ElectricityMarketReportUpdateOutlookfor2023and2024TheIEAexaminesthefullspectrumofenergyissuesincludingoil,gasandcoalsupplyanddemand,renewableenergytechnologies,electricitymarkets,energyefficiency,accesstoenergy,demandsidemanagementandmuchmore.Throughitswork,theIEAadvocatespoliciesthatwillenhancethereliability,affordabilityandsustainabilityofenergyinits31membercountries,13associationcountriesandbeyond.Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Source:IEA.InternationalEnergyAgencyWebsite:www.iea.orgIEAmembercountries:AustraliaAustriaBelgiumCanadaCzechRepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNewZealandNorwayPolandPortugalSlovakRepublicSpainSwedenSwitzerlandRepublicofTürkiyeUnitedKingdomUnitedStatesTheEuropeanCommissionalsoparticipatesintheworkoftheIEAIEAassociationcountries:ArgentinaBrazilChinaEgyptIndiaIndonesiaKenyaMoroccoSenegalSingaporeSouthAfricaThailandUkraineINTERNATIONALENERGYAGENCYElectricityMarketReportUpdateAbstractOutlookfor2023and2024PAGE3IEA.CCBY4.0.AbstractSincethereleaseoftheIEA’sElectricityMarketReport2023inFebruary,theglobalenergycrisishascontinuedtoaffectmanypartsoftheworld.Highercostsforenergycommoditiesaswellaseconomicslowdownsinvariousregionsarestillimpactingelectricitymarkettrendsacrosstheglobe.Thisreportpresentsourlatestdatafor2022aswellasforecastsforglobalelectricitydemand,supplyandemissionsthrough2024.ThelatestdevelopmentsinChina,UnitedStates,EuropeanUnion,andIndiaareexplored.Wholesaleelectricityprices,whichremainabovepre-2021levelsinmanyregions,arealsodiscussedindetail.TheupdateincludesaspecialfocusontherecentevolutionofelectricitydemandinEuropeanditsdrivers.Theimpactofweatheronelectricitydemandandsupply,whichisincreasinglyevidentglobally,isalsocoveredinadedicatedanalysis.ElectricityMarketReportUpdateAcknowledgementsOutlookfor2023and2024PAGE4IEA.CCBY4.0.Acknowledgements,contributorsandcreditsThisstudywaspreparedbytheGas,CoalandPowerMarkets(GCP)DivisionoftheInternationalEnergyAgency(IEA).ItwasdesignedanddirectedbyErenÇam,EnergyAnalystforElectricity.Themainauthorsare:ErenÇam,JohnMoloney,andFrancysPintoMiranda.KeisukeSadamori,directoroftheIEAEnergyMarketsandSecurity(EMS)DirectorateandDennisHesseling,HeadofGCPprovidedexpertguidanceandadvice.ValuablecommentsandguidancewereprovidedbyotherseniormanagementwithintheIEA,inparticular,LauraCozzi.ExpertguidanceandvaluableinputofCarlosFernándezÁlvarez,SeniorEnergyAnalystisgreatlyappreciated.ManyIEAcolleaguesprovidedvaluableinput,commentsandfeedback,inparticularYasminaAbdelilah,HeymiBahar,StéphanieBouckaert,LouisChambeau,ElizabethConnelly,JavierJorqueraCopier,CaroleEtienne,KeithEverhart,TakeshiFurukawa,PabloHevia-Koch,ArneLilienkamp,GergelyMolnár,YannickMonschauer,HiroyasuSakaguchi,BrentWanner.TheauthorswouldalsoliketothankGregoryViscusiandJuliaHorowitzforskilfullyeditingthemanuscript,andalsoAstridDumondandJethroMullenfromtheIEACommunicationandDigitalOfficefortheirassistance.ElectricityMarketReportUpdateTableofcontentsOutlookfor2023and2024PAGE5IEA.CCBY4.0.TableofcontentsExecutivesummary..............................................................................................................6Demand:Globalelectricitydemandgrowthexpectedtoeasein2023........................10RobustgrowthinelectricitydemandinChinaandIndia,declinesintheUSAandtheEU.....11Isenergy-intensiveindustryleavingEurope?..........................................................................13Coolingdemandisanincreasingchallengefortheworld’spowersystems............................17Supply:Renewablegenerationsettoovertakecoal.....................................................21Renewablesaloneareexpectedtomeetallelectricitydemandgrowthin2023and2024.....22Declinesinfossil-firedelectricitygenerationarebecomingstructural.....................................23Coal-firedgenerationincreasesinChinaandIndia,whileitshrinksintheUSandtheEU....24Arelowerhydropowercapacityfactorsthenewnormalinsomeregions?..............................25Emissions:Emissionsfrompowergenerationpoisedtodipslightlythrough2024.29IncreasesinemissionsinAsiaareoffsetbydeclinesinotherregions....................................29Emissionintensityofpowergenerationissettofallatafasterpace......................................30Prices:Wholesaleelectricitypricesremainelevatedinmanyregions.......................32HighpricesinEuropecontrastwithlowerpricesintheUnitedStates.....................................32Pricesunderscoreincreasedneedforflexibility.......................................................................33Generalannex.....................................................................................................................38Summarytables.......................................................................................................................38Regionalandcountrygroupings..............................................................................................40Abbreviationsandacronyms....................................................................................................42Unitsofmeasure......................................................................................................................42ElectricityMarketReportUpdateExecutivesummaryOutlookfor2023and2024PAGE6IEA.CCBY4.0.ExecutivesummaryFallingelectricityconsumptioninadvancedeconomiesweighsonglobalgrowthinpowerdemandGlobalelectricitydemandgrowthisexpectedtoeasein2023beforeacceleratingin2024.Demandisexpectedtogrowbyslightlylessthan2%in2023,downfromarateof2.3%in2022andtheaverageannualgrowthrateof2.4%observedoverthe2015-2019period.Thismoderationisstronglydrivenbydecliningelectricitydemandinadvancedeconomies,whicharedealingwiththeongoingeffectsoftheglobalenergycrisisandslowereconomicgrowth.In2024,asexpectationsfortheeconomicoutlookimprove,globalelectricitydemandgrowthisforecasttoreboundto3.3%.ElectricitydemandintheEuropeanUnionissettodeclinein2023forthesecondyearinarow,fallingtoitslowestlevelintwodecades.EUelectricitydemandisexpectedtorecorda3%dropin2023,afteralreadyfalling3%in2022.Thisisdespitestronggrowthinelectrificationwitharecordnumberofelectricvehiclesandheatpumpssold.Followingthesetwoconsecutivedeclines,whichtogetheramounttotheregion’slargestslumpindemandonrecord,EUelectricitydemandissettodroptolevelslastseenin2002.Europe'senergy-intensiveindustrieshavenotyetrecoveredfromlastyear’sproductionslump,asevidencedbythestaggering6%year-on-yeardeclineintotalEUelectricitydemandduringthefirsthalfof2023.Almosttwo-thirdsofthenetreductioninEUelectricitydemandin2022isestimatedtobefromenergy-intensiveindustriesgrapplingwithelevatedenergyprices.Thistrendhascontinuedwellinto2023,despitethepricesforenergycommoditiesandelectricityfallingfromtheirpreviousrecordhighs.AspolicydevelopmentsabroadcourtingindustrialinvestmentputpressureonEurope’sindustrialcompetitiveness,theEuropeanUnionisatacrossroads.Theoutcomeofpolicydiscussionsnowunderwaycoulddeterminethefutureofitsenergy-intensiveindustrialsector.ThesubstantialdemanddeclinesinadvancedeconomiescontrastsharplywiththegrowthobservedinemergingeconomiessuchasChinaandIndia.Japanissimilarlyexpectedtorecordasignificant3%fallinelectricitydemandin2023,whiletheUnitedStatesissettoseeadecreaseofalmost2%.Incontrast,China'selectricitydemandisexpectedtoincreaseby5.3%in2023and5.1%in2024,slightlybelowits2015-2019averageof5.4%.Indiaissettohaveanaverageannualgrowthrateof6.5%overtheoutlookperiod,surpassingits2015-2019averageof5.2%.ElectricityMarketReportUpdateExecutivesummaryOutlookfor2023and2024PAGE7IEA.CCBY4.0.Declinesinfossil-firedelectricitygenerationarebecomingstructuralTheacceleratedpaceofnewrenewablecapacityadditionsshowsthatrenewablegenerationcouldsurpasscoalasearlyas2024,ifweatherconditionsarefavourable.Thisissupportedbytheexpectationthatcoal-firedgenerationwillslightlydeclinein2023and2024afterrising1.5%in2022,whenhighgaspricesboosteddemandforalternatives.Increasesincoal-firedgenerationinAsiain2023and2024arepoisedtobeoffsetbystrongdropsintheUnitedStatesandEurope.Renewablesaresettomeetalladditionaldemandin2023and2024.Withglobaldemandgrowtheasingin2023,incrementalincreasesinrenewablesaloneareexpectedtocoveralladditionaldemandnotonlythisyear,butalsoin2024,whendemandgrowthisexpectedtoaccelerateagain.By2024,theshareofrenewablegenerationinglobalelectricitysupplywillexceedone-thirdforthefirsttime.By2024,electricitygenerationfromfossilfuelsisexpectedtohavefallenfourtimesinsixyears.Declinesinfossil-firedgenerationwererareinthepastandoccurredprimarilyafterglobalenergyandfinancialshocks,suchasfollowingtheoilcrisesofthe1970sorduringtheGreatRecessionin2009,whenoverallelectricitydemandwassuppressed.Butinrecentyears,fossil-firedsupplyhaslaggedorfallenevenwhenelectricitydemandexpanded.Thesetrends–drivenbythestronggrowthinrenewablegeneration–suggestthedeclinesinfossilelectricitygenerationarebecomingstructural.Theworldisrapidlymovingtowardsatippingpointwhereglobalelectricitygenerationfromfossilfuelsbeginstodeclineandisincreasinglyreplacedbyelectricityfromcleanenergysources.Emissionsfrompowergenerationarepoisedtodipslightlythrough2024IncreasesinemissionsfrompowergenerationinChinaandIndiaareexpectedtobemorethanoffsetbydeclinesinotherregions.TheEuropeanUnionaloneaccountsfor40%ofthetotaldeclineinemissionsfrompowergenerationexpectedtooccurin2023and2024,excludingChinaandIndia.TheEUisfollowedbytheUnitedStates,whererenewablesdeploymentisgrowingstrongly,andgasisincreasinglyreplacingcoal-firedsupply.Extremeweather,unexpectedeconomicshocksandchangestogovernmentpoliciescancauseanuptickinemissionsinspecificyears.However,theoveralltrendofglobalpowersectoremissionsplateauingisexpectedtopersist,withyearsinwhichemissionsdecline,notrise,becomingmorefrequent.ElectricityMarketReportUpdateExecutivesummaryOutlookfor2023and2024PAGE8IEA.CCBY4.0.WholesaleelectricitypricessignalincreasedneedforflexibilityThenumberofhoursinwhichelectricitypricesdroppedbelowzerodoubledinEuropeancountriessuchasGermanyandNetherlandsinthefirsthalfof2023comparedtothesameperiodin2022.Thiswasdrivenbystrongrenewablesoutputattimesofsignificantlyreduceddemand.Meanwhile,inothermarketssuchasSouthAustralia,whichhasaveryhighpenetrationofvariablerenewables,thetrendwasevenstarker.Pricesonthewholesaleelectricitymarkettherefellbelowzeroalmost20%ofthetimein2022,comparedtolessthan1%ofthetimeinGermanyandtheNetherlands.Negativepricesindicategenerationisnotsufficientlyflexible,thedemandsideisnotadequatelyprice-responsiveorthereisnotenoughstoragetoconductenergyarbitrage.Negativepricesalsoprovidesignalstoinvestinsolutionsandtechnologiestoimprovesystemflexibility.Thesesignalswillhavetobeaccompaniedbyupdatedregulatoryframeworkstoincentivisedemand-sideflexibilityandstorageinordertoincreasetheflexibilityofthebroadersystem.Wholesaleelectricitypricesremainelevatedinmanycountriesdespitesubstantialdeclines,althoughthereareregionaldifferences.Aspricesforenergycommoditiessuchasgasandcoalhavefallensignificantlyinthefirsthalfof2023,wholesaleelectricitypricesinmanyregionshavedeclinedfromtheirpreviouspeaks.Europeanwholesalepriceshalvedfromtheirrecordhighsin2022,fallingclosertotheir2021average.Despitethis,averagepricesinEuropearestillmorethandouble2019levels.Similarly,averagewholesaleelectricitypricesinIndiainthefirsthalfof2023werestill80%higherthan2019levels,andinJapantheywere30%highercomparedto2019.Incontrast,wholesaleelectricitypricesintheUnitedStateshavealmostfallenbackto2019levels.ImpactofweatheronelectricitydemandandsupplyisincreasinglynoticeableRisingdemandforcoolingisstrainingtheworld’spowersystems.Summerswithextremetemperaturesarebecomingmorefrequentinmanyregions,elevatingelectricitydemandforcoolingsystemsandstretchingpowersupplies.Asmorehouseholdsstartpurchasingairconditioners,theimpactwillincreaseinmanycountries–especiallyinemergingeconomiesthatcurrentlyhaveamuchlowershareofhouseholdswithACthanadvancedeconomieswithcomparableclimates.Settinghigherefficiencystandardsforairconditioningwouldgreatlyhelplimittheimpactofadditionalcoolingdemandonpowersystems.Toensuresystemreliability,itwillbecrucialtohaveadequatebackupgenerationcapacities,encouragedemandmanagementandenergystorage,accelerategridinvestments,andenhancefuelsupplysecurityforpowerplants.InsufficientElectricityMarketReportUpdateExecutivesummaryOutlookfor2023and2024PAGE9IEA.CCBY4.0.preparednessintheseareascouldleadtomorefrequentstressongrids,resultinginload-sheddingandblackouts.Theavailabilityofhydropowerrequiresgreaterattention.Thecapacityfactorofglobalhydropowerhasbeenindeclineoverthepastdecade,fallingfromanaverageof38%in1990-2016toabout36%in2020-2022.Thisdifferenceoftwopercentagepointsmeansthat,globally,today’shydropowercapacityisproducingabout240TWhlesselectricityperyearthanwouldhavebeenthecaseifcapacityfactorshadremainedunchanged.ThisindicatesavolumeofenergyaslargeasSpain’sannualelectricityconsumptionneedstobesuppliedinsteadbyothersources,agapthatiscurrentlyfilledmostlybyfossil-firedgeneration.RecentyearssawintensedroughtsthatcausedasignificantreductioninhydropoweravailabilityinaffectedregionssuchasEurope,BrazilandChina.Anticipatingchallengesonhydropowerrelatedtoclimatechange,andplanningaccordingly,willbecrucialfortheefficientandsustainableuseofhydroresources.ElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE10IEA.CCBY4.0.Demand:Globalelectricitydemandgrowthexpectedtoeasein2023Russia’sinvasionofUkraineandtheensuingglobalenergycrisisignitedinflationandstifledeconomicgrowthinmanypartsoftheworld,asspikinggasandcoalpricesraisedthecostofpowergenerationanddroveupelectricitybills.Despitetheseheadwinds,globalelectricitydemandremainedresilientin2022,growingby2.3%.Theimpactsofthecrisiscontinuedinto2023,witheconomicslowdownsobservedinvariousregionsandparticularlypronounceddeclinesinelectricitydemandinadvancedeconomies.Asaresult,despiterobustgrowthinemergingeconomiesaswellasrecordelectricvehicleandheatpumpsalesleadingtorisingelectrificationratesinthetransportandresidentialsectors,globalelectricitydemandgrowthisexpectedtobesubduedin2023.Ourpreviousgrowthforecastof2.6%hasbeenreviseddownwardto1.9%,whichisslowerthanthe2.4%averageannualgrowthoverthe2015-2019period.Weforecastglobalelectricitydemandwillgrowatahigher3.3%ratein2024astheeconomicoutlookimproves.Year-on-yearpercentchangeinelectricitydemandinselectedregions,2019-2024IEA.CCBY4.0.-12%-8%-4%0%4%8%12%201920202021202220232024201920202021202220232024201920202021202220232024201920202021202220232024201920202021202220232024201920202021202220232024WorldChinaIndiaSoutheastAsiaUnitedStatesEuropeanUnionHistoricaldemandgrowthUpdatedforecastPreviousforecast(Feb2023)ElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE11IEA.CCBY4.0.RobustgrowthinelectricitydemandinChinaandIndia,declinesintheUSAandtheEUAfteramoderate3.7%year-on-yearincreaseinelectricitydemandin2022,weexpectthePeople’sRepublicofChina(hereafter,“China”)tosee5.3%growthin2023.Althoughtheeconomicreboundfollowingtheeasingofstrictpandemicrestrictionshasnotbeenasstrongassomehadanticipated,increasingcoolingdemandinthesummerof2023isexpectedtofurtherboostelectricitydemand.For2024,weforecastdemandgrowthtobeslightlylowerat5.1%.Year-on-yearchangeinelectricitydemandinselectedregions,2019-2024IEA.CCBY4.0.Note:Thefiguresfor2023and2024areforecastvalues.InIndia,thestrongpost-pandemicrecovery,combinedwithintenseheatwaves,droveelectricitydemandupby8.4%in2022.Weexpectthestronggrowthtrendtocontinuein2023,atarateof6.8%.Growthof6.1%isforecastin2024,bywhenIndia’selectricityconsumptionisexpectedtosurpassthatofJapanandKoreacombined.TherapidlyincreasingdemandinIndiawillcontinuetobedrivenbyanuptickinhouseholdappliances,ariseinelectricalmachineryusage,anincreaseinelectricvehicles,andfurtherexpansionincoolingsystems.ElectricitydemandintheUnitedStatesroseby2.6%in2022,drivenbyeconomicgrowthaswellasincreasedheatingandairconditioninguse.Whiletheweatherinearly2023hasbeenmilderthanayearearlier,scorchingsummertemperatures,-800-400040080012001600201920202021202220232024TWhChinaIndiaUnitedStatesEuropeanUnionSoutheastAsiaJapanOthersNetchangeElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE12IEA.CCBY4.0.especiallyinTexas,areexpectedtodriveupelectricityconsumptionforcooling.Despitethat,overallcoolingdemandisestimatedtohavefallenyear-on-yearduringH12023,asotherregionshavehadamildersummersofar.Atthesametime,slowingeconomicgrowthisputtingdownwardpressureonelectricitydemand,asindicatedbythe16%year-on-yeardeclineintheaveragemanufacturingPurchasingManagers’IndexinH12023.WeexpectelectricityconsumptionintheUStodeclineby1.7%in2023andthenreboundin2024atamoderate2%rate.EvolutionofelectricitydemandintheEuropeanUnion(left)anditsyear-on-yearpercentchange(right),1991-2024IEA.CCBY4.0.Note:Thefiguresfor2023and2024areforecastvalues.TheEuropeanUnion’selectricityconsumptiondecreasedby3.2%in2022,thesecondlargestdropsincethe2009globalfinancialcrisis,exceededonlyby2020’splungeduetoCovid-19.Thedownwardtrendbecameapparentinthesecondhalfof2022andcontinuedwellintothefirsthalfof2023.EUelectricitydemandinH12023fellalmost6%fromthesameyear-agoperiod.Forthefullyearweexpectanoveralldropindemandof3%.Withthat,EUelectricityconsumptionwillhavedeclinedfortwoyearsinarowatarateunprecedentedsincethefoundationoftheUnion.Weanticipateamodest1.7%reboundin2024,butwithsignificantuncertaintylinkedtotherecoveryofindustrialdemand.Thebiggestquestionishowmuchofthereductionindemandwastemporaryandhowmuchwillbepermanent.050010001500200025003000199119941997200020032006200920122015201820212024TWh-6%-4%-2%0%2%4%6%199119941997200020032006200920122015201820212024ElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE13IEA.CCBY4.0.Isenergy-intensiveindustryleavingEurope?InarecentanalysisdiscussingEUelectricitydemandin2022,weshowedthatweatherhadamorelimitedeffectthanpreviouslythought,astheexceptionallymildwinterwaspartlyoffsetbyadditionalcoolingneedsduringthehottersummer.Mostofthedemandreductionoccurredbecauseofnon-weather-relatedfactors,withnearlytwo-thirdsofthenetdeclineestimatedtobeduetothereductionindemandfromenergy-intensiveindustriesamidhighenergyprices.Behaviouralchangesintheresidentialandservicessectors,voluntaryenergysavings,affordabilityissues,andavarietyofefficiencyimprovementsalsoplayedasignificantrole.EstimateddriversofchangeinelectricitydemandintheEuropeanUnion,2022vs.2021IEA.CCBY4.0.Note:Otherencompassesbehaviouralchangesinconsumptionintheresidentialandservicessectors,energysavings,reductionsduetoaffordabilityissuesandefficiencygains.Manyenergy-intensiveindustriesreducedorceasedproductionin2022Amongtheenergy-intensivesectorswhichsignificantlyreducedproductionin2022becauseofplantshutdownsandproductioncurtailmentswereprimaryaluminium(-12%),crudesteel(-10%),paper(-6%)andchemicals(-5%).ThedecreaseindomesticchemicalproductionledtoEuropebecominganetimporterofchemicalsin2022askeyindustryplayerssuchasBASFandOCIreducedoutputintheregion.Thefertiliserindustryhasseenasharpreductionwithlarge-20-52-31+14+8242024402460248025002520254025602021OtherIndustryLessheatingMorecoolingNewelectricvehicles&heatpumps2022TWh25512470ElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE14IEA.CCBY4.0.EuropeanproducerssuchasYaraandGrupaAzotycurtailingproductionofammonia,urea,nitratesandNPK(nitrogen,phosphorus,andpotassium)fertiliser.SteelproductioninEuropehasdecreasedsignificantlyascompaniessuchasArcelorMittaltemporarilyshutfurnacesinFrance,Poland,SpainandGermany.Aluminiumproducershavebeenbadlyhitbyincreasedelectricitypricesgiventheelectricity-intensivenatureofthesector,withseveralcompaniessuchasSpeiraGmbHandAlrocuttingproduction.Noreboundinoverallenergy-intensiveindustrialoutputinsightinthefirsthalfof2023Forthefirsthalfof2023,weatherhadalimitedimpactonthestaggering6%year-on-yeardeclineinoverallelectricitydemandinEuropeasamilderJanuarywaslargelyoffsetbyacolderFebruary.Consequently,themaindriversofthedeclineinH12023havebeennon-weather-relatedfactors,withnosignificantreboundintheoveralloutputofenergy-intensiveindustriesdespitewholesalepricescomingdownfromtheirrecordhighs.Somecompaniesinthesteelindustrystartedreversingtheircurtailmentsthathadbeenimplementedin2022.However,insectorssuchasaluminium,temporaryproductioncutswerefollowedbypermanentclosures,producerssuchasTalumandSlovalcobeingtwoexamplesofcompaniespermanentlyhaltingtheproductionofprimaryaluminium.Monthlyelectricitydemandin2021-2023YTDintheEuropeanUnion(left)andyear-on-yearchangesinQ12023inindustrialoutputandestimatedelectricityconsumptioninselectedindustries(right)IEA.Allrightsreserved.Source:IEAanalysisbasedondatafromIEA(2023),MonthlyElectricityStatistics;Eurostat(2023),FinalEnergyconsumptioninindustry;CEFICChemicalMonthlyReport,InternationalAluminiumInstitute,WorldSteelAssociation.150160170180190200210220230240250TWh20212022H12023weather-correcteddemand-25%-20%-15%-10%-5%0%5%10%15%20%25%-15-12-9-6-303691215TWhChangeinelectricityconsumption(leftaxis)Percentchangeinindustrialoutput(rightaxis)ElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE15IEA.CCBY4.0.IndustrialcompetitivenessinEuropeisunderpressureThecompetitivenessofEuropeanenergy-intensiveindustryisthreatenedbyhighenergycosts.Anotherchallengeissupportpackagesoverseas,suchastheInflationReductionAct(IRA)inAmerica,theGreenTransformationActinJapanandtaxincentivesinChina.Thesedevelopmentsareinfluencingproductioncurtailment,plantclosures,andthepausinganddivertingofinvestment.ChemicalgroupBASFhasannouncedplantclosuresandpermanentdownsizinginEurope.VolkswagenpausedplansforabatteryplantinEasternEuropeandisinsteadbuildingafactoryinCanada,takingadvantageoflowerelectricitypricesandtheCanadianInflationReductionAct.GermanpaperproducerVarelabandonedplanstoexpandproductioncapacity,citinghighcostsanduncertaineconomicoutlookasthereasonsofitsdecision.Smallandmedium-sizedbusinessesinindustriessuchaspaperandautomationhavegoneinsolventashighenergypricesmeantheyarenolongerprofitable.BankruptciesamongEUbusinessesreachedarecordhighinQ42022,upabout27%percentfromthepreviousquarter,withhighenergycostsbeingamajordriver.Thevastmajorityweresmallandmedium-sizedenterprises.TheEUhastakenseveralstepstosupportindustry,firstrelaxingstateaidrulesbyadoptingtheTemporaryCrisisFrameworkinresponsetoRussia’sinvasionofUkraineandthenexpandingthistotheTemporaryCrisisandTransitionFramework.Theseframeworksenablememberstatestocompensatecompaniesforhighelectricitycosts,andgovernmentsacrossEuropeconsequentlyenactedpoliciestosupportenergy-intensiveindustry.Forexample,bothGermanyandFrancelaunchedEUR5billionaidprogrammeswithuptoEUR50millionavailableforeachoftheworstaffectedcompanies.Germanyhasproposedanelectricitypricecapforenergy-intensivecompaniestoensurethattheyremaininGermanyanddonotrelocateabroad.TheTemporaryCrisisandTransitionFrameworkalsoallowsstateaidforinvestmentinindustriesnecessaryforthetransitiontoanetzerocarboneconomy.InconjunctionwiththeCommission’sGreenDealIndustrialPlan,thesemeasuresadduptoanefforttocreateamoresupportiveenvironmenttotheindustrythatisfacingcompetitionfromabroad.ElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE16IEA.CCBY4.0.AselectionofcompaniesinEuropethathaveannouncedcurtailment,permanentshutdownsandabandoningofinvestmentplans,andtheaveragewholesaleelectricitypriceintheEuropeanUnionIEA.Allrightsreserved.Note:Thecompaniesshownwereselectedaccordingtotheavailabilityofpublicdataontheiroperations.Thefigureshowsthedateoftheannouncementanddoesnotnecessarilymeantheexactdateonwhichtheproductiondecisionswereimplemented.Announcementdateshavebeenroundedtothenearestmonthforclarityinpresentation.Averagemonthlywholesalepricesshowninthisfigurearedemand-weighted.3MMAstandsforthe3-monthmovingaverage.Thewholesaleelectricitypricedoesnotdirectlycorrespondtothepricepaidbytheindustry,butisintendedtoprovideanoverviewofthedevelopmentofenergycosts.Itshouldalsobenotedthatinsomeindustriesthatconsumelargeamountsofelectricity,gashasahighershareofenergyconsumption(e.g.,glassindustry)orisusedasafeedstock(e.g.,chemicalindustry).Intheseindustries,thepriceofgasplaysamoresignificantroleincostsandoperationaldecisionsthantheelectricityprice.Sources:Yara,YaraimplementsfurtherproductioncurtailmentsinEurope;GreenMarkets,YaraEndingNitrateandNPKCurtailmentsAmidStrongerEuropeanDemand;GMKCenter,ArcelorMittalbeginstemporaryshutdownsofsteelplantscapacitiesinEurope;GMKCenter,ArcelorMittalDunkirkplanstorestartBF№4inJune2023;Reuters,Nyrstar’sAubyzincplantoncareandmaintenanceuntilfurthernotice;Nyrstar,Nyrstar’splantinAuby,Franceresumesproductiononavariablebasis;Alro,TheprohibitivepowerandnaturalgasespricesforceALROGrouptotakedecisivedecisionsforpreservingtheGroup’sassetsvalue;Reuters,GrupaAzotyhaltsproductionoffertilizersduetohighgasprices;GrupaAzoty,GrupaAzotyGroupcompaniesresumeproduction;GMKCenter,TheItalianrollingmillAlvedishutdownthreeelectricarcfurnaces;S&PGlobal,Backinaction:Europeanmillsrestartidledblastfurnacesonhigherflatsteelprices;TheNewYorkTimes,‘Crippling’EnergyBillsForceEurope’sFactoriestoGoDark;LesseboPaper,€16millioninincreasedelectricitycostforcesLesseboPapertohaltproduction;FinancialTimes,BASFoutlinesfurthercost-cuttingand2,600joblossesasitdownsizesinGermany;Reuters,Germanytolooseninsolvencyrulesasenergycrisishitshard;Hydro,Slovalcowillstopprimaryaluminiumproduction;SeeNews,Slovenia’sTalumtohaltprimaryaluminiumoutput,cut120jobs-report;Reuters,Batterystart-upFreyracceleratesU.S.plansonIRAsupport;TheWallStreetJournal,HighNatural-GasPricesPushEuropeanManufacturerstoShifttotheU.S;Reuters,TeslascalesbackGermanbatteryplans,wonoverbyU.S.incentives;TheWallStreetJournal,VolkswagenPivotstoNorthAmericaasEuropeLosesItsShine;Reuters,Factbox:Europe’saluminiumsmelterscutoutputaspowercrunchintensifies;GlassInternational,Frenchglassproductionplantsreignitefurnacesafterenergyshutdowns;Reuters,Column:Europe’spowercrunchsparksaluminiumsmeltermeltdown:AndyHome;Reuters,Slovenia’sTalumcutsprimaryaluminiumoutputto20%ofcapacity.054108162216270324378100101102103104105106107108109110111112113114115116117118119120121Dec-21Feb-22Apr-22Jun-22Aug-22Oct-22Dec-22Feb-23Apr-23Jun-23Aug-23EUR/MWhProductioncurtailmentPermanentshutdownProductionresumptionProductioninvestmentabandonedorshiftedabroadWholesaleelectricityprice(3MMA)Yara(Fertiliser)ArcelorMittal(Steel)Nyrstar(Zinc)Alro(Aluminium)GrupaAzoty(Fertiliser)BASF(Chemicals)Görtz(Textile)DrSchneider(Automotive)Slovalco(Aluminium)Talum(Aluminium)Uniprom(Aluminium)Freyr(Batteries)OCI(Chemicals)Tesla(Automotive)Volkswagen(Automotive)Arvedi(Steel)LibertyGalati(Steel)ArcInternational(Glass)Lessebo(Paper)Company(Sector)Varel(Paper)ElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE17IEA.CCBY4.0.ThefutureofEUenergy-intensiveindustryisatacrossroadsInthefaceofrisingenergycosts,theEuropeanUnionstandsatacriticaljuncturetodecideitscourseofactionregardingenergy-intensiveindustries.Theoptionsrangefromminimalaid,whichwouldrequireashifttoahigh-valuegoodseconomybutalsoincreasevulnerabilitytogeopoliticaltensions.Atargetedaidstrategycouldprovidefiscalprudencewhileretainingcontroloverkeysectors.Anotheroptionentailsextensivesupportthroughenergypricesubsidies,preservingindustryandjobsbutburdeningotherconsumersandtaxpayers,andnecessitatingalong-termcommitment.Lastly,theEUcouldramp-updecarbonisationandrenewableenergyeffortstofuelgreenheavyindustry,whichwouldbeinlinewithitsclimategoalsbutbearsignificantupfrontcosts.Thereisnoeasypathforward,aseachchoicecomeswithitsownsetofchallengesandpotentialbenefits.Coolingdemandisanincreasingchallengefortheworld’spowersystemsExtremesummertemperaturesarebecomingmorefrequentinmanyregionsoftheworld,raisingelectricitydemandforcoolingandstrainingpowersystems.AshighlightedbytheIEA’sreportontheFutureofCooling,thereisenormousupsidepotentialfornewairconditionerinstallationsintheworld.TheshareofhouseholdsequippedwithairconditionersinemergingeconomiessuchasMexico,BrazilandIndonesiaislessthanone-thirdofthoseinadvancedeconomiessuchastheUnitedStates,JapanandKorea.AsmorehomesinstallACs,theirimpactonpowersystemswillgrowinmanycountries.SettinghigherefficiencystandardsforACscanreducetheirenergyburden.Forsystemreliability,itwillbecrucialtomaintainthenecessarybackupgenerationcapacities,incentivisedemandmanagementandstorage,accelerateinvestmentsingridsandstrengthenthesecurityoffuelsupplytopowerplants.Insufficientpreparednesscouldputadditionalstrainongrids,increasingthelikelihoodofload-sheddingandeventuallypoweroutages.Duringthesummerof2022,theTexaspowergridwitnessed11peakdemandrecords,leadingERCOTofficialstourgeenergyconservation.Similarly,inSichuan,China,unusuallyhightemperaturesinAugust2022ledtoasubstantialsurgeinelectricitydemandforcooling,strainingthegridandcausingapowershortage.Asaresult,consumerswereaskedtotakestepstoconserveenergy.Indiaalsoexperiencedwidespreadelectricityoutagesandload-sheddinginoverhalfofitsstatesduringtheheatwavesofApril-May2022,astheenergysystemstruggledtomeetrecordpowerusage.ElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE18IEA.CCBY4.0.Summer2023isbecominganotherstresstestforsystemadequacyinmanyregionsInChina,theChinaElectricityCouncilestimatesthatpeakdemandwillreach1370GWin2023,anincreaseofabout80GWcomparedto2022.Incaseofextremeweather,China’smaximumpowerloadisexpectedtoincreasebyaboutanadditional20GW.Chinesepowersupplyanddemandbalanceisthereforesettoremaintightthissummer.Toprepareforlarge-scalepoweroutages,inJune2023ChinaconducteditsfirstemergencydrillwiththeNationalEnergyAdministrationandregionalgovernmentsfromEastChina.Energyregulators,powergridandpowergenerationcompanies,theShanghaisubwaynetwork,hospitalsandthechemicalindustryalsoparticipatedintheexercise.IntheUnitedStates,theNationalOceanicandAtmosphericAdministrationforecastsa50%to70%likelihoodofhigher-than-averagetemperaturesforJunethroughSeptember2023inmostpartsofthecountry.Accordingtothe2023SummerReliabilityAssessmentofNERC,whileallregionsinNorthAmericahavesufficientgenerationtomeetsummerdemandandreserverequirementsundernormalconditions,energyshortagesmaystilloccurduringextremeoperatingconditionscausedbyheat,wildfires,andothergriddisturbances.TheNERCsuggeststhattheretirementofgenerationfacilitiesamidincreasedpenetrationofvariableenergyresources,highdemandinmultiplelocations,projectdelaysorgeneratormaintenancecouldfurtherexacerbatereliabilityrisks.EvolutionoftheannualgridpeakloadinTexas(left)andinIndia(right),2019-2023H1IEA.CCBY4.0.Sources:IEAanalysisbasedondatafromLoadGenerationBalanceReportsoftheIndianCentralElectricityAuthorityandERCOT81GW02040608010020192020202120222023H1GWTexas,USA223GW05010015020025020192020202120222023H1India30May15:0030Dec10:007Jul12:0010Jun15:009Jun15:0012Aug22:0013Aug22:0031Aug22:0020Jul22:0027Jun23:00ElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE19IEA.CCBY4.0.InIndia,CentralElectricityAuthority’sLoadGenerationBalanceReport2023-24,publishedinMarch2023,estimatesthatsub-regionsinIndiamayfacepowersupplydeficitsrangingfrom4%to11.3%oftheirrespectivepeakdemand.However,aseachregionisexpectedtoexperienceitspeakdemandatdifferenttimes,powerimportsandexportsbetweenregionswouldallowforsomebalancing.Thecountryasawholeisexpectedtohaveasurplusofonly0.7%tomeetthepeakelectricitydemand(estimatedataround230GW),indicatingatightsupplysituation.InJune2023,withincreasingtemperatures,peakdemandof223GWwasalreadyobserved.Indiahasinstalledsignificantsolargenerationcapacitiesinrecentyears,whichhelpsmeetdaytimepeakdemandforcooling.However,eveningpeakswhenthesundoesnotshinebuttemperaturesremainveryhighposeasignificantchallengetothesystem.Insucheveninghours,thesufficientavailabilityofdispatchablecapacitiesofhydro,coal-andgas-firedpowerplantsbecomescrucial.Newgenerationcapacityadditionsinrecentyearshavelaggedbehindtheincreaseinpeakpowerdemand,leadingtheMinistryofPowerinJune2023toissueguidelinesforResourceAdequacyPlanningFrameworkforelectricitytoensurethatgenerationcapacityisaddedatapacematchinggrowthindemand.Anewtariffschemewasalsooutlined,whichintroducesvaryingtime-of-daytariffsbetweensolarhours,normalhoursandpeakhourstoincentivisetheshiftingofdemandfromtheeveningtodaytime.Thenewtariffsaretocomeintoeffectduring2024and2025.Evolutionoftheforecastsforpeakload,availabilityandmarginoftheIndianCentralElectricityAuthorityvs.therealisedandmetpeakload,2019-2023IEA.Allrightsreserved.Note:Thepeakloadmetfor2023showsthehighestpeakloadrecordedtodateinthefirsthalfof2023(223GWon9June)thatwasmet.Forecastmarginreferstotherelativedifferencebetweentheavailabilityforecastandpeakloadforecast.Source:IEAanalysisbasedonLoadGenerationBalanceReportsoftheIndianCentralElectricityAuthority.+8.4%+9.1%+8.2%+3.4%+0.7%05010015020025020192020202120222023GWPeakloadforecastAvailabilityforecastPeakloadrealisedPeakloadmet%ForecastmarginElectricityMarketReportUpdateDemandOutlookfor2023and2024PAGE20IEA.CCBY4.0.InEurope,accordingtothesummeroutlookoftheEuropeanNetworkofTransmissionSystemOperatorsforElectricity(ENTSO-E),nomajoradequacyrisksareexpectedforthesummerof2023.Nevertheless,asshowninourrecentanalysis,additionaldemandfromcoolingremainssubstantial,especiallyinSouthernEuropeandFrance.Inthecaseofunexpectedunavailabilities,electricityimportswillplayasignificantroletomeetdemand,asalsohighlightedbytheENTSO-Eoutlook.ElectricityMarketReportUpdateSupplyOutlookfor2023and2024PAGE21IEA.CCBY4.0.Supply:RenewablegenerationsettoovertakecoalInDecember2022,IEA’sRenewables2022reportestimatedthatrenewablegenerationwillovertakecoalasthelargestsourceofelectricitybyearly2025.Ouranalysisnowshowsthismomentcouldcomeasearlyas2024underfavourableweatherconditionsasaresultoftheacceleratedpaceofrenewablecapacityadditionshighlightedintheRenewablesJune2023Update,aswellasbecauseoftheplateauingofelectricitygenerationfromcoal.Coal-firedgenerationgrewby1.7%in2022,supportedbygas-to-coalswitchinginmanyregionsduetohighgasprices,butisexpectedtodeclineslightlyin2023and2024asincreasesinAsiaareoffsetbystrongdeclinesintheUSAandEurope.Gas-firedpowergenerationremainedrelativelyflatin2022andweexpectaslightincreaseoflessthan1%in2023.ThisupwardrevisionfromourpreviousforecastismainlydrivenbystrongincreasesintheUnitedStatesaswellasareturntocoal-to-gasswitchinginvariousotherregionsbecauseoflowergasprices.However,acolderwinterandpotentialsupplyissues,especiallyinEurope,couldboostgaspricesagainandsupportrenewedgas-to-coalswitching.Globalelectricitygenerationbysource,2014-2024IEA.CCBY4.0.02000400060008000100001200020142015201620172018201920202021202220232024TWhCoalRenewablesGasNuclearOilElectricityMarketReportUpdateSupplyOutlookfor2023and2024PAGE22IEA.CCBY4.0.Renewablesaloneareexpectedtomeetallelectricitydemandgrowthin2023and2024Despitereducedhydropowergenerationduetodroughtsinmanyregions,globalrenewablegenerationgrewin2022by7.8%,itshighestgrowthrateoverthelast30years.Weexpectgrowthofslightlylessthan7%in2023,ashydropowerisreducedinsomeregionsbyrecurringdroughts.Renewableelectricitygenerationshouldthengrowby11%in2024,drivenbycontinuedwindandsolarcapacityexpansionsandassumedhydropowerrecoveryinvariousregions.By2024,theshareofrenewablesinglobalelectricitygenerationisexpectedtoexceedone-thirdforthefirsttimeinhistory.Withdemandgrowtheasingin2023,theincrementalgrowthinrenewablegenerationaloneisexpectedtocoveralltheadditionaldemandincrease,andwilldothesamein2024evenasdemandgrowthisexpectedtoaccelerateagain.Year-on-yearglobalchangeinelectricitygenerationbysource,2019-2024IEA.CCBY4.0.Note:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2023and2024areforecastvalues.-1000-5000500100015002000201920202021202220232024TWhCoalGasNuclearOthernon-renewablesRenewablesNetchangeElectricityMarketReportUpdateSupplyOutlookfor2023and2024PAGE23IEA.CCBY4.0.Declinesinfossil-firedelectricitygenerationarebecomingstructuralIn2024,electricitygenerationfromfossilfuelswillhavedeclinedforthefourthtimeinsixyears.Aftersubdued1%growthin2022,fossil-firedgenerationissettofallslightlyby0.6%in2023andby1.2%in2024.Declinesinfossilelectricitygenerationwererareinthepast,comingprimarilywhenoverallelectricitydemandwasdepressedbymajorglobalenergyandfinancialcrises,suchasintheaftermathoftheoilcrisesof1970sorduringtheGreatRecessionin2009.Butinrecentyearsfossil-firedgenerationhaslaggedorfallenevenwhenoverallelectricitydemandexpanded.Evolutionofglobalelectricitygenerationfromfossilfuels,1972-2024IEA.CCBY4.0.Note:Thefiguresfor2023and2024areforecastvalues.In2019,generationfromfossilfuelsdecreasedasmildweatherbothrestraineddemandgrowthandwasfavourableforrenewablegeneration.The2020declineinfossil-firedgenerationwasdrivenbyanexceptionaleconomicslowdownbecauseoftheglobalpandemic,whileastrong6%reboundin2021wasshort-lived.Therewasonlymodestgrowthinelectricitysupplyfromfossilfuelsin2022,despitedemandgrowingby2.3%.Similarly,expecteddeclinesinfossil-firedoutputin2023and2024willoccurduringpredictedsignificantdemandgrowth,whilerenewablegenerationcontinuestoincreasestrongly.Whiledroughts,globaleconomiceventsorgovernmentpoliciescancauseisolatedreboundsinfossil-firedelectricity,recentdemandandgenerationtrendssuggestthatdeclinesarebecomingstructural.Hence,theworldisacceleratingtowardatippingpointwhereglobalfossil-firedgenerationbeginstofallasitisincreasinglyreplacedbysupplyfromcleanenergysources.-1600-1200-800-400040080012001600-20000-15000-10000-500005000100001500020000TWhTWhFossil-firedgeneration(leftaxis)Year-on-yearchange(rightaxis)ElectricityMarketReportUpdateSupplyOutlookfor2023and2024PAGE24IEA.CCBY4.0.Coal-firedgenerationincreasesinChinaandIndia,whileitshrinksintheUSandtheEUAsin2022,Chinaagainsuffereddroughtsin2023.Thesubstantial23%declineinhydropoweroutputinthefirsthalfof2023meantmorecoal-firedgenerationwasneededtofillthegap,whichisestimatedtohaveincreasedbyalmost8%inH12023amidsignificantgrowthindemand.Thesharpyear-on-yearincreasewasalsodrivenbyacomparisoneffectwiththesameperiodin2022whendemandgrowthandcoal-firedgenerationslumpedduringstrictCovidmeasures.Windgenerationgrewbyabout20%inH1,supportedbygrowthininstalledcapacitiesandfavourableweather.Weexpectcoal-firedoutputtoincreaseby4.5%forthefullyear,andthentostayroughlyflatin2024,asstronggrowthinrenewablesandnuclearputsdownwardspressureoncoal.Gas-firedsupplyisexpectedtoincreaseabout3%in2023andtodeclineby4%in2024.Indiarecordeda3.8%increaseincoal-firedgenerationinH12023,boostedbystrongdemandgrowthamidreducedhydropoweroutput(-8%).Withheatwavesexpectedtocausesurgesinpeakdemandduetoincreasedcooling,thegovernmentorderedcoalplantstorunatfullcapacityfrom16Marchto30September2023toincreasesecurityofsupply.Thisorderisexpectedtoespeciallyaffectcoalplantsthatuseimportedcoalandwerenotoperatingatfullcapacity.SolargenerationalsoincreasedstronglyinH12023by26%comparedtopreviousyear.Weforecastcoal-firedgenerationinIndiaforthefullyeartoincreaseby4.2%,andtocontinueitsincreasein2024,albeitataslowerpaceof2.5%,asrenewablesandnuclearareexpectedtoexpandsignificantlytomeetahighershareofthegrowingelectricitydemand.Year-on-yearchangeinelectricitygenerationbysourceinselectedregions,2019-2024IEA.CCBY4.0.Note:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2023and2024areforecastvalues.-3000300600900201920202021202220232024201920202021202220232024201920202021202220232024201920202021202220232024ChinaIndiaUnitedStatesEuropeanUnionTWhCoalGasNuclearOthernon-renewablesRenewablesNetchangeElectricityMarketReportUpdateSupplyOutlookfor2023and2024PAGE25IEA.CCBY4.0.TheUnitedStatessawsignificantgrowthinsolarpowergenerationof10%inthefirsthalfof2023comparedtothesameperiodin2022.Incontrast,generationfromwindunderperformed,recordinga1%year-on-yeardecline.Coal-firedplantscontinuedtoclose,withcoal-firedgenerationfallingbyalmost30%inH12023comparedtoH12022.Atotalofmorethan10GWofcoal-firedcapacityisplannedtoberetiredthisyear.Gas-firedgenerationgrewby8%,supportedbythefallingaspricesandbecausegasincreasinglyhadtomeetresidualdemandamiddecliningcoalgeneration.Weexpectthistrendtocontinueforthefullyear,withcoalending2023withadeclineof24%andgaswithanincreaseof6%.Thedeclineincoal-firedsupplyisexpectedtobesignificantlynarrowerin2024at3%,andgasisexpectedtodeclineslightlybyabout1%.Inthefirsthalfof2023theEuropeanUnionsawhydropowergenerationreboundby10%,asdroughtconditionseased.Theincreaseinwindgenerationwaslimitedtoabout5%duetounfavourableweather,whilesolarsawbiggainswith14%growth.TheshareofrenewablesintotalgenerationinH12023rosetoarecord43%,theprevioushighbeing39%duringtheexceptionalpandemicyearof2020.Thisrecordwasalsodrivenbyelectricitydemanddecliningbyalmost6%inthesameperiod,withastrongyear-on-yeardropof22%incoal-firedgenerationinH1andan18%declineingas-firedgeneration.Weexpectthesetrendstocontinue,andassumingnormalweatherconditionsforthewinterandafullyeardemanddeclineof3%,weforecastforthefullyear2023analmost16%declineforgasanda20%declineforcoal.AsrenewablescontinuetoincreaseandtheFrenchnuclearfleetcontinuestorecover,gas(-11%)andcoal(-19%)areexpectedtofurtherdeclinein2024.Arelowerhydropowercapacityfactorsthenewnormalinsomeregions?Thecapacityfactorofglobalhydropowerhasbeenonadecliningtrendoverthelastdecade,fallingfromanaverageof38%in1990-2016toabout36%intherecentyears2020-2022.Thistwo-percentage-pointdifferencemeansthat,globally,today’shydropowerinstalledbaseisproducingabout240TWhlesselectricityannuallythanwhatitwouldhaveproducedhadcapacityfactorsstayedwheretheywereadecadeago.Asaresult,anamountofenergyaslargeasSpain’sannualelectricityconsumptionneedstobeproducedbyotherdispatchablesourcesofpower,whichiscurrentlysuppliedmainlybyfossil-firedgeneration.Hydropoweristypicallyconsideredadispatchablesourceofelectricitygeneration;however,itsoutputisdependentonhydrologicalconditions,primarilyprecipitation.Hydropowergenerationisthereforesubstantiallyaffectedinthecaseofdroughts.Inriverbasinsthatdependonsnowmelts,temperaturepatternsalsocomeintoplay.ElectricityMarketReportUpdateSupplyOutlookfor2023and2024PAGE26IEA.CCBY4.0.AveragecapacityfactorsinBrazil,Canada,andtheEuropeanUnionhavedeclinedoverthelasttwodecadesThemoststrikingfallhasbeeninBrazil,wherehydrocapacityfactorsrecordedastaggeringdropfromanaverageof56%in1990-2012toanaverageof44%in2013-2022.Severedroughtsin2014-2017and2019-2021,especiallyinstateslikeSaoPaulo,RiodeJaneiro,andMinasGerais,causedwatershortages,cropproductiondeclines,andpowercuts.Duringdroughts,priorityaccesstowaterisgiventohumanandanimalconsumption,followedbyirrigation,andonlythenhydropower.Theoutlookforhydropowergenerationin2023ismuchimproved.Hydroelectricreservoirlevelsreacheda12-yearhighbyMay2023duetoheavyrainfallandaveragecapacityfactorsareexpectedtoreboundsignificantlyfor2023.Nevertheless,insufficientreservoirsareresultinginthereleaseofsurpluswaterandcurtailmentofpotentialhydropowergenerationasreservoirsmaintainawaitingvolumetoreducetheriskoffloodinginthecaseofheavyrain.Evolutionofannualhydropowercapacityfactorsinselectedregions,1991-2023IEA.CCBY4.0.Note:2023valuesarebasedonthelatestIEARenewableEnergyMarketUpdateprojections.Canadahasalsoseenreducedhydropowercapacityfactors,droppingfromanaverageof58%between1990and2015to54%from2016to2022.WesternCanada,includingBritishColumbiaandAlberta,hasfacedrecurrentdroughts.In2015,southernBritishColumbiaexperiencedthehighestdroughtrating,andAlbertadeclaredanAgriculturalDisasterAreawithstrictwaterrestrictions.Droughtsin2017and2020-2021inthesouthandwestofCanadafurtherimpactedagriculture,ecosystems,andwaterresources.Moreover,regionaldifferencesinprecipitationandhydropowergenerationcanbeobservedacrossAlberta,BritishColumbia,OntarioandQuebec.33%34%35%36%37%38%39%40%199119951999200320072011201520192023AveragecapacityfactorAveragecapacityfactorPolynomialtrendline30%35%40%45%50%55%60%65%199119951999200320072011201520192023Brazil48%50%53%55%58%60%63%65%199119951999200320072011201520192023Canada20%22%24%26%28%30%32%34%199119951999200320072011201520192023EUWorldElectricityMarketReportUpdateSupplyOutlookfor2023and2024PAGE27IEA.CCBY4.0.TheEuropeanUnionalsowitnessedadownwardtrendinhydropowercapacityfactors,decliningfromanaverageof28%between1990and2014to25%from2015to2022.SeveredroughtshitSouthernEuropein2017,andCentralandEasternEuropein2018.Thedroughtin2022,reportedastheworstinEuropein500years,affectedalargenumberofcountriesacrossEurope,hurtingagriculturalproduction,hydropowergeneration,andevenputtingpressureonnuclearpowercoolingsystemsduetoinsufficientwateravailability.EUhydropowergenerationwasdownbyalmost19%in2022comparedto2021–ahistoricdeclineinthelast30years.UpwardtrendinChinaisconstrainedbydroughtsthreeyearsinarowAlthoughaveragecapacityfactorsinregionslikeBrazil,CanadaandtheEUhavebeenonadownwardtrendinrecentyears,thedeclineintheworldaveragehasbeensomewhatlimited,primarilyduetoadditionsofnewerandmoreefficientplantsincountriessuchasChina.Asof2022,30%ofworld’shydropowergenerationtookplaceinChina.ThismassivescalemeansthatanychangesinChinesehydroregimeshavealargeimpactonglobalstatistics.ThecapacityfactorinChinarosefromanaverageof37%over1990-2008toanaverageof39%in2009-2022,resultingfromthebuildingoflarge,moreefficienthydropowerplantssuchastheThreeGorgesDam.Therewasasignificantfallin2021and2022duetomajordroughts,andthecurrentdroughtin2023preventsasignificantuptick.Evolutionofhydropowergeneration(left)andannualcapacityfactorofhydropower(right)inChina,1991-2023IEA.CCBY4.0.Note:2023valuesarebasedonthelatestIEARenewableEnergyMarketUpdateprojections.01000200030004000500019911993199519971999200120032005200720092011201320152017201920212023TWhChinaRestofworld20%25%30%35%40%45%199119951999200320072011201520192023CapacityfactorAveragecapacityfactorPolynomialtrendlineElectricityMarketReportUpdateSupplyOutlookfor2023and2024PAGE28IEA.CCBY4.0.Location,increasingVREshare,andwaterpriorityrulesalsoplayaroleinhydropoweroutputAsidefromdroughts,hydropowerutilisationisaffectedbymultipleothercomplexdrivers.Oneofthepotentialfactorsisthat,generally,thebestlocationsarealreadyexploited,leavingadditionalcapacitiestobebuiltatsiteswithcomparativelylesspotential.Inaddition,therearesignificantdisparitiesintheagesofthehydropowerplantsindifferentregions.AshighlightedintheIEAHydropowerSpecialMarketReport,NorthAmericahastheoldesthydropowerfleets(50yearsonaverage),whereasChinahastheyoungest(15years).Agedifferencesinpowerplantscanalsoinfluencetheaveragecapacityfactors,witholderplantslikelytohavelowercapacityfactorscomparedtonewerplantsofthesametypeandcharacteristics.Theneedtobalancegrowingsharesofvariablerenewableenergy(VRE)inmanycountriesisalsolikelytoimpacthowhydropowerplantsareoperated.Hydropowercapacities–especiallyhydroreservoirplants–maybeoperatingmoreflexiblythaninthepast,resultinginreducedcapacityfactors.Anotheraspectisthatsomeregionsmayprioritiseotherobjectivessuchasfloodcontrol,irrigation,recreation,ornavigation.AsshownintheIEAHydropowerSpecialMarketReportaswellasbytheClimateImpactsonLatinAmericanHydropowerReport,projectedimpactsofclimatechangeonhydropowergenerationvarybycountryandbyplanttype.Anticipatingtheclimatechange-relatedchallengesonhydropower,andplanningaccordingly,willbecrucialforefficientandsustainableuseofhydroresources.ElectricityMarketReportUpdateEmissionsOutlookfor2023and2024PAGE29IEA.CCBY4.0.Emissions:Emissionsfrompowergenerationpoisedtodipslightlythrough2024Afterreboundingstronglyin2021whentheygrewby7%,globalemissionsfromelectricitygenerationincreasedbyjust1.3%in2022.Andaselectricitygenerationfromfossilfuelsshrinks,weexpectemissionstorecordslightdeclinesaround1%bothin2023andin2024.Fallingcoal-firedgenerationisthemaindriverofthisdecline,withadropintotalCO2emissionsofabout140Mtovertheperiodoutto2024.Oilfollowswithadecreaseof100Mt.Totalchangeinemissionsfromgas-firedgenerationoutto2024isexpectedtobeclosetozero,asslightincreasesin2023areexpectedtobeoffsetbydeclinesin2024.IncreasesinemissionsinAsiaareoffsetbydeclinesinotherregionsOutto2024,themajorincreasesinpowergenerationemissionswillmostlybeinChinaandIndiaduetotheirgrowingcoaluse.However,theseincreasesaremorethanoffsetbyprojecteddeclinesinotherregions.TheEuropeanUnionalonemakesup40%ofthetotaldeclineexpectedoutsideChinaandIndia,asgenerationfromfossilfuelsissettofallsubstantially.TheUnitedStatesfollowsduetocontinuedstrongcoal-to-gasswitchingalongwithgrowthinrenewables.Otherregionssimilarlyseereductionsinemissionsasmoderatinggaspricessupportcoal-to-gasswitching,andasrenewableskeepexpanding.Whileextremeweather,strongeconomicshocksandgovernmentpoliciescancauseupticksinindividualyears,theoveralltrendofglobalpowersectoremissionsplateauingisexpectedtoremainstable,withindividualyearsrecordingdeclinesinemissionsfrompowergenerationbecomingmorefrequent.ElectricityMarketReportUpdateEmissionsOutlookfor2023and2024PAGE30IEA.CCBY4.0.ChangesinglobalCO2emissionsfromelectricitygeneration,2024vs.2022IEA.CCBY4.0.EmissionintensityofpowergenerationissettofallatafasterpaceWhereasglobalCO2emissionsfrompowergenerationareexpectedtoplateauandslightlydeclineoutto2024,itsemissionintensityissettofallatafasterpace.Weexpecta3%declinein2023,followedbya4%dropin2024,whichwouldbethelargestdeclineinemissionsintensityovertheperiod2014-2024.In2022,theEuropeanUnionwastheonlymajorregionthatsawayear-on-yearincrease(+7%)duetoincreasedcoal-firedgeneration.Butwiththeexpectedstrongdropinfossilelectricitygenerationinthenexttwoyears,theEUissettohavethefastestrateofdecline(averaging17%)inemissionintensityamonglarge-scaleenergyconsumingregions.-216-67-191-24-34-21+76+23412200124001260012800130001320013400MtCO2Changes2024vs.2022Annualtotalemissions1336213120ElectricityMarketReportUpdateEmissionsOutlookfor2023and2024PAGE31IEA.CCBY4.0.CO2intensityofelectricitygenerationinselectedregions,2014-2024IEA.CCBY4.0.Note:TheCO2intensityiscalculatedastotalCO2emissionsdividedbytotalgeneration.010020030040050060070080090020142015201620172018201920202021202220232024gCO2/kWhWorldEuropeanUnionUSAChinaIndiaElectricityMarketReportUpdatePricesOutlookfor2023and2024PAGE32IEA.CCBY4.0.Prices:WholesaleelectricitypricesremainelevatedinmanyregionsAstightmarketconditionseased,pricesofenergycommoditiessuchasgasandcoalfellfromrecordhighsinthethirdquarterof2022.Thisfedintoadeclineinwholesaleelectricitypricesthatstartedinthefourthquarterof2022andcontinuedwellinto2023.Nevertheless,electricitypricesremainelevatedcomparedtotheirpre-2021levelsinmanypartsoftheworld,althoughthereareregionaldifferences.HighpricesinEuropecontrastwithlowerpricesintheUnitedStatesQuarterlyaveragewholesalepricesforselectedregions,2019-2024IEA.Allrightsreserved.Note:ThepricesforAustraliaandtheUnitedStatesarecalculatedasthedemand-weightedaverageoftheavailablepricesoftheirregionalmarkets.Continuouslinesshowhistoricaldataanddashedlinesrefertoforwardprices.Source:IEAanalysisusingdatafromRTE(France)–accessedviatheENTSO-ETransparencyPlatform;Bundesnetzagentur(2023),SMARD.de;AEMO(2023),Aggregatedpriceanddemanddata;EIA(2023),Short-TermEnergyOutlookJanuary2023;IEX(2023),AreaPrices;EEX(2023),PowerFutures;ASX(2023),ElectricityFutures©ASXLimitedABN98008624691(ASX)2020.Allrightsreserved.ThismaterialisreproducedwiththepermissionofASX.Thismaterialshouldnotbereproduced,storedinaretrievalsystemortransmittedinanyformwhetherinwholeorinpartwithoutthepriorwrittenpermissionofASX.Latestupdate:14July2023.InmanyEuropeancountries,includingFranceandGermany,wholesaleelectricitypricescontinuedtodeclineinQ12023fromtheirpeakinQ32022.WhileEuropeanpricesinH12023havefallenbackclosetotheir2021averageofaround075150225300375450Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4201920202021202220232024USD/MWhGermanyFranceUnitedStatesJapanAustraliaIndiaElectricityMarketReportUpdatePricesOutlookfor2023and2024PAGE33IEA.CCBY4.0.100EUR/MWh,theyareonaveragestillmorethandoublethe2019levelofabout40EUR/MWh.ElectricityfuturesshowadecliningpricetrendintoQ32023withtheonsetofthesummerseason,butanincreasetowardstheendoftheyear,reachingapeakinQ12024.Thisisdrivenbytheexpectationofwinterconditionsleadingtoacomparativetighteningofthegasmarket–whichcanpushtheelectricitypricesup,asgasisgenerallythemarginalsourceofelectricitygenerationinEuropethatsetsthemarketprice.Franceisaspecificcase,withuncertaintyovertheextentoftherecoveryofitsnucleargenerationpushingFrenchwinterpricesmuchhigherthanthoseofitsneighbours.IntheUnitedStates,recordhightemperaturesinearlysummer2023inTexascausedsurgingelectricitydemanddrivenbycooling,whichcombinedwithhigher-than-normallevelsofforcedgenerationoutages,resultedinpricespikesintheERCOTreal-timemarketreachinguptoUSD5000/MWh.Nevertheless,theaveragepriceintheUnitedStatesinH12023issignificantlylowerthanin2022amidlowerpricesforenergycommodities,andisonly10%higherthanthe2019average.Overtheoutlookperiod,forwardpricesfor2023and2024indicatearelativelystablepricelevel,withcomparativelyhighersummerprices(Q3)thataremainlydrivenbyexpectationsoftightersupplyinthesummerinmanyUSregions.JapanesewholesalepricesalsodeclinedinQ12023withforwardpricesindicatingaasimilardownwardtrendintoQ22023.However,potentialpricespikescannotberuledoutoverthesummer,asthegovernmenthascalledonhouseholdsandindustriesaroundTokyotosaveelectricityduringthesummermonthsinordertoavoidatightsupplysituationinthecaseofheatwaves.AfterincreasinguntilQ12024,futurespricesshowadeclineinQ22024,drivenlargelybytheexpectedrestartoftheOnagawa-2andtheShimane-2reactors.WholesaleelectricitypricesinAustraliahaveeasedfromtheirhighsinQ2andQ32022,followingdecliningpricesforenergycommodities.AverageAustralianpricesinH12022wereabout20%higherthantheir2019levels.FuturespricesindicatearelativelystablepricelevelwithtroughsinQ4ofboth2023and2024.InIndia,theeasingofgasandcoalpricesresultedinayear-on-yeardeclineof14%inwholesaleelectricitypricesduringthefirsthalfof2023.Pricesremainnevertheless80%higherthan2019’saverage,alsosupportedbysurgingelectricitydemanddrivenbyeconomicgrowthandbyadditionalcoolingneeds.PricesunderscoreincreasedneedforflexibilityEuropeanpowermarketsinthesummerof2023havebeencharacterisedbywholesalepricesattimesdroppingtonegativelevels.ThenumberofhourswithElectricityMarketReportUpdatePricesOutlookfor2023and2024PAGE34IEA.CCBY4.0.wholesaleelectricitypricesbelowzerodoubledyear-on-yearincountriessuchasGermanyandNetherlandsinthefirsthalfof2023.ThisbecameprominentinlateMayandcontinuedwellintoJuly,duetoconsecutivedaylighthourswithveryhighsolargenerationamidreducedelectricitydemand.Inordertoavoidtriggeringrepeatauctionsandtoincreasethestabilityofmarketcoupling,marketoperatorsagreedtolowerthenegativepricethresholdontheday-aheadmarket,from16Juneonward,toEUR-500/MWhfromthepreviousthresholdofEUR-150/MWh.Pricesbelowzerooccurwhenthereisover-generationcomparedtodemand,signallingthateithergenerationneedstodecreaseordemandneedstoincrease.Renewablesthatproduceaccordingtosubsidyschemesandnotmarketpricesignalscontributetothisimbalance.Limitedopportunitiesforelectricityexportsduetoinsufficientinterconnectioncapacitymayalsointensifythesituation.Inaddition,largerandlessflexiblepowerplants(e.g.,coalandnuclear)withhighstart-upandrampingcostsbidnegativeprices,ensuringthattheycancontinuetogenerateelectricityratherthanshut-offduringperiodsofexcessrenewablegeneration.Negativepricesthereforeimplyinsufficientflexibilityinthesystem,withgenerationthatisnotflexibleenough,ademandsidenotsufficientlyprice-responsiveorthereisnotenoughstoragetoconductenergyarbitrage.Atthesametime,negativepricescanalsoprovidepricesignalstoinvestinsolutionsandtechnologiestoimprovesystemflexibility.NegativepriceshavebecomemorecommoninpastyearsinmanyelectricitymarketsintheworldOverthepastfewyears,wholesaleelectricitypricesbelowzerohavebecomemorecommoninregionsthathaveseensignificantincreasesintheshareofVREintotalgeneration.California,withaVREsharerangingfrom30%to40%during2019-2022,sawnegativepricesinindividualhoursabout1%ofthetime.SouthAustraliahasseenastronggrowthintheshareofVREinrecentyearsandasaresultpricesonthewholesaleelectricitymarketwerebelowzeroalmost20%ofthetimein2022.TheJapanElectricPowerExchangedoesnothaveamechanismfornegativeprices,buttherehasbeenasignificantincreaseinthenumberofhourswitheffectivelyazerowholesaleelectricityprice,drivenbythegrowthinsolargeneration.Germanyhadanincreasingtrendofnegativepricesbetween2017-2020.Followingthepeakinthenumberofnegativehoursin2020duetoweakdemand,therewasadropin2021,withsubsequentyearsremainingbelowthelevelof2020.Thehaltingofthisupwardtrendisattributedtoanincreasedflexibilityofplantsinthepowersystemaswellasatighteningofsupply.ElectricityMarketReportUpdatePricesOutlookfor2023and2024PAGE35IEA.CCBY4.0.Numberofhourswithnegativewholesaleelectricitypricesandshareofvariablerenewableenergyintotalelectricitygenerationinselectedregionsinthefirsthalfoftheyear,2019-2023IEA.Allrightsreserved.Note:Japandoesnotallownegativepricesinthewholesaleelectricitymarket,thelowestpossiblepriceislimitedtozero.ThenumberofhoursshownhereforJapanthereforerepresentsthehourswhenpriceswerezero.TheCaliforniapricesrefertowholesalepricesfromtheelectricityhubSP-15.Source:IEAanalysisbasedondatafromERCOT,CAISO,AEMONEM,andENTSO-ETransparencyPlatform.Demand-sideflexibilityandstoragecanbenefitfromupdatedregulatoryandmarketframeworksAspowersystemsarenormallysizedtomeettheirpeakloads,gridfeesforconsumershavetraditionallybeendesignedtoincentiviseflatloadprofilesanddiscouragegreaterloadswings.Forexample,thegridfeestructureinvariouscountriesinEuropefavoursbase-loadconsumptionwithhighfull-loadhours,whichinturncandisincentiviseflexibleoperation.Forthisreason,someindustriesmayprefernottodeviatefromtheirbaseloadtoavoidhighergridfeesevenduringnegativeprices,despitepricesbelowzeromeaningthattheywouldgetpaidtoconsumemoreenergy.Therefore,itbecomesimportanttoupdateregulatoryschemestoencourageflexibleloadoperations.Increaseddigitalisationandaggregatingdemandflexibilityviavirtualpowerplantsareothermeanstomakedemandmoreprice-responsive.Time-of-usetariffsandsmartchargingofelectricvehiclesaresimilarlyimportantfactorsthatwouldcontributetoincreaseddemand-sideflexibility.0%10%20%30%40%50%60%70%80%90%100%010020030040050060070080090010002019H12020H12021H12022H12023H12019H12020H12021H12022H12023H12019H12020H12021H12022H12023H12019H12020H12021H12022H12023H12019H12020H12021H12022H12023H1NetherlandsGermanyCaliforniaJapanSouthAustraliaNumberofhourswithnegativepricesNumberofhourswithnegativeprices(leftaxis)ShareofVREintotalgeneration(rightaxis)ElectricityMarketReportUpdatePricesOutlookfor2023and2024PAGE36IEA.CCBY4.0.Thedesignofgridfeesforstoragesisanaspectthatcanhampertheirdeployment.AcrosstheEuropeanUnion,forexample,significantvariationsexistintariffstructuresbetweendifferentstoragetechnologiesaswellastheirpositioninthepowersystem(i.e.,behindthemetervs.frontofthemeter).Updatingregulatoryframeworkstoincorporatereflectivetariffstructureswouldensurefaircompetitionbetweendifferentflexibilityoptions.Eliminatingnon-cost-reflectivedoublegridtarifffeesforstorageswouldalsohelpimprovethebusinesscaseforstorages.ThebusinesscaseforenergyarbitrageisbecomingmoreattractiveAveragedailystandarddeviationandshareofvariablerenewableenergyintotalelectricitygenerationinselectedregions,2019-2023H1IEA.Allrightsreserved.Note:TheCaliforniapricesrefertowholesalepricesfromtheelectricityhubSP-15.Source:IEAanalysisbasedondatafromERCOT,CAISO,AEMONEM,andENTSO-ETransparencyPlatform.Arbitragingpricedifferencesusingstoragesystemsisbecomingmoreattractiveasnegativeprices,spreadsandvolatilityincreases.Forexample,inAustralia,large-scalebatteryenergystoragesawrecordhighrevenuein2022.Theaveragedailystandarddeviationofpricesrepresentsthedailyvolatilityandcanbeusedasagoodproxytocompareenergyarbitragepotential,especiallyforstoragesystemswithshortercharginganddischargingcyclessuchasbatterysystems.Forexample,averagedailystandarddeviationonthehourlyday-aheadmarket0%10%20%30%40%50%60%70%80%015304560759010512020192020202120222023H120192020202120222023H120192020202120222023H120192020202120222023H120192020202120222023H1NetherlandsGermanyCaliforniaJapanSouthAustraliaUSD/MWhAveragedailystandarddeviation(leftaxis)ShareofVREintotalgeneration(rightaxis)ElectricityMarketReportUpdatePricesOutlookfor2023and2024PAGE37IEA.CCBY4.0.increasedintheNetherlandsfromaboutEUR9/MWhin2017toamassiveEUR61/MWhin2022,thenfallingtoEUR32/MWhinH12023.Thelargeincreaseafter2020isduetosoaringgasprices,asgasisoftenthemarginalgenerationsourcethatsetselectricityprices.Thegrowingshareofrenewableswasacontributortothenumberofhourswithlowerprices.Duetotheirfastresponsecharacteristics,thesharesofbatteriesintheancillarymarkets,especiallyinprimaryfrequencycontrolprovision,hasbeenincreasinginmanypowermarketsoftheworld.Asmorebatteriesprovidetheseservices,frequencycontrolmarketswouldstarttogetsaturated,limitingthepotentialprofitabilityforadditionalbatteriesinthismarketsegment.Withincreasingvolatilityonthespotmarkets,energyarbitragecanthereforeprovideanimprovedbusinesscasewhenstackedwithotherrevenuesourcessuchasancillaryservicesprovision.Intradaymarkets,withtheirsignificantlyhighervolatilityandprofitpotential,areexpectedtobecomeincreasinglyimportantforstoragesystems.ElectricityMarketReportUpdateGeneralannexOutlookfor2023and2024PAGE38IEA.CCBY4.0.GeneralannexSummarytablesRegionalbreakdownofelectricitydemand,2021-2024TWh2021202220232024Growthrate2021-2022Growthrate2022-2023Growthrate2023-2024Africa7517617668021.3%0.8%4.7%Americas61726330628663992.6%-0.7%1.8%ofwhichUnitedStates41704278420642902.6%-1.7%2.0%AsiaPacific131821371714307149674.1%4.3%4.6%ofwhichChina83078613907095353.7%5.3%5.1%Eurasia12961315132913411.4%1.1%0.9%Europe3814367135773637-3.7%-2.6%1.7%ofwhichEuropeanUnion2736264925702612-3.2%-3.0%1.7%MiddleEast11681199122212512.6%1.9%2.4%World263822699127491283972.3%1.9%3.3%Notes:Datafor2022arepreliminary;2023-2024areforecasts.Differencesintotalsareduetorounding.ElectricityMarketReportUpdateGeneralannexOutlookfor2023and2024PAGE39IEA.CCBY4.0.Breakdownofglobalelectricitysupply,2021-2024TWh2021202220232024Growthrate2021-2022Growthrate2022-2023Growthrate2023-2024Nuclear2805265927092842-5.2%1.9%4.9%Coal102791045010409103091.7%-0.4%-1.0%Gas6531652265406477-0.1%0.3%-1.0%Othernon-renewables114112113113-1.9%0.6%0.4%Totalrenewables793185469132101607.8%6.9%11.3%Notes:Datafor2022arepreliminary;2023-2024areforecasts.Differencesintotalsareduetorounding.Unlessotherwisespecified,generationnumbersrefertogrossgeneration.GlobalCO2emissionsfrompowergeneration,2021-2024MtCO22021202220232024Growthrate2021-2022Growthrate2022-2023Growthrate2023-2024Totalemissions131861336213270131201.3%-0.7%-1.1%ElectricityMarketReportUpdateGeneralannexOutlookfor2023and2024PAGE40IEA.CCBY4.0.RegionalandcountrygroupingsAfrica–Algeria,Angola,Benin,Botswana,Cameroon,Congo,DemocraticRepublicoftheCongo,Côted’Ivoire,Egypt,EquatorialGuinea,Eritrea,Ethiopia,Gabon,Ghana,Kenya,Libya,Mauritius,Morocco,Mozambique,Namibia,Niger,Nigeria,Senegal,SouthAfrica,SouthSudan,Sudan,UnitedRepublicofTanzania,Togo,Tunisia,Zambia,ZimbabweandotherAfricancountriesandterritories.1Asia–Bangladesh,BruneiDarussalam,Cambodia,ChineseTaipei,India,Indonesia,Japan,Korea,DemocraticPeople’sRepublicofKorea,LaoPeople’sDemocraticRepublic,Malaysia,Mongolia,Myanmar,Nepal,Pakistan,People’sRepublicofChina,2Philippines,Singapore,SriLanka,Thailand,VietNamandotherAsiancountries,territoriesandeconomies.3AsiaPacific–Australia,Bangladesh,BruneiDarussalam,Cambodia,ChineseTaipei,India,Indonesia,Japan,Korea,DemocraticPeople’sRepublicofKorea,LaoPeople’sDemocraticRepublic,Malaysia,Mongolia,Myanmar,Nepal,NewZealand,Pakistan,People’sRepublicofChina,2Philippines,Singapore,SriLanka,Thailand,VietNamandotherAsiancountries,territoriesandeconomies.4CentralandSouthAmerica–Argentina,Bolivia,Brazil,Chile,Colombia,CostaRica,Cuba,Curaçao,DominicanRepublic,Ecuador,ElSalvador,Guatemala,Haiti,Honduras,Jamaica,Nicaragua,Panama,Paraguay,Peru,Suriname,TrinidadandTobago,Uruguay,VenezuelaandotherLatinAmericancountriesandterritories.5Eurasia–Armenia,Azerbaijan,Georgia,Kazakhstan,Kyrgyzstan,RussianFederation,Tajikistan,TurkmenistanandUzbekistan.Europe–Albania,Austria,Belgium,Belarus,BosniaandHerzegovina,Bulgaria,Croatia,Cyprus,6,7CzechRepublic,Denmark,Estonia,Finland,France,Germany,Gibraltar,Greece,Hungary,Iceland,Ireland,Italy,Kosovo8Latvia,Lithuania,Luxembourg,Malta,Montenegro,Netherlands,NorthMacedonia,Norway,Poland,Portugal,RepublicofMoldova,Romania,Serbia,SlovakRepublic,Slovenia,Spain,Sweden,Switzerland,RepublicofTürkiye,UkraineandUnitedKingdom.EuropeanUnion–Austria,Belgium,Bulgaria,Croatia,Cyprus,6,7CzechRepublic,Denmark,Estonia,Finland,France,Germany,Greece,Hungary,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,Netherlands,Poland,Portugal,Romania,SlovakRepublic,Slovenia,SpainandSweden.ElectricityMarketReportUpdateGeneralannexOutlookfor2023and2024PAGE41IEA.CCBY4.0.MiddleEast–Bahrain,IslamicRepublicofIran,Iraq,Israel9,Jordan,Kuwait,Lebanon,Oman,Qatar,SaudiArabia,SyrianArabRepublic,UnitedArabEmiratesandYemen.Nordics–Denmark,Finland,Norway,SwedenNorthAfrica–Algeria,Egypt,Libya,MoroccoandTunisia.NorthAmerica–Canada,MexicoandUnitedStates.SoutheastAsia–BruneiDarussalam,Cambodia,Indonesia,Lao,People’sDemocraticRepublic,Malaysia,Myanmar,Philippines,Singapore,ThailandandVietNam.ThesecountriesareallmembersoftheAssociationofSoutheastAsianNations(ASEAN).Advancedeconomies–OECDmembernations,plusBulgaria,Croatia,Cyprus,MaltaandRomania.Emergingmarketsanddevelopingeconomies–Allothercountriesnotincludedintheadvancedeconomiesregionalgrouping.1Individualdataarenotavailableandareestimatedinaggregatefor:BurkinaFaso,Burundi,CapeVerde,CentralAfricanRepublic,Chad,Comoros,Djibouti,Gambia,Guinea,Guinea-Bissau,Lesotho,Liberia,Madagascar,Malawi,Mali,Mauritania,Reunion,Rwanda,SaoTomeandPrincipe,Seychelles,SierraLeone,Somalia,EswatiniandUganda.2IncludingHongKong.3Individualdataarenotavailableandareestimatedinaggregatefor:Afghanistan,Bhutan,Macau(China),MaldivesandTimor-Leste.4Individualdataarenotavailableandareestimatedinaggregatefor:Afghanistan,Bhutan,CookIslands,Fiji,FrenchPolynesia,Kiribati,Macau(China),Maldives,NewCaledonia,Palau,PapuaNewGuinea,Samoa,SolomonIslands,Timor-Leste,TongaandVanuatu.5Individualdataarenotavailableandareestimatedinaggregatefor:Anguilla,AntiguaandBarbuda,Aruba,Bahamas,Barbados,Belize,Bermuda,BritishVirginIslands,CaymanIslands,Dominica,FalklandIslands(Malvinas),Grenada,Guyana,Montserrat,Saba,SaintEustatius,SaintKittsandNevis,SaintLucia,SaintPierreandMiquelon,SaintVincentandtheGrenadines,SintMaarten,andtheTurksandCaicosIslands.6NotebyTürkiye:Theinformationinthisdocumentwithreferenceto“Cyprus”relatestothesouthernpartoftheIsland.ThereisnosingleauthorityrepresentingbothTurkishandGreekCypriotpeopleontheIsland.TürkiyerecognisestheTurkishRepublicofNorthernCyprus(TRNC).UntilalastingandequitablesolutionisfoundwithinthecontextofUnitedNations,Türkiyeshallpreserveitspositionconcerningthe“Cyprusissue”.7NotebyalltheEuropeanUnionMemberStatesoftheOECDandtheEuropeanUnion:TheRepublicofCyprusisrecognisedbyallmembersoftheUnitedNationswiththeexceptionofTürkiye.TheinformationinthisdocumentrelatestotheareaundertheeffectivecontroloftheGovernmentoftheRepublicofCyprus.8ThedesignationiswithoutprejudicetopositionsonstatusandisinlinewiththeUnitedNationsSecurityCouncilResolution1244/99andtheAdvisoryOpinionoftheInternationalCourtofJusticeonKosovo’sdeclarationofIndependence.9ThestatisticaldataforIsraelaresuppliedbyandundertheresponsibilityoftherelevantIsraeliauthorities.TheuseofsuchdatabytheOECDand/ortheIEAiswithoutprejudicetothestatusoftheGolanHeights,EastJerusalemandIsraelisettlementsintheWestBankunderthetermsofinternationallaw.ElectricityMarketReportUpdateGeneralannexOutlookfor2023and2024PAGE42IEA.CCBY4.0.AbbreviationsandacronymsAEMOAustralianEnergyMarketOperatorCAISOCaliforniaIndependentSystemOperatorERCOTElectricReliabilityCouncilofTexasGDPGrossdomesticproductIRAInflationReductionActMISOMidcontinentIndependentSystemOperatorNERCNorthAmericanElectricReliabilityCorporationNPKNitrogen,phosphorus,andpotassiumPMIPurchasingManagers’IndexSPPSouthwestPowerPoolVREVariablerenewableenergyWECCWesternElectricityCoordinatingCouncilUnitsofmeasurebblbarrelbbl/dbarrelsperdaybcmbillioncubicmetresbcm/yrbillioncubicmetresperyearcm/scentimetrespersecondgCO2gramofcarbondioxidegCO2/kWhgramsofcarbondioxideperkilowatthourGJgigajouleGt/yrgigatonnesperyearGWgigawattMWmegawattMWhmegawatt-hourMtCO2milliontonnesofcarbondioxideMtCO2/yrmilliontonnesofcarbondioxideperyearGWgigawattGWhgigawatthourTWhterawatt-hourInternationalEnergyAgency(IEA)ThisworkreflectstheviewsoftheIEASecretariatbutdoesnotnecessarilyreflectthoseoftheIEA’sindividualMembercountriesorofanyparticularfunderorcollaborator.Theworkdoesnotconstituteprofessionaladviceonanyspecificissueorsituation.TheIEAmakesnorepresentationorwarranty,expressorimplied,inrespectofthework’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thework.Forfurtherinformation,pleasecontact:GCP(gcp@iea.org)orErenÇam(eren.cam@iea.org)SubjecttotheIEA’sNoticeforCC-licencedContent,thisworkislicencedunderaCreativeCommonsAttribution4.0InternationalLicence.Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Unlessotherwiseindicated,allmaterialpresentedinfiguresandtablesisderivedfromIEAdataandanalysis.IEAPublicationsInternationalEnergyAgencyWebsite:www.iea.orgContactinformation:www.iea.org/about/contactTypesetinFrancebyIEA-July2023Coverdesign:IEAPhotocredits:©Shutterstock