Global electricity demand growth is adding the equivalent of Japan’s demand each year and rising even more quickly in scenarios that meet national and global goals for achieving Net Zero emissions, according to the IEA’s World Energy Outlook 2024 report.
After the age of coal and oil, we are now moving at speed into the ‘age of electricity’, which will define the global energy system in future and increasingly be based on clean sources of electricity.
Electricity demand is growing much faster than overall energy demand, thanks to existing uses, notably cooling, and new ones such as electric mobility and data centres.
There are more than 11,000 data centres registered worldwide and they are often spatially concentrated, so local effects on electricity markets can be substantial. Nonetheless, they account for a relatively small share of overall electricity demand growth to 2030 (the relationship between data centres, rising digital and AI demand and energy is highlighted in the November technology issue of gasworld global).
For clean energy to continue growing at pace, much greater investment in new energy systems, especially in electricity grids and energy storage, are necessary, the report warns.
Many power systems are currently vulnerable to an increase in extreme weather events, putting a premium on efforts to bolster their resilience and digital security.
Since 2020, almost 200 trade measures affecting clean energy technologies – most of them restrictive – have been introduced around the world, compared with 40 in the preceding five-year period.
However clean energy is entering the energy system at an unprecedented rate, including more than 560 gigawatts (GW) of new renewables capacity added in 2023, but deployment is far from uniform across technologies and countries.
Clean technology costs are coming down, but maintaining and accelerating momentum behind their deployment in a lower fuel-price world is a different proposition. “How consumer choices and government policies play out will have huge consequences for the future of the energy sector, and for tackling climate change,” it notes.
Whether it is investment, fossil fuel demand, electricity consumption, deployment of renewables, the market for EVs, or clean technology manufacturing, we are now in a world where almost every energy story is essentially a China story, according to Director Fatih Birol.
China’s solar expansion is now proceeding at such a rate that, by the early 2030s its solar power generation alone could exceed the total electricity demand of the US today.
Source: IEA World Energy Outlook 2024
Echoing previous reports, the outlook warns of a surplus of LNG in the second half of the decade, describing ‘a wave of new LNG projects’ will add almost 50% to available export capacity by 2030. Around 270 billion cubic metres (bcm) of annualised new LNG capacity, led by the US and Qatar, has been approved.
Europe and China have the import infrastructure to absorb significantly more gas, but their scope to clear the market is constrained by their investments in clean energy.
Gas-importing emerging and developing economies would generally need prices at around $3-5/MBtu to make gas attractive as a large-scale alternative to renewables and coal, but delivered costs for most new export projects need to average around $8/MBtu to cover their investments and operation.
Regional conflicts and geopolitical strains are highlighting significant fragilities in today’s global energy system. Around 20% of global oil and LNG supplies flow through the Strait of Hormuz.
