Focus Around the world

25.01.2024

Global Electric Market: For the first time in 50 years, the share of fossil fuels will fall below 60%

The new IEA report on electricity demand and the global electric market underscores a significant development in renewable energies

The International Energy Agency (IEA) recently published the "Electricity 2024" report, an analysis offering detailed forecasts on changes in the electric energy market until 2026, covering topics like demand, supply, and CO2 emissions.

The report states that global electricity demand is set to grow at an accelerated pace over the next 3 years, largely due to the transition towards clean energy, gaining momentum worldwide.

It's estimated that nearly all the additional demand will be met by low-emission sources.

 

World Electric Market: after over 50 years, the share of fossil fuels will fall below 60%

2023 saw a slight decrease in the growth of electricity demand, calculated at 2.2%, mainly due to a drop in consumption in advanced economies. However, this trend is expected to reverse, with an average annual growth of 3.4% from 2024 to 2026.

About 85% of this increase comes from countries outside the advanced economies, with China, India, and Southeast Asian nations leading.

Despite the growing demand, a significant change is observed in electricity production sources. Renewable sources, such as solar, wind, and hydroelectric power, along with nuclear energy, are gaining ground, reducing dependence on fossil fuels.

By 2026, it's predicted that these low-emission sources will cover nearly half of the world's electricity production, up from a 40% share in 2023.

Clean energies, in particular, according to the report's expectations, will constitute over a third of the total electricity production at the beginning of 2025, surpassing coal.

Nuclear energy is expected to reach record global levels by 2025, thanks to new plants in countries like China, India, Korea, and in Europe, along with renewed contributions from France and the restarting of plants in Japan.

For the first time in over 50 years, the share of fossil fuels in global electricity production will drop below 60%.

 

World Electric Market: the decrease of global CO2 emissions

Fatih Birol, executive director of the IEA, emphasizes the importance of these trends: "The rapid expansion of renewable energies, driven by the growing affordability of solar energy, along with the return of nuclear energy, is fundamental to meet the growing global demand for electricity. Although further rapid progress is needed, these trends are very promising."

The report also highlights a decrease in global CO2 emissions in the electricity sector, with a predicted reduction of 2.4% in 2024 and further declines in the following two years. This phenomenon is particularly significant in a context of increasing electrification of the economy, with the rise of technologies such as electric vehicles and heat pumps.

Electricity demand decreased for the second consecutive year in the EU in 2023, with forecasts of a return to pre-global energy crisis levels only by 2026. China is expected to represent the largest share of the global demand increase in volume terms, despite a slowdown in economic growth and reduced dependence on heavy industry.

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