Renewables and nuclear set to cover global growth in electricity demand, IEA says
Energize Weekly, February 15, 2023
New renewable and nuclear generation is set to meet 90 percent of the growing demand for electricity globally during the next three years, while increasing extreme weather will test grid resilience, according to the International Energy Agency’s (IEA) annual Electricity Market Report.
After a slowing in the growth of global electricity demand last year to 2 percent, the IEA said a rebound in economic activity will also lead to a 3 percent annual growth over the next three years, leading to a 2,500 terawatt-hour (TWh) increase in 2025.
More than 70 percent of the increase in global electricity demand over those three years is projected to come from China, India, and Southeast Asia, with China accounting for a third of global demand by 2025.
Almost all the new demand will be met with carbon-free power generation. Renewable generation – primarily wind and solar – will rise to 35 percent of the generation mix in 2025 from 29 percent in 2022.
At the same time, the accelerated deployment of nuclear is meeting demand primarily in Asia. As a result, global nuclear power is forecast to grow an average of 4 percent between 2023 and 2025.
Each year from now until 2025 about 100 TWh of additional electricity will be produced by nuclear power, the IEA said.
More than half the growth in global nuclear generation to 2025 will be in four countries: China, India, Japan, and Korea
In 2022, nuclear power accounted for 10 percent of the global generation mix.
“The good news is that renewables and nuclear power are growing quickly enough to meet almost all this additional appetite, suggesting we are close to a tipping point for power sector emissions,” Fatih Birol, IEA’s executive director, said in a statement.
The IEA projects coal-fired and natural gas-fired generation to remain flat through 2025 as declines in Europe and North America will be offset by increases in fossil fuel generation in the Middle East and the Asia-Pacific region.
“This means that after reaching an all-time high in 2022, carbon dioxide emissions from global power generation are set to remain around the same level through 2025,” the report said.
There is additional variable that must be accounted for, the IEA said, as both electricity supply and demand are increasingly weather dependent.
In 2022, Europe suffered from drought that hurt hydropower output, and India was racked with heat waves, including the hottest March in a century, leading to the country’s highest peak electricity demand ever.
China was hit by both drought and heat waves causing demand for air conditioning to surge, while there was a reduction in hydropower generation in Sichuan. The United States saw severe winter storms in December, triggering massive power outages.
The entire grid will become more sensitive to such events with an energy transition that includes increased electrification for heating and cooling leading to added demand for electricity, while the share of weather-dependent renewables will continue to be come a bigger part of the generation portfolio.
“In such a world, increasing the flexibility of the power systems while ensuring security of supply and resilience will be crucial,” the IEA said.