Jul 2023
Electricity
Worldwide efforts to address climate change is leading to the rapid electrification of numerous end-users from transport to industry, driving a massive increase in power demand as well as the need to generate as much of it as possible from renewable sources. The result is a dramatic transformation of power systems globally.
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Electricity is the fastest-growing source of final energy demand, and over the next 25 years its growth is set to outpace energy consumption as a whole. The rapid rollout of renewable sources such as wind and solar PV puts electricity at the forefront of clean-energy transitions, providing access to the nearly 800 million currently deprived and helping to cut air pollution and meet climate goals.
Such a radical transformation also calls for new approaches to how power systems are designed and operated. Sunshine and wind are not always available, requiring a range of backup generation options as well as smarter and better-connected grids. The power sector now attracts more investment than oil and gas combined – necessary both to transform the generation mix and to upgrade ageing infrastructure. Further policy action is essential to ensure that rapid electrification is matched by equally rapid rollouts of low-carbon sources and that it does not result in less secure energy systems.
Such a radical transformation also calls for new approaches to how power systems are designed and operated. Sunshine and wind are not always available, requiring a range of backup generation options as well as smarter and better-connected grids. The power sector now attracts more investment than oil and gas combined – necessary both to transform the generation mix and to upgrade ageing infrastructure. Further policy action is essential to ensure that rapid electrification is matched by equally rapid rollouts of low-carbon sources and that it does not result in less secure energy systems.
Last updated Feb 16, 2023
Key findings
Year-on-year change in electricity demand by region, 2019-2025
OpenGlobal electricity demand growth slowed only slightly in 2022 despite energy crisis headwinds
Electricity is central to many parts of life in modern societies and will become even more so as its role in transport and heating expands through technologies such as electric vehicles and heat pumps. Power generation is currently the largest source of carbon dioxide (CO2) emissions globally, but it is also the sector that is leading the transition to net zero emissions through the rapid ramping up of renewables such as solar and wind. At the same time, the current global energy crisis has placed electricity security and affordability high on the political agenda in many countries.
Electricity consumption in the European Union recorded a sharp 3.5% decline year-on-year (y-o-y) in 2022 as the region was particularly hard hit by high energy prices, which led to significant demand destruction among industrial consumers. Electricity demand in India and the United States rose, while Covid restrictions affected China’s growth.
Electricity consumption in the European Union recorded a sharp 3.5% decline year-on-year (y-o-y) in 2022 as the region was particularly hard hit by high energy prices, which led to significant demand destruction among industrial consumers. Electricity demand in India and the United States rose, while Covid restrictions affected China’s growth.
Power sector CO2 emissions in the Net Zero Scenario, 2000-2030
OpenElectricity sector emissions reached their highest-ever level in 2021
Global power sector CO2 emissions (from both electricity and heat production) increased by close to 700 Mt CO2 in 2021, reaching an all-time high of more than 14 Gt. This was driven mostly by a strong increase in coal-fired electricity generation compared to the year before.
A fully decarbonised electricity sector is the essential foundation of a net zero energy system. Electricity is at the heart of modern economies, its share of final energy consumption over 50% by 2050 as electricity demand increases rapidly. Unabated fossil fuels currently account for over 60% of total global electricity generation. To be consistent with the Net Zero Emissions by 2050 Scenario, that share needs to drop to 26% by 2030. The pace of deployment of low- and zero-emission sources has to pick up significantly in order to meet this milestone.
A fully decarbonised electricity sector is the essential foundation of a net zero energy system. Electricity is at the heart of modern economies, its share of final energy consumption over 50% by 2050 as electricity demand increases rapidly. Unabated fossil fuels currently account for over 60% of total global electricity generation. To be consistent with the Net Zero Emissions by 2050 Scenario, that share needs to drop to 26% by 2030. The pace of deployment of low- and zero-emission sources has to pick up significantly in order to meet this milestone.
Average annual renewable capacity additions and cumulative installed capacity, historical, forecasts and IEA Net Zero Scenario, 2009-2026
OpenRenewable electricity capacity additions trend is not on track to meet the IEA Net Zero by 2050 Scenario
Annual additions to global renewable electricity capacity are expected to average around 305 GW per year between 2021 and 2026 in our main case forecast. This implies an acceleration of almost 60% compared to renewables’ expansion over the last five years. Conversely, annual renewable capacity additions in our accelerated case are a quarter higher than in our main case, reaching over 380 GW on average over 2021-2026.
However, the gap between both our main and accelerated case forecasts and the trajectory necessary to meet Net Zero by 2050 remains significant. Annual capacity growth under the IEA Net Zero Scenario during 2021-2026 needs to be 80% faster than in our accelerated case, implying that governments need to not only address policy and implementation challenges, but also to increase their ambition.
However, the gap between both our main and accelerated case forecasts and the trajectory necessary to meet Net Zero by 2050 remains significant. Annual capacity growth under the IEA Net Zero Scenario during 2021-2026 needs to be 80% faster than in our accelerated case, implying that governments need to not only address policy and implementation challenges, but also to increase their ambition.
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The Users TCP’s mission is to provide evidence from socio-technical research on the design, social acceptance and usability of clean energy technologies to inform policy making for clean, efficient and secure energy transitions. Decarbonisation, decentralisation and digitalisation are embedding energy technologies in the heart of our communities. Communities’ response to these changes and use of energy technologies will determine the success of our energy systems. Poorly designed energy policies, and technologies that do not satisfy users’ needs, lead to ‘performance gaps’ that are both energy and economically inefficient. User-centred energy systems are therefore critical for delivering socially and politically acceptable energy transitions.
The mission of the HTS TCP is twofold: to evaluate the status of and assess the prospects for the electric power sector's use of HTS within the developed and developing world; and to disseminate the findings to decision makers in government, the private sector, and the research and development community. The HTS TCP provides evidence from socio-technical research on energy use to policy makers to support clean energy transitions. Through its work the HTS TCP provides evidence on the design, social acceptance and usability of clean energy technologies in the area of high temperature superconductivity.
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Grids as the backbone for secure energy transitions
14 Apr 2023 16:30—18:30
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