Electricity Market Report '21 by IEA
The latest version of the electricity market report by the International Energy Agency (IEA) analyzes current trends and estimates demand, capacity, supply, and emissions through 2022. The document also examines and forecasts power market pricing as well as electrical security.
Here we present a useful summary:
Global electricity demand will rebound strongly in 2021 and 2022, as it is set to grow by close to 5% in 2021 and by 4% in 2022. More than half of global growth in 2022 will occur in the People’s Republic of China, the world’s largest electricity consumer. India, the third-largest consumer, will account for 9% of global growth.
Controversial updates for the generation side, as renewable electricity continues to grow strongly – +8% in 2021 +6% in 2022 – but cannot keep up with increasing demand. Despite these rapid increases, renewables are expected to be able to serve only around half of the projected growth in global demand in 2021 and 2022. Fossil fuel-based electricity is set to cover 45% of additional demand in 2021 and 40% in 2022. Coal-fired electricity generation, after declining by 4.6% in 2020, will increase by almost 5% in 2021 to exceed pre-pandemic levels. It will grow by a further 3% in 2022 and could set an all-time high. Also gas-fired generation is expected to grow – +1% in 2021 and +2% in 2022.
Obviously, due to the increase in hydrocarbon use, CO2 emissions from the electricity sector are set to increase, +3.5% in 2021 and +2.5% in 2022, which would take them to an all-time high. The decline in the emissions intensity of global electricity generation slows from more than 3% in 2020 to around 1% in 2021 and 2022.
Other important observations from this IEA report:
- Stronger policy actions are needed to reach climate goals.
- Wholesale electricity prices have recovered.
- Recent extreme weather events have threatened security of supply.
- Higher shares of variable renewables are having a measurable impact on the operation and design of electricity systems.
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Find here the full IEA's Electricity Market Report ‘21.