a per capita basis for over three decades.
“Access to reliable, affordable and sustainable energy for all citizens is essential for African countries to achieve their economic and climate goals.
“The international community needs to work together with African governments to enable the urgent progress that is needed.”