The International Energy Agency estimates that low-emissions electricity sources will be able to meet the rapidly increasing demand for electricity over the next three years.
The IEA report, Electricity 2024, projects that electricity demand will rise by about 3.4% from 2024 to 2026, but the rapid deployment of renewable energy and nuclear power is on track to outpace this growth. These low-emissions energy sources are expected to meet about half of the world’s electricity generation by 2026, up from about 40% in 2023. As a result, the power sector’s global emissions are expected to fall by 2.4% this year and decrease by similar levels in both 2025 and 2026.
This increase in electricity generation from renewables and nuclear power is reportedly pushing power sector emissions to structural decline -- renewables are set to overtake coal by early 2025, while nuclear energy generation is expected to reach an all-time global high by the same year. The IEA also said that fossil fuel generation is expected to fall under 60% of total power generation for the first time in over five decades of IEA records.
“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,” said Fatih Birol, executive director of the IEA.
The IEA report found that the majority of electricity demand growth comes from outside advanced economies, mainly from China, India, and countries in Southeast Asia. Meanwhile, demand for electricity in Europe and the United States declined in 2023.
China has seen extreme growth in solar energy generation, commissioning as much solar power in 2023 as the rest of the world did in 2022. China’s renewables expansion is expected to suppress coal-fired output, but India and Southeast Asia are set to experience a rise in coal-powered energy generation. India has also indicated plans to double its coal production capacity by 2030, as the country is set to experience the fastest energy demand growth of all major economies.
The World Economic Forum recently established an alliance to address clean energy needs in developing countries, especially as 90% of investment growth in renewables since 2021 has been directed to China and advanced economies. Alliance members include representatives from India and many African countries.
In the new report, the IEA said that Africa has remained an outlier in electricity demand trends for over 30 years as the continent's energy demand has stayed generally the same. As electricity is used as a key indicator of economic development, the IEA calls for the international community to address energy needs in Africa to achieve their economic and climate goals.
The UN has identified an investment gap of about $4 trillion in sustainable investment for developing economies and claims that private investment in such economies is a key piece of meeting Paris Agreement goals.
