Renewables are expanding quickly but not enough to satisfy a strong rebound in global electricity demand this year. Therefore, it may result in a sharp rise in the use of coal power that risks pushing carbon dioxide emissions from the electricity sector to record levels next year. After falling by about one per cent in 2020 due to the impacts of the COVID-19 pandemic, global electricity demand is set to grow by close to five per cent in 2021, while four per cent is expected by 2022. This rise is mainly driven by the global economic recovery. Most of the increase in electricity demand is expected to come from the Asia Pacific region, primarily China and India. Based on current policy settings and economic trends, electricity generation from renewables, including hydropower, wind and solar PV, is on track to grow strongly around the world over the next two years by eight per cent in 2021 and by more than six per cent in 2022.
Renewable growth has exceeded demand growth in only two years: 2019 and 2020. But in those cases, it was largely due to exceptionally slow or declining demand, suggesting that renewables outpacing the rest of the electricity sector is not yet the new normal. To achieve this decline, the pathway calls for coal-fired electricity generation to fall by more than six per cent a year. However, coal-fired electricity generation is set to increase by almost five per cent this year and by a further three per cent in 2022, potentially reaching an all-time high, according to the Electricity Market Report. Gas-fired generation, which declined two per cent in 2020, is expected to increase by one per cent in 2021 and by nearly two per cent in 2022. The growth of gas lags that of coal because it plays a smaller role in the fast-growing economies in the Asia Pacific region, and it faces competition from renewables in Europe and North America.