Global power demand growth to rebound in 2024 after slowdown, IEA says

PARIS: The International Energy Agency (IEA) predicted that global power demand growth in 2023 will be slowed down by the ongoing energy crisis and economic downturn. However, a rebound is expected in 2024, which calls for the development of more renewable capacity.

According to IEA data, the global growth rate for energy consumption is projected to decrease to slightly less than 2% in 2023, compared to 2.3% in 2022 and the five-year pre-COVID 19 average of 2.4%.

The data also showed that the growth rate is expected to recover to 3.3% in 2024 as the economic outlook improves.

The IEA stated that renewable energy is expected to cover the anticipated growth in power demand this year and next, with power from renewable sources surpassing one third of the total global power supply for the first time in 2024.

However, hydropower has experienced a decline of approximately 2% in the period from 2020 to 2022, compared to figures from 1990 to 2016. This decline is equivalent to about 240 terawatt-hours, which is approximately the annual consumption of Spain.

The IEA emphasized that anticipating challenges related to climate change in the hydropower sector and planning accordingly will be crucial for the efficient and sustainable use of hydro resources.

The growth of renewable energy is expected to contribute to a reduction in global emissions, offsetting increases in emissions from China and India. The IEA highlighted that renewable deployment in some countries, coupled with the transition from coal to natural gas, is driving emissions declines.

According to IEA data, the European Union alone accounts for 40% of the total decline in emissions from power generation.

The EU recorded a 6% decline in power demand in the first half of this year. This decline can be attributed to energy-intensive industries, such as aluminum, steel, paper, and chemical industries, reducing their energy consumption due to high prices. Additionally, a relatively mild winter had a limited impact on reducing demand.

While wholesale electricity prices in Europe have fallen from last year’s records following Russia’s invasion of Ukraine, they are still more than double their levels in 2019. In India, prices have increased by 80%, and in Japan, they have increased by over 30%.

In contrast, prices in the United States have returned to almost 2019 levels. The country’s power demand is expected to decline by 1.7% in 2023 due to slow economic growth and rebound to 2% in 2024, compared to the 2.6% recorded in 2022.

IEA data showed that power demand in China is projected to grow by 5.3% in 2023 and 5.1% in 2024, following a moderate 3.7% rise in 2022. The increased use of cooling to cope with summer heatwaves is expected to drive demand growth in China this year.

India’s power consumption is expected to rise by 6.8% in 2023 and 6.1% in 2024, surpassing the combined consumption of Japan and Korea. However, these growth rates are lower than the 8.4% rise recorded in 2022. The growth can be attributed to increased use of household appliances, electrical machinery, electric vehicles, and cooling demand.

– Reuters