International Energy Agency annual report finds renewables, nuclear power to cover global demand over next three years

Published on January 26, 2024 by Chris Galford

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In an annual analysis known as Electricity 2024, the International Energy Agency (IEA) recently reported electricity demand will grow at a faster rate over the next three years, but that all additional demand forecasted will be covered by low emissions-producing technologies.

Global growth in electricity demand fell back slightly to 2.2 percent in 2023 as advanced economies pulled back somewhat on consumption, but things are expected to come back with a vengeance through 2026, reaching an average of 3.4 percent. Much of the increase in electricity demand – about 85 percent of it – will likely come from countries such as China and India, as well as Southeast Asian nations.

Nearly half of the world’s electricity generation should be from low-emissions sources by 2026, according to the report – a leap up from the 40 percent reported in 2023. By early 2025, renewables alone should make up more than one-third of the total electricity generation, finally supplanting coal. Nuclear power will also have a banner year in 2025, reaching an all-time high as new reactors enter service across the world and others return to operation.

“The power sector currently produces more CO2 emissions than any other in the world economy, so it’s encouraging that the rapid growth of renewables and a steady expansion of nuclear power are together on course to match all the increase in global electricity demand over the next three years,” IEA Executive Director Fatih Birol said. “This is largely thanks to the huge momentum behind renewables, with ever cheaper solar leading the way, and support from the important comeback of nuclear power, whose generation is set to reach a historic high by 2025. While more progress is needed, and fast, these are very promising trends.”

As a result of the green influx, emissions seem to be entering structural decline, dropping 2.4 percent in 2024, with smaller declines predicted to follow in 2025 and 2026. That’s good and bad, as the world’s climate goals would require electrification to advance even faster in the years ahead.

Helping matters, electricity prices last year were generally lower than in 2022. That didn’t apply universally, though, and trends tended to vary greatly region to region. European wholesale electricity prices, for example, declined more than 50 percent on average in 2023, but they were still more than double what they had been pre-Covid, and in the United States, prices were about 15 percent higher than in 2019.