Afterthe historical impact of the virus pandemic, global electricitydemand will rebound moderately in 2021

Anew agency report shows that after experiencing the biggest declinein decades, next year's global power demand will be in China, Indiaand other emerging economies will rebound moderately driven byinternational energy growth.

Thefirst electricitymarket report released by IEA today shows that the historicalimpact of the Covid-19 crisis is expected to cause a 2% drop inglobal electricity demand in 2020. As the global economy recovers in2021, electricity demand is expected to increase by about 3%. Thiswill be much lower than the situation where demand rebounded morethan 7% in 2010 after the outbreak of the global financial crisis. By2020, China will be the only major economy with higher electricitydemand. However, its expected growth of around 2% is far below itsrecent average of 6.5%. Other major electricity consumers, includingthe United States, India, Europe, Japan, South Korea and SoutheastAsia, are expected to decline throughout the year.

Itis estimated that by 2020, the power generation from renewable energysources such as hydropower, wind and solar energy will increase bynearly 7%, thereby reducing the use of traditional energy sources.Coal production is expected to drop by about 5%, the largest drop inhistory; nuclear energy production accounts for about 4%; gas-firedpower generation has increased by 2%. Overall, by 2020, carbondioxide emissions from power generation are expected to drop by 5%.

"Electricityplays a central role in today's energy world, and this role will onlyincrease as the clean energy transition accelerates," said Dr.Fatih BIROL, Executive Director of IEA Power. "Based on thelatest available data, the new IEA Electricity Market Report providesnew insights into this key industry. Starting next year, we willrelease a new report every semester."

Decliningdemand, falling fuel prices, and increasing production of renewableenergy have pushed down wholesale electricity prices in 2020. TheInternational Energy Agency (IEA), which tracks the price trend ofmajor advanced economies, shows that the average price of this yearhas fallen by 28%, while in 2019 it has fallen by 12%.

Renewableenergy production is expected to continue to grow in 2021, anincrease of more than 6%, which will increase the share of renewableenergy in the energy structure from 28% in 2020 to 29%. Nuclearenergy is expected to grow due to the rebound in France and Japan andthe commissioning of new plants in China and the United ArabEmirates, which will increase by 2.5% next year.

Inadvanced economies, the growth of renewable energy and nuclear powerwill continue to reduce the space for fossil fuel production. Due tothe expected increase in natural gas prices, natural gas may be moreaffected than coal. In emerging and developing economies, the growthin demand is expected to exceed the growth in renewable energy andnuclear power, thereby leaving some room for coal and natural gasproduction.

Thenet result of global expectations is that by 2021, coal productionwill increase by about 3%, while gas-fired power plants will increaseby about 1%. This will lead to an increase of approximately 2% incarbon dioxide emissions from the power sector in 2021.

Thelatest IEA report stated that although the demand recovery will notbe as strong as after the global financial crisis, China, India andother emerging economies are expected to lead the growth trend nextyear.