Wind energy ‘needs to grow faster’ to keep up with rising demand — IEA

Energy demand and power emissions at "unprecedented” levels call for higher investment in renewables

The IEA's executive director Fatih Birol warned that market volatility and continued high emissions would continue in the near term
The IEA's executive director Fatih Birol warned that market volatility and continued high emissions would continue in the near term

With energy demand surging and emissions from the power sector at a record high, the International Energy Agency (IEA) has called on governments around the world to accelerate plans to move to low-carbon technologies such as wind power.

Last year saw a 6% rise in global electricity demand compared with 2020 —– an increase of over 1,500TWh – the largest ever in absolute terms and the largest in percentage terms since 2010, according to the January 2022 edition of the IEA’s semi-annual Electricity Market Report.

The IEA warned last year that electricity demand is outpacing renewables. This latest report confirms the 6% rise in electricity produced from renewable sources in 2021 was not enough to keep up with what the IEA called "galloping" demand. As a result, generation from coal rose 9%, reaching an all-time peak, while gas generation was up 2%, increasing the power sector's CO2 emissions by a record 7%.

The rebound of coal and gas in some countries was partly due to low growth in renewables generation, the report notes, particularly in Europe, where renewables generation was up just 1% because of 'exceptionally low' wind speeds.

In Germany, for example, renewables generation fell for the first time in more than 20 years – down 4.5% – due to low wind speeds. Low wind speeds in the UK also saw total renewable generation fall by 14%. Together with a 5% increase in electricity demand, this led to a 17% increase in gas-fired electricity supply and a more than 20% increase in electricity sector CO2 emissions – the first rise since 2012.

Across Europe, coal-fired generation increased by more than 11% (after a 20% decline in 2020), serving 40% of Europe's incremental demand, while nuclear generation in Europe grew by 6% to meet 30% of the continent’s incremental demand.

The IEA expects a return to historical average wind speeds in Europe, with renewables growth crowding out fossil fuels and compensating for declining nuclear generation over the next three years.

With power prices and the sector's emissions rising to “unprecedented levels”, additional market volatility and continued high emissions will be inevitable over the next three years unless the sector invests in renewables, energy efficiency and nuclear power, as well as smart electricity grids, according to IEA executive director Fatih Birol.

“Emissions from electricity need to decline by 55% by 2030 to meet our Net Zero Emissions by 2050 Scenario, but in the absence of major policy action from governments, those emissions are set to remain around the same level for the next three years,” said Birol. “Not only does this highlight how far off track we currently are from a pathway to net zero emissions by 2050, but it also underscores the massive changes needed for the electricity sector to fulfil its critical role in decarbonising the broader energy system.”

For 2022-2024, the report anticipates electricity demand growing 2.7% a year on average, and renewables to grow by 8% a year on average. 

Globally, the current trends will only result in a plateauing of emissions from electricity generation, leaving the power sector unable “to fulfil its critical role as a leading force in the decarbonisation of economies around the world", the report says.

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