Global electricity demand fell by around 1% in 2020, with demand declining most markedly in the first half of the year as lockdowns restricted commercial and industrial activity. Demand was, at times, 20-30% lower than pre-lockdown periods. Compared to the same periods in 2019, after stripping out weather variations, China’s demand dropped by more than 10% in February. The United States, after China the second-largest global electricity consumer, experienced a decline of almost the same magnitude in May during the peak of stay-at-home orders.

From March to April, weekly demand in Germany, France and the United Kingdom dropped more than 15% and, in Spain and Italy, by even more than 25%. Similarly, India saw demand decline more than 20% in several weeks between mid-March and the end of April. In Japan and Korea – where COVID-19 cases were fewer than in Europe and the United States– demand declined by around 8% in May.

Advanced economies recovered in the second half of 2020 but remained for the most part below 2019 levels. Some emerging markets and developing regions registered strong growth rates towards the end of the year, especially China and India, who recorded more than 8% and 6% year-on-year growth, respectively, in the last quarter of 2020.

Electricity demand is expected to increase by 4.5% in 2021, supported by rebounding economic activity and rapid growth in major emerging economies such as China.

In advanced economies, vaccination campaigns against Covid‑19 are expected to enable the progressive lifting of restrictions between spring and autumn. The anticipated demand growth of 2.5% should be sufficient to push demand within 1% of 2019 levels. In the United States, demand is expected to increase by around 2%, boosted by economic stimulus and colder temperatures during the early months of 2021. This increase should push demand to within 1.6% of 2019 levels. The largest consumers in the European Union  – Germany, France, Italy and Spain – are anticipated to remain below 2019 levels, with an increase of almost 3% in 2021 failing to fully make up for declines of 4% to 6% in 2020. It is similar in Japan, where demand is expected to rebound only 1% from 2020 levels, far from sufficient to reverse the 4% decline in 2020.

Demand in emerging and developing economies remains on the growth trajectory that resumed in the second half of 2020. This trajectory will be accelerated by the projected strong economic recovery for China and India.
 
With a projected 2021 GDP growth of 9% in China and 12% in India, electricity demand is expected to grow by around 8% in both countries compared with 2020. For China, the projected increase comes on top of 2020 growth, putting demand in 2021 almost 12% above 2019 levels. Southeast Asian countries are also expected to see a strong return to growth, with demand increasing 5% in 2021, putting total demand 3% above 2019 levels.

Record growth of renewables – led by wind and solar PV, which in 2020 grew by 12% and 23%, respectively, combined with a decline in global electricity demand – put fossil fuel-fired and nuclear power plants in a tight spot in 2020. Demand from non-renewable sources decreased by more than 3%.

Coal was the hardest hit among all sources of electricity in 2020, down 440 TWh. The 4.4% drop in generation from coal was the largest ever absolute decline and the largest relative decline in the past fifty years. Driven by low gas prices, the United States alone accounted for almost half of the global net decline. The European Union was responsible for an additional 23% of the decline – a decline largely offset by increases in generation from renewable sources.

Gas-fired power plants experienced lesser declines in generation compared to coal, down only 1.6% in 2020. Gas was less affected owing to competitive prices, especially during the middle of the year. In the United States, where gas-fired generation increased by 2% in 2020, coal-fired generation dropped by a staggering 20%, or 210 TWh.

Oil continued its uninterrupted global decline since 2012, decreasing by 4.4%.

Recent developments promise the 20th consecutive year of growth for renewables-based electricity generation in 2021. Expanding generation from renewables is expected to provide just over half of the increase in electricity supply in 2021. With generation from nuclear expected to increase by around 2%, the remaining electricity demand growth is met by coal and gas-fired power plants. 

The majority of the increase in electricity generation from fossil fuels is likely to be provided by coal-fired power plants, with their output expected to increase by 480 TWh. Due to upward pressure on gas prices, natural gas benefits to only a small extent (+1%). In the United States, where coal-fired generation dropped by around 20% in 2020, we expect about half of this loss to be reversed in 2021 – as coal-to-gas switching is unwound in some parts of the country. As a result, gas-fired generation falls by almost 80 TWh in 2021 in the United States.

Well over half of the increase in coal-fired electricity generation in 2021 is anticipated in China. Although representing about 45% of additional global renewable generation, around half of the 8% increase in electricity supply in China is provided by fossil fuels in 2021, pushing generation from coal in China up by 330 TWh (or 7%) on 2019 levels. In India, which is expected to have the second-largest absolute demand growth after China, 70% of additional electricity demand in 2021 will be covered by thermal generation – almost all from coal.