Renewables and nuclear power are poised to meet all additional global electricity demand over the next three years, according to the International Energy Agency (IEA).
The insight comes from the IEA’s latest report, Electricity 2024, which aims to provide comprehensive analysis of recent policies and market developments, and provides forecasts through 2026 for electricity demand, supply and CO2 emissions.
According to the report, while electricity demand is expected to grow at an average of 3.4% from 2024 to 2026, particularly in emerging economies like China, India, and Southeast Asia, a positive trend emerges: low-emissions sources are on track to meet this entire demand increase.
With a projected growth surpassing coal by early 2025, renewables are expected to account for nearly half of global electricity generation by 2026, up from 40% in 2023. This coincides with a projected decline in the fossil fuel share, dropping below 60% for the first time in IEA records.
Nuclear power also plays a crucial role. Global nuclear generation is expected to reach an all-time high by 2025, driven by increased output in France and Japan, coupled with new reactors coming online in various markets. The news follows the unfortunate announcement that UK-based facility Hinkey Point C could be delayed by a further four years, and cost £2.3bn more.
The report suggests that combined, the growth in renewables and nuclear power is pushing power sector emissions into structural decline, with global emissions from electricity generation expected to decrease for the next three years.
But despite the positive outlook, the report warns that regional disparities exist. While Europe and the US experienced declining demand due to the global energy crisis, emerging economies, particularly China, India, and Southeast Asia, saw robust growth fuelled by population and industrialisation.
Africa also remains a critical concern, where electricity use per capita has remained stagnant for over three decades, despite significant progress in other regions. This disparity necessitates urgent action to ensure access to reliable, affordable, and sustainable energy for all African citizens, crucial for their economic and climate goals.
In another report from October 2023, the IEA warned about the state of the global electricity grid and its potential to hinder the clean energy transition. The report, titled “Electricity Grids and Secure Energy Transitions,” describes the current grid infrastructure as a “bottleneck” and emphasises the need for significant investment to avoid jeopardising progress towards climate goals.
Specifically, the IEA suggests that annual investment in electricity grids needs to double to surpass $600 billion by 2030. This substantial increase, compared to stagnant investment levels over the past decade, is deemed crucial to accommodate the rapid growth of renewable energy sources like solar and wind power, as well as electric vehicles and heat pumps.
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