Global electricity demand is projected to fall by about 2% this year – the biggest yearly decline since the mid-twentieth century and far larger than what followed the global financial crisis in 2008/9, which resulted in a drop in electricity demand of 0.6% in 2009, the International Energy Agency (IEA) reports.
In its inaugural 'Electricity Market Report', published on December 14, the IEA states that the contraction in demand this year is a result of the Covid-19 pandemic and its impact on economic activity.
The report further points out that renewable electricity generation is projected to increase by nearly 7% this year, as long-term contracts, priority access to the grid and the sustained installation of new plants underpin strong growth in renewable electricity production.
The decline in electricity demand, combined with a rise in renewable supply, has also accelerated the squeeze on coal, gas and nuclear power, with coal-fired electricity generation projected to decrease by about 5%, gas-fired electricity generation by about 2% and nuclear power generation by about 4% this year.
Overall, electricity generation-related carbon dioxide emissions are expected to decrease by 5% this year – a much bigger decline than the forecast decline in global electricity demand.
Looking at 2021, the IEA expects demand will rebound and grow by about 3%, mainly driven by emerging and developing economies, particularly China and India.
Further, the IEA expects renewables to remain the biggest growth sector in 2021. It notes that renewables will grow its market share to 29% in 2021, from 28% this year.
Nuclear power is also set for growth of 2.5% owing to a rebound in France and Japan and new plants coming online in China and the United Arab Emirates.
In advanced economies, the growth of renewables and nuclear will continue to shrink the space remaining for fossil fuel generation, but in emerging and developing economies, demand growth is projected to outpace increases in renewables and nuclear, leaving some room for coal and gas generation to expand.
The expected net result globally is that coal-fired generation will increase by about 3%, while gas-fired generation will increase by about 1%. This is expected to result in a 2% increase in carbon dioxide emissions from the power sector in 2021.
Meanwhile, the report states that the economic downturn and measures to curb the spread of Covid-19 had had a significant impact on electricity demand in Africa this year, with South Africa's electricity demand to decrease by a projected 5% this year.
Electricity demand for Africa as a whole is expected to decrease by about 2% this year.