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Global electricity consumption tends to increase rapidly in the period of 2025-2027 to meet the increasing demand from industrial production, using air conditioners, electrifying and expanding data centers.

The electricity demand increases very high

How will electricity demand increase in the near future? It is a large unknown that the public is concerned. IEA Note: Since 2010, global electricity demand has increased on average by 2.7%/year (higher than the general energy demand) due to electrification in households, commercial buildings, transportation and industry.

As in previous years, WEO 2024 reviewed three main scenarios:

– Stated policies scenario-steps), with the assumption: the current policies will exist and are related to the global temperature increase of 2.4 degrees Celsius in 2100 (with a probability of 50%).

– Announced Pledges Scenario (APS), assuming: all the ambitious goals of governments will achieve (and limit the temperature increase at 1.7 degrees C).

– Net Zero scenario in 2050 (Net Zero Emissions by 2050 Scenario-Nze), outlines the standard roadmap to achieve a net amount of CO2 exhaust in the middle of the century, suitable for limiting heat at 1.5 degrees C.

It is noteworthy that this Steps scenario is refined with sensitive elements such as the application of electric vehicles (EV), deploying renewable energy, liquefied natural gas needs (LNG), using electricity centers of data centers and improving performance.

In Steps, IEA predicts that the global electricity demand will nearly doubled in 2050, an incredible increase from 26,000 TWH in 2023 to 50,000 TWH. From 2023 to 2035, the average growth rate of nearly 1,000 TWH each year, equivalent to adding one Japan to global electricity consumption each year.

In the near future, new fields appear (such as data centers, digitization) pushing global demand to increase sharply and forecasting can double by 2050.

Efficiency also sets a significant adjustment element. According to sensitivity analysis, low energy efficiency can cause electricity demand for equipment and cooling in emerging markets and developing economies higher than about 340 TWH (5%) than Steps in 2035.

Energy security is increasingly dependent on electricity

WEO 2024 clearly distinguishes the demand for electricity and peak electricity demand, emphasizing this and considering it as the foundation for energy security. “There are two core elements of electrical security, which is the ability to ensure sufficient capacity to meet the peak (sufficient) needs and the ability to manage fluctuations in both demand and flexible renewable energy supply.” Of all IEA scenarios, the peak electricity demand is expected to increase faster than electricity demand in general. It is likely that 80% faster in emerging markets and developing economies in 2035.

One reason is that more renewable energy is increasing the likelihood of supply and demand imbalance, but the change is also becoming more clear at the season when many areas use heating system, as well as electricity cooling and more and more households use electricity.

IEA forecasts: Solutions that adapt to demand will increase when using smart meters, dynamic price and devices that change demand. Seasonal flexibility will continue to rely on hydroelectricity, thermal power, even the electricity output of renewable energy will be reduced and in addition to emerging contributions from long -term hydrogen storage.

According to IEA: The battery becomes essential for moderation capacity and is expected to have more than 1,700 GW of battery power will be added to Steps until 2035. Investing in the grid increased by nearly 70% and investing in battery storage nearly tripled by 2030 to serve the goal of modernization and upgrade.

The pressure of power supply is increasing

Currently, the world in general still depends heavily on fossil fuels to generate electricity. From 2010 to 2023, coal power output increased by nearly 2,000 TWH (+23%), while the electricity output of gas increased by more than 1,700 TWH (+36%). The demand for electricity increases far beyond the expansion of clean energy.

In emerging economies (such as India and Indonesia), coal is forecasted to be the backbone of the electricity industry, the use of fossil fuels has not decreased and remains almost the current level until 2030 according to the Steps.

Overall, global coal electricity output is expected to decrease by more than 10% by 2030, while electricity output from gas increases slightly (+5%). In the “advanced economy”, the use of coal is expected to decrease by 50% and gasoline decreased by 15% by 2050.

Overall, fossil fuels decreased from 60% in 2023 to only 19% in 2050.

However, IEA is still optimistic about nuclear power, currently providing 9% of the world’s electricity output (2,765 TWH in 2023), which can be increased due to being supported by a combination of longevity, new construction and bringing existing reactors back to operation.

The Steps scenario shows that the total nuclear power production may increase significantly to 4,460 TWH in 2050 (from an increase of 416 GW in 2023 to 647 GW in 2050).

According to WEO 2024, renewable energy will account for the majority in clean energy growth. By 2030, renewable energy is expected to nearly double the output in 2023, increasing from 9,029 TWH to 17,577 TWH, mainly thanks to solar photovoltaic (PV) and wind, with an average annual average growth rate (CAAGR) respectively 22% and 12%.

The photovoltaic power will increase the market share in the total electricity output from 5% in 2023 to 17% in 2030 and 37% in 2050, while the wind energy will increase from 8% in 2023 to 21% in 2050.

According to IEA: The speed of conversion to the current clean energy is still slow. If the electricity industry wants to lead the road towards the target of net emissions of zero, the new low emission options need to be prioritized. Like small modular reactors; Deploying technologies seizing, using and storing carbon (CCUS) and the use of hydrogen and ammonia emissions.

By 2035, fossil fuels with CCUS and hydrogen, low emissions started to create an impact in the Nze scenario: “Together providing 1,100 TWH compared to what is in Steps, making them an important pillar in the energy carbon reduction of the energy industry after 2035”.

Natural gas demand increased, but not sustainable

In recent years, the demand for natural gas has decreased, due to the complex combination of electricity demand increased, transformed from coal to gas, as well as the role of an important flexible supplier to integrate wind power and solar power PV. Although IEA sketched a long list of uncertainty elements that could change the gas segment, in general, the demand for gas will continue to increase since the third decade of this century.

IEA said that there is an uncertain reason around the demand growth, causing unstable burning gas growth. According to Steps, global electricity demand will increase by 2.9% per year in the period of 2023 and 2040. While electricity can help meet the growth demand in the short term, in the long term, the use of electricity can be unstable.

In Steps, the average power factor of natural gas plants in advanced economies decreased from 36% in 2023 to 31% in 2030 and 26% by 2035.

Currently, the technical potential to convert from coal to gas is still very large, about 450 billion cubic meters (BCM). If the price of natural gas is low enough, Steps can open 300 BCMs to switch in China, India and Southeast Asia.

IEA also noted: The conversion from oil to gas in the Middle East, with an oil -powered electricity output of about 340 TWH in the region in 2023 can promote the demand for natural gas to increase. Challenges in expanding renewable energy, including delays in licensing, interrupting supply chains and grid connection issues for wind power, PV solar power, especially in the United States, European Union (EU), can also activate this trend. However, the progress of deploying PV solar power quickly can slow the growth of natural gas.

The Chinese factor creates an undeniable influence

Finally, to distinguish Weo 2024 from the previous versions, IEA experts repeatedly emphasized China’s rise as a decisive factor in the global energy market. Today, China has been one of the most powerful electrification economies in the world for a variety of reasons (manufacturing fields, industry and policies of this country). For example, in the past decade, the efforts to fight air pollution in cities have caused the number of electricity heating people to double.

“China will affect everyone. Simply, because the huge new electricity that this country needs from now until 2035 is very large. It is forecasted that an equal amount of electricity with the current electricity needs of the United States will be added to China’s system. Therefore, the choices that China will have a profound impact on the world, especially for energy,” Laura Cozzi

China is currently leading the world in wind power, sun and currently 30 nuclear reactors are being built. In addition, China accounts for more than half of the demand for global coal. And yet, China’s electric car revolution will cut 5 million barrels of oil consumed every day by 2035.

According to IEA: China’s rise as a central factor highlights the significant transformation in the “new energy market context” is expected to be formed since 2025, marked by fierce competition and escalating geopolitical tensions. In the context of these changes, global cooperation will be essential to solve the developing challenges of energy security and the increasing impacts of climate change.

Cre: Vietnam Energy Magazine