The upward trend in demand has only been interrupted twice over the past 20-plus years: in 2009, when global electricity consumption dipped by 0.7% due to the global financial crisis, and in 2020, when electricity demand went down by 0.3% due to the COVID-19 pandemic.
A key driver of electricity demand has been rapid economic growth in the Asia-Pacific, where coal plays an important role in the energy mix of every country. For instance, coal-fired power generation in the Asia-Pacific almost tripled (to 6,343 TWh) in the period from 2000 to 2014, with the region’s share in the global structure of coal-fired power generation reaching 65% (versus 36% in 2000). This largely explains the golden age of coal, which took place between 2000 and 2014, when the growth in global demand for solid fuel reached 62.7 exajoules (EJ), exceeding the level of 1965–2000 by 1.5 times (an increase of 40.7 EJ).
The OECD countries have also continued to drive demand, extending electrification to not only transport, but also other sectors of the economy. For instance, the share of electricity in energy consumption by the commercial real estate segment in the United States rose from 38% to 61% in the period from 1979 to 2018 due to office buildings transitioning to electric heating along with the development of air conditioning systems and the digitalisation of workplaces. It is no coincidence that the share of fuel oil in the sector’s energy consumption nosedived from 14% to 1% in the same period, with the share of natural gas falling from 44% to 34% and the share of district heating hovering at 4%, according to the U.S. Energy Information Administration (EIA).
The growth in demand for electricity has also been facilitated by the development of renewable energy infrastructure: according to IRENA, the global installed capacity of power plants using renewable energy sources more than doubled in 2013–2022, skyrocketing from 1,566 GW to 3,372 GW. As a result, the growth in demand for renewable energy sources in 2013–2022 reached 29.4 EJ, which is only half the increase in demand for coal in the aforementioned golden age (an increase of 62.7 EJ in 2000–2014). This assessment was provided by the Energy Institute based on the “input-equivalent” indicator, which reflects the amount of fossil fuel needed to generate electricity produced from renewable energy sources.
Global electricity demand is likely to continue to grow in the coming years due to, in part, the electrification of transport, increased availability of power grids in Africa and the development of off-grid power generation technologies.
