Renewable Energy Set to Overtake Coal in Global Electricity Production
Amsterdam, Monday, 22 July 2024.
The International Energy Agency forecasts renewable sources will surpass coal in electricity generation by 2025. Solar power is expected to meet half of the global demand growth, marking a significant shift in the energy landscape.
Rising Demand and Renewable Supply
The International Energy Agency (IEA) has projected that global electricity demand will increase by approximately 4% annually in 2024 and 2025, marking the highest growth rates since 2007. This surge is fueled by robust economic activity, intense heatwaves, and an accelerated adoption of electric-based technologies, such as electric vehicles and heat pumps. Notably, solar photovoltaic systems are expected to meet nearly half of this demand increase, with renewables overall projected to fulfill about three-quarters of the total demand surge[1].
Global Shifts in Energy Production
The IEA’s forecast indicates that the share of global electricity supply from renewable sources will rise from 30% in 2023 to 35% in 2025. This growth is driven largely by the expansion of solar and wind energy. Solar power alone is set to account for half of the increase in electricity consumption, with wind power contributing a further 25%. Despite this growth, coal-fired power generation is not expected to decline immediately due to continued high demand from countries like China and India[2].
Regional Demand and Impacts
China and India are significant drivers of the increasing electricity demand. In India, electricity demand is projected to surge by 8% this year, fueled by strong economic activity and severe heatwaves. Similarly, China’s demand is expected to grow by over 6%, supported by robust activity in both the services and clean energy sectors. In contrast, European demand is anticipated to climb more modestly by 1.7%, while the United States is expected to see a 3% rebound in electricity demand due to economic growth and the rising need for cooling and data centers[3].
Calls for Higher Efficiency Standards
Keisuke Sadamori, IEA Director of Energy Markets and Security, has emphasized the need for higher energy efficiency standards to mitigate the impacts of increased cooling demand on power systems. This is particularly relevant as the development of artificial intelligence spurs the creation of massive data centers, which are major consumers of electricity. Sadamori also highlighted the importance of expanding and reinforcing electricity grids to ensure a secure and reliable supply as the world transitions to renewable energy sources[4].
Looking Ahead
The IEA’s forecast underscores the urgent need for a faster rise in clean energy adoption to meet international energy and climate goals. As the world grapples with the dual challenges of increasing electricity demand and the imperative to reduce carbon emissions, the rapid expansion of renewable energy sources represents a critical step forward. The upcoming Global Conference on Energy and AI in Paris on December 5, 2024, will further explore how artificial intelligence can be leveraged to accelerate the clean energy transition and ensure its sustainability[5].