FRANKFURT (Germany): Global electricity demand is growing faster than renewable energy capacity can be rolled out and will require more power to be generated from the burning of fossil fuels, the International Energy Agency (IEA) said in a report on Thursday.
After falling by about 1% in 2020 when the COVID-19 pandemic curbed industrial activity across the world, power consumption is set to grow by close to 5% in 2021 and by 4% in 2022 as economies recover, the IEA said in the mid-2021 edition of its Electricity Market Report.
Nearly half of the increase will have to be met by burning fossil fuels, notably coal, which could push carbon dioxide emissions from the sector to record highs in 2022, the agency said, adding it expects particularly strong demand in the Asia Pacific region, primarily China and India.
Renewables are expanding quickly as the global community addresses the need to reduce carbon pollution, but the IEA’s report shows the process will have to accelerate if cleaner energy is to keep up with overall demand.
Renewable capacity, including hydropower, wind and solar photovoltaics, is on track for 8% growth in 2021 and more than 6% in 2022, while virtually emissions-free nuclear will increase by 1% and 2% respectively.
“Even with this strong growth, renewables will only be able to meet around half the projected increase in global electricity demand over those two years,” the IEA said.
“To shift to a sustainable trajectory, we need to massively step up investment in clean energy technologies – especially renewables and energy efficiency,” it said.
CO2 emissions from burning coal and gas were likely to increase by 3.5% in 2021 and by 2.5% in 2022, it predicted.
Turning to wholesale power prices, the IEA noted a rise of 54% in first half 2021 in advanced economies, compared with the same period in 2020.
Full year average prices last year declined by a quarter from 2019.
The IEA also noted that extreme cold, heat and drought have caused disruptions to electricity supply this year, notably the Texas power crisis in February.