As the global demand for electricity is expected to grow at an average rate of 3% annually over the next three years, renewables and nuclear power would also increase to meet almost all of the world’s demand by 2025, a new International Energy Agency (IEA) report finds.

IEA’s Electricity Market Report 2023 offers an analysis of recent policies, trends, and market developments, including forecasts through 2025 for electricity demand, supply, and CO2 emissions.

The robust growth of renewables will lead to an increasing share in the global power generation mix and is expected to rise from 29% in 2022 to 35% in 2025. As a result, the CO2 intensity of global power generation will continue to decrease.

The world’s electricity demand growth slowed slightly in 2022, but is expected to accelerate in the years ahead, the report said. The forecasted growth is a step up from the average growth of 2.4% during the years before the Covid pandemic.

Asia the Driving Force

The report said that emerging and developing economies in Asia would be the driving force behind the faster pace.

Over 70% of the increase in global electricity demand is expected to come from China, India, and Southeast Asia. China’s share of global electricity consumption is currently forecast to rise to a new record of one-third by 2025, up from one-quarter in 2015.

Advanced economies are also seeking to expand electricity generation methods to displace fossil fuels in sectors such as transport, heating, and industry.

India’s electricity consumption rose strongly, while China’s growth was more subdued due to its zero-covid policy weighing heavily on economic activity.

The United States recorded a robust increase in demand, driven by economic activity and higher residential use amid hotter summer weather and a colder-than-normal winter.

In contrast, demand in the European Union contracted due to mild winter weather and a decline in electricity consumption in the industrial sector.

The report said that electricity demand and supply worldwide are becoming increasingly weather-dependent and highlighted the need for faster decarbonization and accelerated deployment of clean energy technologies.

IEA Executive Director Fatih Birol said governments now need to enable low-emissions sources to grow even faster and drive down emissions so that the world can ensure secure electricity supplies while reaching climate goals.

Last month, the agency highlighted that the uneven geographic distribution of critical mineral resources used in clean energy supply chains makes international collaboration and strategic partnerships crucial. In its Energy Technology Perspectives 2023, the IEA provided a comprehensive analysis of global manufacturing of clean energy technologies and their supply chains today.

In December 2022, IEA said that energy efficiency actions taken since 2000, such as investments in building insulation and efficient cars, had ensured that the energy bills in IEA countries in 2022 are set to be $680 billion less than what they would have been otherwise.