Electricity is the world’s most important and fastest-growing form of energy. More proof for that assertion came a few days ago when the International Energy Agency released its “Electricity Mid-Year Update.” The Paris-based agency expects global power demand to grow by 4% this year. That’s the fastest growth since 2007.
The new electricity report — along with a new IEA report on coal, a July 24 article by Reuters saying that domestic wind energy production went AWOL last month, and a July 25 report from the Energy Information Administration saying that gas-fired generation in the U.S. hit a new record — shows that the global power sector will be relying on coal and natural gas for decades to come.
Let’s start with power demand. The IEA expects U.S. electricity use to increase by 3% this year. That’s a big jump, given that domestic power demand fell by about 1.6% last year due to milder weather.
The IEA report demonstrates that electricity use goes hand in hand with economic growth. The chart above, which uses a screen grab from the IEA electricity report, shows that electricity fuels economic development, and growing economies use more juice. That can be seen by noting the drops in electricity use after the 2008 financial crisis and the collapse in demand following the 2020 Covid lockdowns.
The IEA places particular emphasis on China and India. But those countries are only part of the story. Here’s a key segment from the IEA report:
The 4% growth expected for 2024 is the highest since 2007, with the exceptions of the sharp rebounds in 2010 after the global financial crisis and in 2021 following the Covid-induced demand collapse. The growth is driven by strong electricity demand in multiple regions and countries, especially in...China, India and the United States. We expect this demand trend to continue in 2025, with growth also at 4%. In both 2024 and 2025, the rise in the world’s electricity use is projected to be significantly higher than global GDP growth of 3.2%. In 2022 and 2023, electricity demand grew more slowly than GDP.
In other words, we aren’t decoupling economic growth from electricity demand. That’s particularly obvious in India. Here’s the IEA again: “India, the fastest growing major economy in the world, is forecast to post an 8% rise in electricity consumption in 2024, matching the rapid growth it saw in 2023.” What fuel will be used to meet that rising demand for power? Coal. The IEA expects India’s coal-fired generation to increase by 7% this year.
Read the rest of this piece at Robert Bryce Substack.
Robert Bryce is a Texas-based author, journalist, film producer, and podcaster. His articles have appeared in a myriad of publications including the Wall Street Journal, New York Times, Forbes, Time, Austin Chronicle, and Sydney Morning Herald.
Photo: Vikarna via Wikimedia under CC 4.0 License.
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