The global electricity demand increased by 6 per cent in 2021 on the back of strong economic growth combined with colder winters and warmer summers, the International Energy Agency (IEA) has revealed.
According to the most recent IEA electricity report, this development follows a small drop in 2020 as a result of the financial crisis’s recovery.
“It was the largest ever annual increase in absolute terms which represents over 1 500 Terawatt-hour (TWh) and the largest percentage rise since 2010 after the financial crisis,” the report states.
While noting this, the report also revealed that China accounted for roughly half of global growth, with demand increasing by an estimated 10 per cent.
Furthermore, it demonstrates that the industrial sector contributed the most to demand growth, followed by the commercial and services sectors, and finally the residential sector.
The report’s data also revealed that average wholesale electricity prices in the fourth quarter of 2021 were more than four times higher than the 2015-2020 average.
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According to the IEA, this is due to particularly high gas prices in Europe, where gas accounts for 20 per cent of the generation mix.
In addition, coal accounted for more than half of the increase in global demand. Coal-fired electricity generation reached an all-time high, increasing by 9 per cent, and the fastest rate since 2011, driven by high demand and coal’s cost competitiveness in some markets compared to gas.
Meanwhile, it was noted that renewables grew strongly, by 6 per cent, despite growth being hampered by unfavourable weather conditions in particular for hydropower.
While gas-fired generation increased by 2 per cent, nuclear increased by 3.5 per cent, nearly matching 2019 levels.
CO2 emissions from electricity increased by nearly 7 per cent in total, reaching a new high, according to the report.
“We expect coal-fired generation to fall slightly as phase-outs and declining competitiveness relative to natural gas in markets like the United States and Europe are offset by growth in China and India. Gas-fired generation is forecast to grow annually by around 1 per cent,” the IEA said.
