Electricity demand growth expectations revised down

Oil&Gas 14 January 2022 15:12 (UTC +04:00)
Electricity demand growth expectations revised down

BAKU, Azerbaijan, Jan.14

By Leman Zeynalova – Trend:

Due to the fast recovery in 2021, the International Energy Agency (IEA) has revised its expectations for electricity demand growth in 2022 down from 4 percent to 3 percent, Trend reports.

This is similar to the average growth rate for the 10 years before the COVID-19 pandemic.

IEA notes that after small drop in 2020, global electricity demand grew by around 6 percent in 2021.

“It was the largest ever annual increase in absolute terms (over 1 500 TWh) and the largest relative rise since the recovery from the financial crisis in 2010. A rapid economic recovery, combined with more extreme weather conditions than in 2020, including a colder than average winter, boosted demand. We estimate that the industrial sector contributed the most to demand growth, followed by the commercial and services sector and then the residential sector,” reads the IEA report.

The report shows that demand growth continues strongly for three major reasons.

“First, we expect a continued economic recovery. Second, rebound effects will continue in 2022 because health protection measures in place at times in 2021 dampened demand. And finally, the expected easing of the energy crisis, which resulted in supply shortages and prohibitively high energy prices in the fourth quarter of 2021, will support growth. However, the development of energy prices and the Covid-19 pandemic are the main uncertainties for the demand outlook. We expect a slowdown in global electricity demand growth during 2023 (2.6 percent increase) and 2024 (slightly above 2 percent increase) as rebound effects run out and energy efficiency measures start showing effects,” say IEA analysts.

IEA believes that the majority of supply growth in the years 2021 to 2024 is expected in China, accounting for around half of the net total increase, followed by India (12 percent), Europe (7 percent) and the United States (4 percent).


Follow the author on Twitter: @Lyaman_Zeyn