Electricity is central to trendy life and clear electricity is pivotal to vitality transitions, however within the absence of quicker structural change within the sector, rising demand over the following three years may lead to further market volatility and continued excessive emissions, stated an IEA report.
Driven by the speedy financial rebound, and extra excessive climate circumstances than in 2020, together with a colder than common winter, final yr’s six per cent rise in global electricity demand was the most important in share phrases since 2010 when the world was recovering from the global monetary disaster.
In absolute phrases, final yr’s enhance of over 1,500 terawatt hours was the most important ever, in accordance to the January 2022 version of the IEA’s semi-annual Electricity Market Report.
The steep enhance in demand outstripped the power of sources of electricity provide to preserve tempo in some main markets, with shortages of pure gasoline and coal main to unstable costs, demand destruction and destructive results on energy turbines, retailers and finish customers, notably in China, Europe and India.
Around half of final yr’s global development in electricity demand happened in China, the place demand grew by an estimated 10 per cent.
China and India suffered from energy cuts at sure factors within the second half of the yr due to coal shortages.
“Sharp spikes in electricity prices in recent times have been causing hardship for many households and businesses around the world and risk becoming a driver of social and political tensions,” stated IEA Executive Director Fatih Birol.
“Policy makers should be taking action now to soften the impacts on the most vulnerable and to address the underlying causes. Higher investment in low-carbon energy technologies including renewables, energy efficiency and nuclear power — alongside an expansion of robust and smart electricity grids — can help us get out of today’s difficulties.”
The IEA’s worth index for main wholesale electricity markets nearly doubled in contrast with 2020 and was up 64 per cent from the 2016-2020 common.
In Europe, common wholesale electricity costs within the fourth quarter of 2021 had been greater than 4 occasions their 2015-2020 common. Besides Europe, there have been additionally sharp worth will increase in Japan and India, whereas they had been extra average within the US the place gasoline provides had been much less perturbed.
Electricity produced from renewable sources grew by six per cent in 2021, but it surely was not sufficient to sustain with galloping demand. Coal-fired technology grew by 9 per cent, serving greater than half of the rise in demand and reaching a brand new all-time peak as excessive pure gasoline costs led to gas-to-coal switching.
Gas-fired technology grew by two per cent, whereas nuclear elevated by 3.5 per cent, nearly reaching its 2019 ranges. In whole, carbon dioxide (CO2) emissions from energy technology rose by seven per cent, additionally reaching a record excessive, after having declined the 2 earlier years.
For 2022-2024, the report anticipates electricity demand rising 2.7 per cent a yr on common, though the Covid-19 pandemic and excessive vitality costs convey some uncertainty to this outlook.
Renewables are set to develop by eight per cent per yr on common, serving greater than 90 per cent of internet demand development throughout this era.
The IEA expects nuclear-primarily based technology to develop by one per cent yearly throughout the identical interval.
Responding to the IEA report, Dave Jones, Global Programme Lead at Ember, stated: “It’s not a surprise to see a sudden increase in electricity demand after a pandemic-induced shutdown.
“However, failure to construct sufficient new clear electricity to sustain with demand will sluggish the phaseout of coal-fired and gasoline-fired electricity; a mistake we will not afford to make for the local weather. Even earlier than the vitality disaster, new wind and photo voltaic initiatives had been cheaper than fossil initiatives, however now that differential has exploded. The winners from the vitality worth disaster will probably be wind and photo voltaic.”