Feb 8, 2023
Electricity Producers Face Big Ask as World Demand Set to Soar
(Bloomberg) -- China’s unrelenting need for more electricity to run the world’s factory floor and charge the biggest fleet of battery-powered vehicles will push global power demand to new heights, compounding the pressure on utilities to keep pace.
The increase in worldwide consumption each year through 2025 will be roughly equivalent to what the UK and Germany use now, according to the International Energy Agency’s annual electricity report. China is predicted to account for a third of electricity demand by then.
Electrification is increasing across the world as countries subsidize greener technologies and aim to decarbonize heating and industrial processes to meet ambitious climate goals. That requires more investment from utilities to build power stations, supplement fossil fuels with renewable sources and bury more cables to expand grid capacity.
“Renewables and nuclear power are growing quickly enough to meet almost all this additional appetite,” IEA Executive Director Fatih Birol said. “Governments now need to enable low-emissions sources to grow even faster.”
The annual growth rate for electricity demand is set to reach 3.2% in 2024-2025, compared with 2.6% this year, the IEA said.
Carbon emissions from the power sector, which constitute about 40% of the total, are expected to plateau as drastic cuts in Europe and the Americas offset the growth in coal and gas-fired facilities in Asia.
In addition, the global intensity of emissions from power generation — or the amount of carbon dioxide produced per unit of energy — is expected to decline by an average of about 3% a year through 2025, the IEA said.
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