Global Electricity Demand Slowed Slightly in 2022, Nuclear Set to Grow

World electricity demand remained resilient in 2022 amid the global energy crisis triggered by Russia’s invasion of Ukraine.

Demand rose by almost 2% compared with the 2.4% average growth rate seen over the period 2015-2019, according to a report by the International Energy Agency (IEA).

The electrification of the transport and heating sectors continued to accelerate globally, with record numbers of electric vehicles and heat pumps sold in 2022 contributing to growth. Nevertheless, economies around the world, in the midst of recovering from the impacts of Covid-19, were battered by record-high energy prices.

Soaring prices for energy commodities, including natural gas and coal, sharply escalated power generation costs and contributed to a rapid rise in inflation. Economic slowdowns and high electricity prices stifled electricity demand growth in most regions around the world.

Asia’s Growing Demand

Over the next three years, more than 70% of the growth in global electricity demand is set to come from China, India and Southeast Asia combined. China’s share of global electricity consumption is forecast to rise to one-third by 2025, compared with one-quarter in 2015.

Across Asia emerging and developing economies’ growth is accompanied by a corresponding rise in demand for electricity, while at the same time, advanced Asian economies are pushing for electrification to decarbonise their transportation, heating and industrial sectors.

As a result, global electricity demand is expected to grow at a much faster pace of 3% per year over the 2023-2025 period compared with the 2022 growth rate. The total increase in global electricity demand of about 2 500 terawatt-hours (TWh) out to 2025 is more than double Japan's current annual electricity consumption.

Nevertheless, uncertainties exist regarding the growth of electricity demand in China. While the country recently eased its stringent Covid restrictions in early December 2022, the full extent of the economic impacts remain unclear.

Increase of Nuclear Power

The energy crisis has renewed interest in the role of nuclear power in contributing to energy security and reducing the CO2 intensity of power generation. In Europe and the United States, discussions on the future role of nuclear in the energy mix have resurfaced. At the same time, other parts of the world are already seeing an accelerated deployment of nuclear plants.

As a result, global nuclear power generation is set to grow on average by almost 4% over 2023-2025, a significantly higher growth rate than the 2% over 2015-2019. This means that in every year to 2025, about 100 TWh of additional electricity is set to be produced by nuclear power, the equivalent of about one-eighth of US nuclear power generation today.

More than half of the growth in global nuclear generation to 2025 comes from just four countries: China, India, Japan and Korea. Among these countries, while China leads in terms of absolute growth from 2022 to 2025 (+58 TWh), India is set to have the highest percentage growth (+81%), followed by Japan.

This results from the Japanese government’s push to ramp up nuclear generation in order to reduce reliance on gas imports and strengthen energy security.

#renewables #decarbonisation #nuclearpower