Although renewable power uptake is expanding quickly, the growth is not enough to satisfy a strong rebound in global electricity demand this year.
As such, this heavy reliance on fossil fuels is threatening to push carbon dioxide emissions from the power sector to record levels in 2022, the report says.
In 2020, the global demand for electricity fell about 1% as a result of the Covid-19 pandemic. With the global economy in a recovery state, electricity demand is expected to grow by almost 5% in 2021 and 4% in 2022.
The majority of the increase in electricity demand is expected to come from the Asia Pacific region, primarily China and India.
Renewables demand outweighs supply
Going by current policy settings and economic trends, electricity generation from renewables, including solar photovoltaic, hydropower, and wind is on track to grow strongly around the world within the next two years – by 8% in 2021 and by more than 6% in 2022.
The IEA report stresses that even with this trajectory, renewables will only be sufficient to meet about half of the projected increase in global electricity demand over those two years.
On the other hand, fossil fuel-based electricity generation is set to cover 45% of additional demand in 2021 and 40% in 2022, with nuclear power accounting for the rest.
As a result, carbon emissions from the electricity sector which dropped in both 2019 and 2020 are predicted to increase by 3.5% in 2021 and by 2.5% in 2022, taking them to an all-time high.
According to the report, renewable power has exceeded demand growth in only two years- 2019 and 2020.
But in those cases, it was either because of an exceptionally slow or declining demand. This underscores the reality that renewables outpacing the rest of the electricity sector is not yet the new normal.
Buttressing this point, Keisuke Sadamori, the IEA Director of Energy Markets and Security, said, “Renewable power is growing impressively in many parts of the world, but it still isn’t where it needs to be to put us on a path to reaching net-zero emissions by mid-century.”
Adding that “as the economy rebounds after the pandemic, we’ve seen a surge in electrical generation from fossil fuels. To shift to a sustainable trajectory, we need to massively step up investment in clean energy technologies – especially renewables and energy efficiency.”
In the pathway set out in IEA’s recent Roadmap to Net Zero by 2050, it was recommended that nearly three-quarters of global emissions reductions between 2020 and 2025 take place in the electricity sector.
To achieve this decline, the pathway calls for coal-fired electricity generation to fall by more than 6% a year.
Contrary to the roadmap, however, coal-fired electricity generation is set to increase by almost 5% this year and by a further 3% in 2022, potentially reaching an all-time high, according to the Electricity Market Report.
Gas-fired generation, which declined 2% in 2020, is expected to increase by 1% in 2021 and by nearly 2% in 2022. The growth of gas lags that of coal because it plays a smaller role in the fast-growing economies in the Asia Pacific region and it faces competition from renewables in Europe and North America.
Climatic implications of coal-fired electricity
Since the IEA’s last Electricity Market Report in December 2020, extreme cold, heat, and severe drought have wrought serious strains and disruptions to electricity systems across the globe especially in the United States and Mexico to China and Iraq.
One of such occurrences was the Texas power crisis in February, where millions of residents had no power for up to four days because of icy weather,
In response, the IEA is setting up an Electricity Security Event Scale to track and classify major power outages, based on the length of time of the disruption and the number of people affected.
The severity of heatwaves and unusually long dry spells are fresh warnings of what lies ahead as our climate continues to heat up. The increase in the scale and frequency of extreme weather events will cause even greater impacts and strains on energy infrastructure.
When it comes to power, the world is indeed at crossroads. While countries around the world are stepping up their renewable power transitions in a bid to net-zero emissions target, the global demand for more electricity will see countries turning to fossil fuels- an unavoidable yet counterproductive move.