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 Jan 20, 2022
Key findings
Global changes in electricity generation, 2015-2024
Open2021 placed exceptional demands on electricity markets around the world
Strong economic growth, combined with colder winters and warmer summers, boosted global electricity demand in 2021 by more than 6% – the largest increase since the recovery from the financial crisis in 2010. The fast rebound in overall energy demand strained supply chains for coal and natural gas, pushing up wholesale electricity prices. Despite the impressive growth of renewable power, electricity generation from coal and gas hit record levels.
During 2022-2024, we expect an average annual electricity demand growth of 2.7% with growing renewables almost matching this moderate demand growth. Nevertheless, the Covid-19 pandemic and high energy prices add uncertainty to this.
During 2022-2024, we expect an average annual electricity demand growth of 2.7% with growing renewables almost matching this moderate demand growth. Nevertheless, the Covid-19 pandemic and high energy prices add uncertainty to this.
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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09 Dec 2021 08:30—09:30
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