Climate Politics

The world’s electricity consumption is growing rapidly

Screen Shot 2024 08 05 Um 20.39.50

The original article can be read as “Schlumpfs graphic 122” in the online Nebelspalter of 5 August 2024.

As part of the energy crisis triggered by the Russian invasion of Ukraine, many European governments have called on their citizens to save electricity. Although this contributed to a slightly smaller increase in global electricity consumption last year, this effect has already fizzled out: the forecast growth rate for electricity for 2024 exceeds all values since 2007 – apart from the recovery effects following the sharp drop in demand due to the financial crisis and the pandemic.

What is important:

– According to forecasts by the International Energy Agency, global electricity consumption will increase by a whopping 4.2 percent this year compared to 2023.
– China and India are mainly responsible for this additional demand, with growth rates of six to eight percent.
– After all, CO2 emissions from electricity generation have stabilized despite rising consumption – but there are still no signs of a reduction in these emissions.

In July of this year, the International Energy Agency (IEA) adjusted its figures for 2023 and updated its forecasts for 2024 and 2025 in its “Electricity Half-Year Report 2024” (see here). IEA reports on electricity always include the results of current electricity demand and electricity generation, as well as CO2 emissions. There is also information on electricity prices. There are also corresponding forecasts for the immediate future.

The following graph from this latest semi-annual report shows the year-on-year changes in global electricity consumption in percent for the period from 1991 to 2025:

Stromnachfrage In Prozent
Source: IEA

Of the 35 years listed, there are only two in which global electricity consumption fell: These were the economically difficult years of the financial crisis in 2009 and the coronavirus pandemic in 2020. However, the minimal decline in demand in these years was offset each time by particularly strong growth in electricity consumption in the following year, resulting in average growth in global electricity demand of between two and three percent over the last three decades.

Global electricity demand will grow faster than before in 2024 and 2025

There was a longer period with very high annual growth rates of over four percent between 2002 and 2007: however, this higher growth was almost exclusively due to the biggest growth boom that China has ever experienced. And now – after a phase of slower growth – the IEA is forecasting a similarly high growth rate in electricity demand of 4.2 percent for 2024 and 4.1 percent for 2025.

The report identifies three main drivers for this increased demand: firstly, economic growth, which has picked up again after the pandemic; secondly, increased cooling demand due to more heat waves; and thirdly, the increased expansion of electricity-intensive data centers due to the increased use of artificial intelligence. Of course, the impact of these drivers differs in the various regions of the world.

Let us therefore take a look at how electricity consumption has developed in the four regions that are responsible for almost the entire global total: China, the USA, the European Union (EU) and India. The next chart shows the electricity demand of these four regions in billions of kilowatt hours (terawatt hours, TWh), also for the period from 1991 to 2025:

Nachfrage In Regionen
Source: IEA

In 2023, annual electricity consumption in China (red) was 9300 TWh, in the USA (light green) 4250 TWh, in the EU (blue) 2600 TWh and in India (yellow) 1700 TWh. This means that China’s electricity demand was more than twice as high as that of the USA, the EU and India combined. In any case, China’s development is unprecedented: from less than 1000 TWh in 1991, demand has risen continuously to the present day – at an increasing rate since 2002.

India has huge catch-up potential

Demand in India has also risen continuously, albeit at a much lower level than in China: in 2023, per capita electricity consumption in India was still over five times lower than in China. This shows how great India’s pent-up demand is: the way in which this now most populous country in the world will meet its energy demand in the future will have a decisive impact on the overall global picture.

In contrast to China and India, the curves for the two highly developed regions of the USA and the EU show that economic growth is also possible without large additional electricity requirements: electricity consumption in these two regions has stagnated since the 2000s – with a slight downward trend in the EU and a slight upward trend in the USA.

Even in the USA and the EU, consumption is set to rise again

According to the latest IEA forecasts, however, electricity consumption will increase in all four regions in 2024 and 2025 – even in the USA and the EU. On average over these two years, the annual growth rate will be highest in India at 7.5 percent, followed by China at 6.3 percent. The estimates for the USA are 2.5 percent, and the IEA predicts a growth rate of 2.2 percent for the EU.

What impact does this strong growth in electricity consumption have on CO2 emissions from electricity generation? It should be borne in mind that emissions from electricity production only account for around 36 percent of the world’s total CO2 emissions. The next chart from the IEA 2024 semi-annual report shows the impact of the forecast growth in electricity consumption in 2024 and 2025 on the CO2 balance of the individual regions:

Co2 2023 2025
Source: IEA

The graph shows the balance of CO2 emissions from electricity production in the individual regions of the world between the status quo in 2023 and the IEA forecast for 2025. All figures are given in million tons of CO2 . In the global total (black dots), emissions fall barely noticeably in these two years from 13,684 to 13,663 million tons of CO2 .

India compensates for European success

This stabilization of emissions at a high level is primarily the result of a significant reduction in the EU and the rest of Europe (green) and an almost equally large increase in India (yellow), which more or less offset each other. Europe manages to reduce emissions by adding wind and solar power plants as well as nuclear power plants. In India, the strong increase in electricity consumption is still heavily influenced by the construction of new coal-fired power plants, which is driving up emissions.

It is astonishing that China has already managed to stabilize its emissions – despite still very high growth rates in electricity consumption. This is due to the fact that China has strongly promoted solar and wind energy as well as nuclear energy. These are all low-carbon technologies.

Conclusion: For many people in developing and emerging countries, access to (more) electricity is the key to better living conditions. In this sense, high growth rates for electricity in such regions are to be welcomed. However, we must also take note of the fact that although we have managed to stabilize CO2 emissions in terms of climate policy, the world is still a long way from decarbonization.

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