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Analysis and forecast to 2026

Electricity

2024

The IEA examines the

full spectrum

of energy issues

including oil, gas and

coal supply and

demand, renewable

energy technologies,

electricity markets,

energy efficiency,

access to energy,

demand side

management and

much more. Through

its work, the IEA

advocates policies that

will enhance the

reliability, affordability

and sustainability of

energy in its

31 member countries,

13 association

countries and beyond.

This publication and any

map included herein are

without prejudice to the

status of or sovereignty over

any territory, to the

delimitation of international

frontiers and boundaries and

to the name of any territory,

city or area.

Source: IEA.

International Energy Agency

Website: www.iea.org

IEA member

countries:

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Japan

Korea

Lithuania

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Spain

Sweden

Switzerland

Republic of Türkiye

United Kingdom

United States

The European

Commission also

participates in the

work of the IEA

IEA association

countries:

Argentina

Brazil

China

Egypt

India

Indonesia

Kenya

Morocco

Senegal

Singapore

South Africa

Thailand

Ukraine

INTERNATIONAL ENERGY

AGENCY

Electricity 2024 Abstract

Analysis and forecast to 2026

PAGE | 3

I EA. CC BY 4.0.

Abstract

Electricity is central to the functioning of modern societies and economies – and

its importance is only growing as technologies that run on electricity, such as

electric vehicles and heat pumps, become increasingly popular. Power generation

is currently the largest source of carbon dioxide (CO2) emissions in the world, but

it is also the sector leading the transition to net zero emissions through the rapid

expansion of renewable energy sources such as solar and wind power. Ensuring

consumers have secure and affordable access to electricity while also reducing

global carbon dioxide (CO2) emissions is one of the core challenges of the energy

transition.

Given these trends, the International Energy Agency’s Electricity 2024 is essential

reading. It offers a deep and comprehensive analysis of recent policies and market

developments, and provides forecasts through 2026 for electricity demand, supply

and CO2 emissions. The IEA’s electricity sector report, which has been published

regularly since 2020, provides insight into the evolving generation mix. In addition,

this year’s report features in-depth analysis on the drivers of recent declines in

electricity demand in Europe; the data centre sector’s impact on electricity

consumption; and recent developments in the global nuclear power sector.

/170

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Electricity2024Analysisandforecastto2026INTERNATIONALENERGYAGENCYTheIEAexaminestheIEAmemberIEAassociationfullspectrumcountries:countries:ofenergyissuesincludingoil,gasandAustraliaArgentinacoalsupplyandAustriaBrazildemand,renewableBelgiumChinaenergytechnologies,CanadaEgyptelectricitymarkets,CzechRepublicIndiaenergyefficiency,DenmarkIndonesiaaccesstoenergy,EstoniaKenyademandsideFinlandMoroccomanagementandFranceSenegalmuchmore.ThroughGermanySingaporeitswork,theIEAGreeceSouthAfricaadvocatespoliciesthatHungaryThailandwillenhancetheIrelandUkrainereliability,affordabilityItalyandsustainabilityofJapanenergyinitsKorea31membercountries,Lithuania13associationLuxembourgcountriesandbeyond.MexicoNetherlandsThispublicationandanyNewZealandmapincludedhereinareNorwaywithoutprejudicetothePolandstatusoforsovereigntyoverPortugalanyterritory,totheSlovakRepublicdelimitationofinternationalSpainfrontiersandboundariesandSwedentothenameofanyterritory,Switzerlandcityorarea.RepublicofTürkiyeUnitedKingdomUnitedStatesTheEuropeanCommissionalsoparticipatesintheworkoftheIEASource:IEA.InternationalEnergyAgencyWebsite:www.iea.orgElectricity2024AbstractAnalysisandforecastto2026AbstractElectricityiscentraltothefunctioningofmodernsocietiesandeconomies–anditsimportanceisonlygrowingastechnologiesthatrunonelectricity,suchaselectricvehiclesandheatpumps,becomeincreasinglypopular.Powergenerationiscurrentlythelargestsourceofcarbondioxide(CO2)emissionsintheworld,butitisalsothesectorleadingthetransitiontonetzeroemissionsthroughtherapidexpansionofrenewableenergysourcessuchassolarandwindpower.Ensuringconsumershavesecureandaffordableaccesstoelectricitywhilealsoreducingglobalcarbondioxide(CO2)emissionsisoneofthecorechallengesoftheenergytransition.Giventhesetrends,theInternationalEnergyAgency’sElectricity2024isessentialreading.Itoffersadeepandcomprehensiveanalysisofrecentpoliciesandmarketdevelopments,andprovidesforecaststhrough2026forelectricitydemand,supplyandCO2emissions.TheIEA’selectricitysectorreport,whichhasbeenpublishedregularlysince2020,providesinsightintotheevolvinggenerationmix.Inaddition,thisyear’sreportfeaturesin-depthanalysisonthedriversofrecentdeclinesinelectricitydemandinEurope;thedatacentresector’simpactonelectricityconsumption;andrecentdevelopmentsintheglobalnuclearpowersector.PAGE3IEA.CCBY4.0.Electricity2024Acknowledgements,contributorsandcreditsAnalysisandforecastto2026Acknowledgements,contributorsandcreditsThisstudywaspreparedbytheGas,CoalandPowerMarkets(GCP)DivisionofIEA.CCBY4.0.theInternationalEnergyAgency(IEA).ItwasdesignedanddirectedbyErenÇam,EnergyAnalystforElectricity.Themainauthorsare:ErenÇam,ZoeHungerford,NiklasSchoch,FrancysPintoMiranda,CarlosDavidYáñezdeLeón.KeisukeSadamori,directoroftheIEAEnergyMarketsandSecurity(EMS)DirectorateandDennisHesseling,HeadofGCP,providedexpertguidanceandadvice.ValuablecommentsandguidancewereprovidedbyotherseniormanagementwithintheIEA,inparticular,LauraCozziandTimGould.Inaddition,expertguidanceandvaluableinputofCarlosFernándezÁlvarez,SeniorEnergyAnalyst,isgreatlyappreciated.Thereportalsobenefitedfromanalysis,dataandinputfromSyrineElAbed,NadimAbillama,JennyBirkeland,JavierJorqueraCopier,KeithEverhart,CaroleEtienne,StavroulaEvangelopoulou,TakeshiFurukawa,AsthaGupta,CraigHart,JulianKeutz,JinpyungKim,Tae-YoonKim,PabloHevia-Koch,RenaKuwahata,ArneLilienkamp,RitaMadeira,GergelyMolnár,JohnMoloney,YuNagatomi,RanyaOualid,CamillePaillard,IsaacPortugal,BrendanReidenbach,UweRemme,FrederickRitter,MaxSchönfischandGianlucaTonolo.IEAcolleaguesacrosstheagencyprovidedvaluableinput,commentsandfeedback,inparticular,HeymiBahar,AlessandroBlasi,TorilBosoni,StéphanieBouckaert,ElizabethConnelly,GaiaGuadagnini,CiaránHealy,PaulHugues,MartinKüppers,YannickMonschauer,ApostolosPetropoulos,LeonieStaas,AnthonyVautrin,BrentWannerandJacquesWarichet.TheauthorswouldalsoliketothankDianeMunroforskilfullyeditingthemanuscriptandtheIEACommunicationandDigitalOffice,inparticular,JethroMullen,JuliaHorowitzandAstridDumond.WealsothankEinarEinarssonforhisassistanceonsettingupthepeerreview.ManyexpertsfromoutsideoftheIEAreviewedthereportandprovidedvaluableinputandcomments.Theyinclude:MichelBerthélemy(NEA),SarahKeay-Bright(ESO),BramClaeys(RAP),BrentDixon(INL),GaneshDoluweera(CER),FernandoDominguez(EUDSOEntity),CarlosFinat(KAEL),PeterFraser(independentconsultant),RafaelMuruaisPAGE4Electricity2024Acknowledgements,contributorsandcreditsAnalysisandforecastto2026Garcia(ACEREUROPA),RafailaGrigoriou(VaasaETT),EdwinHaesen(ENTSOE),JanHorstKeppler(NEA),DonghoonKim(SK),WikusKruger(UniversityofCapeTown),FranciscoLaverón(Iberdrola),KingLee(AIEA),StefanLorenczik(FrontierEconomics),AkosLosz(ColumbiaUniversity),ChristophMaurer(Consentec),TatianaMitrova(ColumbiaUniversity),EnriqueDeLasMorenasMoneo(ENEL),EmmanuelNeau(EDF),NoorMizaRazali(TenagaNasionalBerhad),AnaLiaRojas(ACERAChile),SamirChandraSaxena(POSOCO),MaríaSicilia(ENAGAS),MarcioSzechtman(CIGRE),KunieTaie(IEEJ),ArjonValencia(IEMOP),JohannesWagner(Guidehouse),MatthewWittenstein(ESCAP)andRinaBohleZeller(Vestas).PAGE5IEA.CCBY4.0.Electricity2024TableofContentsAnalysisandforecastto2026TableofContentsExecutivesummary..........................................................................................8Globaltrends...............................................................................................15Demand:Globalelectricityusepostsstronggrowthto2026.....................15Emergingeconomiesaretheenginesofglobalelectricitydemandgrowth.............................15Chinahasthelargestincreaseinelectricitydemand,whileIndiaseesthefastestgrowth.....17SoutheastAsiaandIndiamakestridesinpercapitaelectricityuse,butAfricalagsbehind...19Spotlight:NavigatingtheuncertaintiesintherecoveryofEUelectricitydemand....................20Globalelectricitydemandfromdatacentrescoulddoubletowards2026...............................31Risingself-consumptionindistributedsystemsanddatacollectionchallenges......................37Supply:Cleanelectricitytomeetalladditionaldemandoutto2026.........40Renewablesovertakecoalasthelargestsourceofglobalelectricitysupplyin2025.............40CoalconstrainedbyrenewablesinChina,butnotinotherpartsofAsia................................42Spotlight:Nucleargenerationwillreachanewrecordhighby2025.......................................44Hydropowergenerationwasreducedin2023innumerousregionsduetoweatherimpact...55Thesupplychainofgasturbinesisgeographicallyconcentratedindifferentways................56Emissions:CO2fromelectricitysectorenteringastructuraldecline........61Chinaaccountsforhalfofthedeclineinglobalpowergenerationemissionsto2026............61China,theUnitedStatesandEuropeanUnionleaddeclinesinpowersectoremissions.......62Emissionintensityofthepowersectortofallatanunprecedentedrate..................................63Prices:Wholesaleelectricitypricesfallfromrecordhighs........................65Electricitypricesinmanyregionsstillremainabovepre-pandemiclevels..............................65Whatdoesenergy-intensiveindustrypayforelectricityacrosstheworld?.............................69Householdelectricitypricesandaffordability...........................................................................73Reliability:Monitoringelectricitysecurityremainsessential.....................76Specificmeasuresandmarketsforsysteminertiaarebecomingcommon............................76Extremeweathereventscausedlarge-scalepoweroutagesin2023.....................................78Supplyandgridissuesledtomajoroutagesmostlyinemerginganddevelopingcountries..80Understandingthehumanfactorinpowerdisruptionsandoutages........................................82Regionalfocus................................................................................88AsiaPacific......................................................................................................88Americas........................................................................................................110Europe............................................................................................................121PAGE6IEA.CCBY4.0.Electricity2024TableofContentsAnalysisandforecastto2026Eurasia...........................................................................................................138MiddleEast....................................................................................................142Africa..............................................................................................................148Annexes.........................................................................................................159Summarytables.....................................................................................................................159Regionalandcountrygroupings............................................................................................164Abbreviationsandacronyms..................................................................................................166Unitsofmeasure....................................................................................................................168PAGE7IEA.CCBY4.0.Electricity2024ExecutivesummaryAnalysisandforecastto2026ExecutivesummaryGlobalelectricitydemandrosemoderatelyin2023butissettogrowfasterthrough2026Fallingelectricityconsumptioninadvancedeconomiesrestrainedgrowthinglobalpowerdemandin2023.Theworld’sdemandforelectricitygrewby2.2%in2023,lessthanthe2.4%growthobservedin2022.WhileChina,IndiaandnumerouscountriesinSoutheastAsiaexperiencedrobustgrowthinelectricitydemandin2023,advancedeconomiespostedsubstantialdeclinesduetoalacklustremacroeconomicenvironmentandhighinflation,whichreducedmanufacturingandindustrialoutput.Globalelectricitydemandisexpectedtoriseatafasterrateoverthenextthreeyears,growingbyanaverageof3.4%annuallythrough2026.Thegainswillbedrivenbyanimprovingeconomicoutlook,whichwillcontributetofasterelectricitydemandgrowthbothinadvancedandemergingeconomies.ParticularlyinadvancedeconomiesandChina,electricitydemandwillbesupportedbytheongoingelectrificationoftheresidentialandtransportsectors,aswellasanotableexpansionofthedatacentresector.Theshareofelectricityinfinalenergyconsumptionisestimatedtohavereached20%in2023,upfrom18%in2015.Whilethisisprogress,electrificationneedstoacceleraterapidlytomeettheworld’sdecarbonisationtargets.IntheIEA’sNetZeroEmissionsby2050Scenario,apathwayalignedwithlimitingglobalwarmingto1.5°C,electricity’sshareinfinalenergyconsumptionnears30%in2030.Electricityconsumptionfromdatacentres,artificialintelligence(AI)andthecryptocurrencysectorcoulddoubleby2026.Datacentresaresignificantdriversofgrowthinelectricitydemandinmanyregions.Aftergloballyconsuminganestimated460terawatt-hours(TWh)in2022,datacentres’totalelectricityconsumptioncouldreachmorethan1000TWhin2026.ThisdemandisroughlyequivalenttotheelectricityconsumptionofJapan.Updatedregulationsandtechnologicalimprovements,includingonefficiency,willbecrucialtomoderatethesurgeinenergyconsumptionfromdatacentres.EmerginganddevelopingeconomiesaretheenginesofglobalelectricitydemandgrowthAbout85%ofadditionalelectricitydemandthrough2026issettocomefromoutsideadvancedeconomies,withChinacontributingsubstantiallyevenasthecountry’seconomyundergoesstructuralchanges.In2023,China’sPAGE8IEA.CCBY4.0.Electricity2024ExecutivesummaryAnalysisandforecastto2026electricitydemandroseby6.4%,drivenbytheservicesandindustrialsectors.Withthecountry’seconomicgrowthexpectedtoslowandbecomelessreliantonheavyindustry,thepaceofChineseelectricitydemandgrowtheasesto5.1%in2024,4.9%in2025and4.7%in2026inourforecasts.Evenso,thetotalincreaseinChina’selectricitydemandthrough2026ofabout1400TWhismorethanhalfoftheEuropeanUnion’scurrentannualelectricityconsumption.ElectricityconsumptionpercapitainChinaalreadyexceededthatoftheEuropeanUnionattheendof2022andissettorisefurther.TherapidlyexpandingproductionofsolarPVmodulesandelectricvehicles,andtheprocessingofrelatedmaterials,willsupportongoingelectricitydemandgrowthinChinawhilethestructureofitseconomyevolves.Chinaprovidesthelargestshareofglobalelectricitydemandgrowthintermsofvolume,butIndiapoststhefastestgrowthratethrough2026amongmajoreconomies.Followinga7%increaseinIndia’selectricitydemandin2023,weexpectgrowthabove6%onaverageannuallyuntil2026,supportedbystrongeconomicactivityandexpandingownershipofairconditioners.Overthenextthreeyears,IndiawilladdelectricitydemandroughlyequivalenttothecurrentconsumptionoftheUnitedKingdom.Whilerenewablesaresettomeetalmosthalfofthisdemandgrowth,one-thirdisexpectedtocomefromrisingcoal-firedgeneration.WealsoexpectSoutheastAsiatoseerobustannualincreasesinelectricitydemandof5%onaveragethrough2026,ledhigherbystrongeconomicactivity.WhileelectricityusepercapitainIndiaandSoutheastAsiaisrapidlyrising,ithasbeeneffectivelystagnantinAfricaformorethanthreedecades.PercapitaconsumptioninAfricaevendeclinedinrecentyearsasthepopulationgrewfasterthanelectricitysupplywasmadeavailable,andweonlyexpectittorecovertoits2010-15levelsbytheendof2026attheearliest.Thirtyyearsago,apersoninAfricaconsumedmoreelectricityonaveragethansomeonelivinginIndiaorSoutheastAsia.However,strongincreasesinelectricitydemandandsupplyinIndiaandSoutheastAsiainrecentdecades–whichhavegonehandinhandwithaboomineconomicdevelopment–havetransformedtheseregionsataspectacularpace.Meanwhile,Africa'spercapitaelectricityconsumptionin2023washalfthatofIndiaand70%lowerthaninSoutheastAsia.OurforecastforAfricaforthe2024-26periodanticipatesaverageannualgrowthintotalelectricitydemandof4%,doublethemeangrowthrateobservedbetween2017and2023.Two-thirdsofthisgrowthindemandissettobemetbyexpandingrenewables,withtheremaindercoveredmostlybynaturalgas.ElectricitydemandintheUnitedStatesfellby1.6%in2023afterincreasing2.6%in2022,butitisexpectedtorecoverinthe2024-26outlookperiod.Akeyreasonforthedeclinewasmilderweatherin2023comparedwith2022,thoughaslowdowninthemanufacturingsectorwasalsoafactor.WeforecastaPAGE9IEA.CCBY4.0.Electricity2024ExecutivesummaryAnalysisandforecastto2026moderateincreaseindemandof2.5%in2024,assumingareversiontoaverageweatherconditions.Thiswillbefollowedbygrowthaveraging1%in2025-26,ledbyelectrificationandtheexpansionofthedatacentresector,whichisexpectedtoaccountformorethanone-thirdofadditionaldemandthrough2026.Slimchancesofaquickrecoveryforenergy-intensiveindustriesintheEuropeanUnionElectricitydemandintheEuropeanUniondeclinedforthesecondconsecutiveyearin2023,eventhoughenergypricesfellfromrecordhighs.Followinga3.1%dropin2022,the3.2%year-on-yeardeclineinEUdemandin2023meantthatitdroppedtolevelslastseentwodecadesago.Asin2022,weakerconsumptionintheindustrialsectorwasthemainfactorthatreducedelectricitydemand,asenergypricescamedownbutremainedabovepre-pandemiclevels.In2023,therewerealsosignsofsomepermanentdemanddestruction,especiallyintheenergy-intensivechemicalandprimarymetalproductionsectors.Thesesegmentswillremainvulnerabletoenergypriceshocksoverouroutlookperiod.EUelectricityconsumptionisnotexpectedtoreturnto2021levelsuntil2026attheearliest.ElectricitydemandintheEuropeanUnion’sindustrialsectorfellbyanestimated6%in2023afterasimilardeclinein2022.Assumingtheindustrialsectorgraduallyrecoversasenergypricesmoderate,EUelectricitydemandgrowthisforecasttorisebyanaverage2.3%in2024-26.Electricvehicles,heatpumpsanddatacentreswillremainstrongpillarsofgrowthovertheperiod–togetheraccountingforhalfofexpectedgainsintotaldemand.Electricitypricesforenergy-intensiveindustriesintheEuropeanUnionin2023werealmostdoublethoseintheUnitedStatesandChina.Despiteanestimated50%pricedeclineintheEuropeanUnionin2023versus2022,energy-intensiveindustriesintheregioncontinuedtofacefarhigherelectricitycostscomparedwiththeUnitedStatesandChinaintheaftermathofRussia’sinvasionofUkraine.Thepricegapbetweenenergy-intensiveindustriesintheEuropeanUnionandthoseintheUnitedStatesandChina,whichalreadyexistedbeforetheenergycrisis,haswidened.Asaresult,thecompetitivenessofEUenergy-intensiveindustriesisexpectedtoremainunderpressure.PolicymakersarecurrentlydiscussingnewpolicyinitiativesandfinancialinstrumentstoenabletheEuropeanUniontopositionitselfamongotherglobalindustrialheavyweights.ThescopeandeffectivenessofthesemeasureswilllikelydeterminethefutureoftheEuropeanUnion’senergy-intensiveindustrialsector.PAGE10IEA.CCBY4.0.Electricity2024ExecutivesummaryAnalysisandforecastto2026Cleanelectricitysupplyisforecasttomeetalloftheworld’sdemandgrowththrough2026Record-breakingelectricitygenerationfromlow-emissionssources–whichincludesnuclearandrenewablessuchassolar,windandhydro–issettocoverallglobaldemandgrowthoverthenextthreeyears.Low-emissionssources,whichwillreducetheroleoffossilfuelsinproducingelectricityglobally,areforecasttoaccountforalmosthalfoftheworld’selectricitygenerationby2026,upfrom39%in2023.Overthenextthreeyears,low-emissionsgenerationissettoriseattwicetheannualgrowthratebetween2018and2023–aconsequentialchange,giventhatthepowersectorcontributesthemosttoglobalcarbondioxide(CO2)emissionstoday.Renewablesaresettoprovidemorethanone-thirdoftotalelectricitygenerationgloballybyearly2025,overtakingcoal.Theshareofrenewablesinelectricitygenerationisforecasttorisefrom30%in2023to37%in2026,withthegrowthlargelysupportedbytheexpansionofevercheapersolarPV.Throughthisperiod,renewablesaresettomorethanoffsetdemandgrowthinadvancedeconomiessuchastheUnitedStatesandtheEuropeanUnion,displacingfossil-firedsupply.Atthesametime,inChina,therapidexpansionofrenewableenergysourcesisexpectedtomeetalladditionalelectricitydemand,thoughtheweatherandtheextenttowhichthecountry’sdemandgrowtheasesremainkeysourcesofuncertaintyfortheoutlook.Thestrongexpansioninrenewablepowercapacitymustalsobeaccompaniedbyacceleratedinvestmentingridsandsystemflexibilitytoensureitssmoothintegration.Therapidgrowthofrenewables,supportedbyrisingnucleargeneration,issettodisplaceglobalcoal-firedgeneration,whichisforecasttofallbyanaverageof1.7%annuallythrough2026.Thisfollowsa1.6%increaseincoal-firedoutputin2023amiddroughtsinIndiaandChinathatreducedhydropoweroutputandincreasedcoal-firedgeneration,morethanoffsettingstrongdeclinesincoal-firedgenerationintheUnitedStatesandtheEuropeanUnion.ThemajorfactorthatwilldeterminetheglobaloutlookisevolvingtrendsinChina,wheremorethanhalfofworld’scoal-firedgenerationtakesplace.Coal-firedgenerationinChinaiscurrentlyoncoursetoexperienceaslowstructuraldecline,drivenbythestrongexpansionofrenewablesandgrowingnucleargeneration,aswellasmoderatingeconomicgrowth.Despitethecommissioningofnewplantstoboostthesecurityofenergysupply,theutilisationrateofChinesecoal-firedplantsisexpectedtocontinuetofallastheyareusedmoreflexiblytocomplementrenewables.Nevertheless,coal-firedgenerationinChinawillbeinfluencedsignificantlybythepaceoftheeconomy’srebalancing,hydropowertrends,andbottlenecksinintegratingrenewablesintothecountry’spowersystem.PAGE11IEA.CCBY4.0.Electricity2024ExecutivesummaryAnalysisandforecastto2026Naturalgas-firedgenerationisexpectedtoriseslightlyovertheoutlookperiod.In2023,sharpdeclinesingas-firedpowergenerationintheEuropeanUnionweremorethanoffsetbymassivegainsintheUnitedStates,wherenaturalgas,whichhasincreasinglyreplacedcoal,recordeditshighest-evershareinpowergeneration.Globalgas-firedoutputgrewbylessthan1%in2023.Through2026,weforecastanaverageannualgrowthrateofaround1%.Whilegas-firedoutputinEuropeisexpectedtocontinuedeclining,globalgrowthwillbesupportedbysignificantgainsinAsia,theMiddleEastandAfricaamidrisingdemandforpowerintheseregionsandtheavailabilityofadditionalliquefiednaturalgas(LNG)supplyfrom2025onward.Nuclearpowergenerationisontracktoreachanewrecordhighby2025By2025,globalnucleargenerationisforecasttoexceeditspreviousrecordsetin2021.Evenassomecountriesphaseoutnuclearpowerorretireplantsearly,nucleargenerationisforecasttogrowbycloseto3%peryearonaveragethrough2026asmaintenanceworksarecompletedwithinFrance,Japanrestartsnuclearproductionatseveralpowerplants,andnewreactorsbegincommercialoperationsinvariousmarkets,includingChina,India,Korea,andEurope.Manycountriesaremakingnuclearpoweracriticalpartoftheirenergystrategiesastheylooktosafeguardenergysecuritywhilereducinggreenhousegasemissions.AttheCOP28climatechangeconferencethatconcludedinDecember2023,morethan20countriessignedajointdeclarationtotriplenuclearpowercapacityby2050.Achievingthisgoalwillrequiretacklingthekeychallengeofreducingconstructionandfinancingrisksinthenuclearsector.Momentumisalsogrowingbehindsmallmodularreactor(SMR)technology.Thetechnology’sdevelopmentanddeploymentremainsmodestandisnotwithoutitsdifficulties,butR&Disstartingtopickup.Asiaremainsthemaindriverofgrowthinnuclearpower,withtheregion’sshareofglobalnucleargenerationforecasttoreach30%in2026.AsiaissettosurpassNorthAmericaastheregionwiththelargestinstallednuclearcapacitybytheendof2026,withalargenumberofplantscurrentlyunderconstructionexpectedtobecompletedbythen.MorethanhalfofnewreactorsexpectedtobecomeoperationalduringtheoutlookperiodareinChinaandIndia.NuclearpowerhasseenparticularlystronggrowthinChinaoverthepastdecade,withcapacityadditionsofabout37gigawatts(GW),equivalenttoalmosttwo-thirdsofitscurrentnuclearcapacity.ThisresultedinChina’sshareinglobalnucleargenerationrisingfrom5%in2014toabout16%in2023.Chinastartedthecommercialoperationofitsfirstfourth-generationreactorinDecember2023,furtherunderscoringthecountry'snuclearpoweradvances.PAGE12IEA.CCBY4.0.Electricity2024ExecutivesummaryAnalysisandforecastto2026EmissionsfromelectricitygenerationareenteringstructuraldeclineasdecarbonisationgatherspaceGlobalCO2emissionsfromelectricitygenerationareexpectedtofallbymorethan2%in2024afterincreasingby1%in2023.Thisissettobefollowedbysmalldeclinesin2025and2026.Thestronggrowthincoal-firedpowergenerationin2023–especiallyinChinaandIndiaamidreducedhydropoweroutput–wasresponsiblefortheriseintheglobalelectricitysector’sCO2emissions.Ascleanelectricitysupplycontinuestoexpandrapidly,theshareoffossilfuelsinglobalgenerationisforecasttodeclinefrom61%in2023to54%in2026,fallingbelow60%forthefirsttimeinIEArecordsdatingbackto1971.Whileextremeweatherconditions,economicshocks,orchangesingovernmentpoliciescouldleadtoatemporaryriseinemissionsinindividualyears,thebroaderdeclineinpowersectoremissionsisexpectedtopersistasrenewablesandnuclearpowercapacitycontinuetoexpandanddisplacefossil-firedgeneration.TheCO2intensityofglobalelectricitygenerationissettofallattwicetheraterecordedinthepre-pandemicperiod.Theforecastedaveragedeclineof4%inCO2intensitybetween2023and2026isdoublethe2%observedintheperiodbetween2015and2019.TheEuropeanUnionisexpectedtorecordthehighestrateofprogressinreducingemissionsintensity,averaginganimprovementof13%peryear.ThisisfollowedbyChina,withannualimprovementsforecastat6%,andtheUnitedStatesat5%.ThedeclineintheCO2intensityofelectricitygenerationmeansthatemissionssavingsviatheelectrificationoftransport,heatingandindustrywillbecomeevenmoresubstantial.Wholesaleelectricitypricesremainabovepre-CovidlevelsinmanycountriesWholesaleelectricitypricesinmanycountriesfellin2023fromtherecordhighsobservedin2022.Thistookplaceintandemwithdeclinesinpricesforenergycommoditiessuchasnaturalgasandcoal.Thereare,however,regionaldifferences.WholesaleelectricitypricesinEuropedeclinedonaveragebymorethan50%in2023fromrecordlevelsin2022.Despitethis,pricesinEuropewerestillroughlydouble2019levels,whereasUSpricesin2023wereonlyabout15%higherthanin2019.UncertaintyaboutboththepaceofFrance’snuclearrecoveryandnaturalgaspricesaresupportinghigherfuturespricesinEuropeforupcomingwinters.Thehydropower-dominatedNordicsremaintheonlymarketinEuropewithaveragewholesaleelectricitypricescomparabletothoseintheUnitedStatesandAustralia.WholesalepricesinJapanandIndiaalsoremainedabove2019levelsin2023.PAGE13IEA.CCBY4.0.Electricity2024ExecutivesummaryAnalysisandforecastto2026GrowingweatherimpactsonpowersystemshighlighttheimportanceofinvestinginelectricitysecurityGlobalhydropowergenerationdeclinedin2023duetoweatherimpactssuchasdroughts,belowaveragerainfallandearlysnowmeltsinnumerousregions.Canada,China,Colombia,CostaRica,India,Mexico,Türkiye,theUnitedStates,andVietnam,alongwithothercountries,allsawhydropowergenerationdecline.Theglobalhydropowercapacityfactor,akeymeasureofutilisationrate,felltobelow40%,thelowestvaluerecordedinatleastthreedecades.Incertaincountries,diminishedhydropoweroutputledtoenergyshortages,heightenedrelianceonfossilsourcessuchascoalandgas,andraisedconcernsaboutthestabilityofelectricitysupply.Theoveralltrendunderscoresthesusceptibilityofhydropowertoweatherpatternsandthepotentialexposureofcountriesthatrelyheavilyonhydrotogenerateelectricity.Diversifyingenergysources,buildingregionalpowerinterconnectionsandimplementingstrategiesforresilientgenerationinthefaceofchangingweatherpatternswillbeincreasinglyimportant.Extremeweathereventstriggeredmajorpoweroutagesin2023intheUnitedStatesandIndia.Thisunderlinedtheneedtoboostresilienceasweatherimpactsonpowersystemsincrease,withbothsupplyanddemandbecomingmoreweather-dependent.Insufficientpowercapacity,fuelsupplychallengesandgrid-relatedtechnicalissuesalsocontinuedtocausesignificantpowershortagesinmanyregions.ThemajorityoftheseoutageswereobservedinemergingeconomiessuchasPakistan,KenyaandNigeria,whichareparticularlyaffectedbyinsufficientelectricitysupply,infrastructureproblemsandstrainedgridsinthefaceofrisingpowerdemand.Expanded,strongergridswouldnotonlyensurereliableelectricitybutalsoserveasavitalbackboneforintegratingrenewablesintopowersystems.Improvingdatacollection,digitalisationandgreaterdatatransparencyregardingoutagesisalsoessentialtoprovidebetterinsightintowhyfaultsoccurredandtohelpdeveloppreventativemeasures.Specificoperatingmeasuresandnewmarketsforensuringthestabilityofpowersystemsarebecomingmorecommon.Countrieswithhighsharesofvariablerenewablegenerationareimplementingmechanismstoensureasteadypowersystemfrequency.Someregionsareestablishingminimumrequirementsforsysteminertia,apropertytypicallyprovidedbyconventionalgeneratorswithspinningrotorsthathelpsenhancethepowersystem’sresilienceduringdisturbances.Additionally,variouscountriesincludingtheUnitedKingdom,IrelandandAustraliahavebeenintroducingmarketsandmeasuressuchasfastfrequencyresponseandsimilarservicesthatstabilisethepowersystemrapidlyafterdisruptions.Batterystoragesystemscanprovidesuchservicesforgridstabilitywhileenhancingsystemflexibility,thusplayingacrucialroleinintegratingrenewableenergysources.PAGE14IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026GlobaltrendsDemand:Globalelectricityusepostsstronggrowthto2026EmergingeconomiesaretheenginesofglobalelectricitydemandgrowthGlobalelectricitydemandgrewbyarelativelymodest2.2%in2023,downfrom2.4%in2022.Growth,however,isoncoursetoacceleratetoahigher3.4%inour2024-2026forecastperiod,withemergingmarketscontinuingtodominategrowingelectricitydemand,astheydidin2023.Thefar-rangingrepercussionsoftheenergycrisiscontinuedthroughout2023,withelevatedinflationlevels,highinterestratesandheavydebtburdensexertingdownwardpressureoneconomiesaroundtheworld.Still,emergingmarketcountriesrecordedstronggrowthinelectricitydemand.Bycontrast,mostadvancedeconomiesposteddeclinesamidthelacklustremacroeconomicenvironmentaswellastheweakindustryandmanufacturingsectors,despitecontinuedelectrification.Milderweathercomparedtothepreviousyearalsoexerteddownwardpressureonelectricityconsumptioninsomeregions,includingtheUnitedStates.Year-on-yearchangeinelectricitydemandbyregion,2022-20263070015%29900TWh2910085%IEA.CCBY4.0.2830027500267002022-+2023+2026ChinaRestofworldIndiaSoutheastAsiaAdvancedeconomiesIEA.CCBY4.0.Note:AdvancedeconomiesgroupinginthischartexcludesMexicoandTürkiye.PAGE15Electricity2024GlobaltrendsAnalysisandforecastto2026Stronggrowthinemergingeconomiescombinedwithananticipatedrecoveryinindustryandongoingelectrificationoftheresidentialandtransportationsectorsinmanypartsoftheworldwillbethemainstaysofincreasingelectricityoverouroutlook.Animportantnewsourceofhigherelectricityconsumptioniscomingfromenergy-intensivedatacentres,artificialintelligence(AI)andcryptocurrencies,whichcoulddoubleby2026.About85%oftheadditionalelectricitythrough2026issettocomefromoutsideadvancedeconomies,mostlyinPeople’sRepublicofChina(hereafter,“China”),IndiaandSoutheastAsia.TheInternationalMonetaryFund(IMF)October2023outlookprojectsagradualeconomicrecoveryforadvancedeconomies,withthe2023GDPgrowthrateof1.5%followedby1.4%in2024andanannualaverageof1.8%in2025-2026.Bycontrast,foremergingeconomies,theIMFprojectssustainedrobustgrowthofanaverageannual4%,orslightlyhigherat4.1%,during2024-2026,inlinewiththeestimated4%in2023.Theshareofelectricityinfinalenergyconsumptionisestimatedat20%in2023,upfrom18%in2015.Whilethereisprogress,electrificationofendusesneedstooccuratamuchfasterpacetoreachdecarbonisationtargets.IntheIEA’sNetZeroby2050Scenario(NZEScenario),apathwayalignedwithlimitingglobalwarmingto1.5°C,theelectricityshareinfinalenergyconsumptionnears30%by2030.Year-on-yearpercentchangeinelectricitydemandinselectedregions,2019-202615%10%5%0%-5%-10%-15%202020222024202620202022202420262020202220242026202020222024202620202022202420262020202220242026WorldChinaIndiaSoutheastAsiaUnitedStatesEuropeanUnionHistoricaldemandUpdatedforecastPreviousforecast(July2023)IEA.CCBY4.0.PAGE16IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Chinahasthelargestincreaseinelectricitydemand,whileIndiaseesthefastestgrowthElectricitydemandreflecteddivergingtrendsin2023,withadvancedeconomiesrecordingsignificantdeclines,whileemergingmarketcountries,andespeciallyChinaandIndia,recordedstronggrowthratesonrisingdemandforelectricityspurredbyeconomicactivity.Chinapostedgrowthof6.4%inelectricitydemandin2023,comparedtothe3.7%year-on-yearincreasein2022.Followingtheeasingofstringentpandemicmeasuresatend-2022,electricitydemandgrowthacceleratedfromaround3%toover5%year-on-yearbyH12023,andcontinuedtorisefurtherinH2toclosetheyearatover6%.Whileconstruction-relatedindustriessuchasglassandcementsawaslowdownin2023,growthinChineseelectricityconsumptionwasdrivenhigherbytheservicesandvariousindustrialsectors,includingmanufacturingofPVmodules,electricvehicles,andtheprocessingofassociatedmaterials.Theeconomyhasshownsomesignsofrebalancingandisexpectedtogrowataslowerpaceinthecomingyears.Asaresult,weforecastelectricitydemandgrowthat5.1%in2024,beforegraduallyeasingto4.9%in2025and4.7%in2026.Despitethisslowerpaceofgrowth,China’sincreaseinelectricitydemandofanestimated1400TWhto2026isstillmorethan50%ofcurrenttotalannualelectricityconsumptionoftheEuropeanUnion.ElectricityconsumptionpercapitainChinaalreadyexceededthatoftheEuropeanUnionattheendof2022.However,thepercapitaelectricityconsumptionofhouseholdsinChinaisstillbelowtheaverageforEUhouseholds.ElectricitydemandinIndiaroseby7%in2023comparedtolastyear’s8.6%.Continuedrapideconomicexpansionandrobustdemandforspacecoolingwerethemainpillarsofgrowth.Aftertwoconsecutiveyearsofstronggains,India’selectricityconsumptionsurpassedthatofJapanandKoreacombinedattheendof2023.Bolsteredbyafast-growingeconomyandpoweredbyincreasedelectrification,weexpectIndia’selectricitydemandtorisebyanannualaverageof6.5%overthe2024-2026period.WhileChinaprovidesthelargestshareofdemandgrowthintermsofvolume,Indiapoststhefastestgrowthrateoutto2026amongmajoreconomies.Followingthis,IndiawillhaveaddedadditionalelectricitydemandroughlyequivalenttothatoftheUnitedKingdomoverthenextthreeyears.PAGE17IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Totalelectricitydemand(left),population(centre),andelectricityconsumptionpercapita(right)inChina,EuropeanUnion,andtheUnitedStates,1990-202612000150015000TWhMillionpeople10000125012500kWhpercapita8000100010000600075075004000500500020002502500000199019941998200220062010201420182022202619901994199820022006201020142018202220261990199419982002200620102014201820222026ChinaEuropeanUnionUnitedStatesIEA.CCBY4.0.Notes:Thefiguresfor2024-2026areforecastvalues.HistoricaldataandforecastforpopulationarefromWorldBank(2022).ElectricitydemandintheUnitedStates,theworld’ssecondlargestconsumerbehindChina,declinedby1.6%in2023,after2.6%growthin2022.Amajorcontributortothedownturnwasthemilderweatherin2023comparedto2022.Aslowdowninthemanufacturingsectorwasalsoafactor,albeitwithsignificantlylessimpactthantheweather.WhilerecordhighsummertemperaturesinTexasdroveupcoolingdemand,overallsummerweatherwasmilderin2023comparedtolastyear.Similarly,wintermonthswerealsowarmer,withthelowestnumberofheatingdegreedaysrecordedsince2012.Weforecastamoderatereboundindemandof2.5%in2024,assumingnormalweatherconditions,followedbyanaveragegrowthrateof1%in2025-2026duetocontinuedelectrificationandstronggrowthinthedatacentresector.Weexpectmorethanone-thirdoftheadditionalUSelectricitydemandoutto2026tocomefromtheexpandingdatacentres.ElectricitydemandinJapandeclinedby3.7%in2023comparedtoa1%increasein2022.Despitehightemperaturesboostingcoolingdemandinthesummer,theslowdowninthemanufacturingsectorandcontinuedenergysavingmeasuresexertedstrongdownwardspressureonelectricityconsumption.However,againstabackdropofanassumedgradualrecoveryinthemanufacturingsectorin2024andacceleratingelectrificationofthetransportandheatingsectorsovertheoutlookperiod,amodestreboundinelectricitydemandof1.2%in2024isforecast,followedbyanaverageannualgrowthrateof0.2%in2025-2026.IntheEuropeanUnion,followinga3.1%declinein2022,electricitydemandfellbyafurther3.2%in2023.Weanticipateareturntogrowthin2024of1.8%,assumingapartialrecoveryintheindustrysectorgivenmoremoderateenergypricesandexpandingelectrificationofthetransportationandheatingsectors.EUelectricitydemandisforecasttogrowonaverageby2.5%annuallyduringthePAGE18IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto20262025-2026period,supportedbyanimprovedeconomicoutlook.Nevertheless,followingtherecorddemandcontractionintheEuropeanUnionlastyear,uncertaintiessurroundoverhowmuchofthisdeclineistemporaryandhowmuchisstructural.SoutheastAsiaandIndiamakestridesinpercapitaelectricityuse,butAfricalagsbehindIn1990,theaverageelectricityconsumptionperpersoninAfricaexceededthatofSoutheastAsiaby40%andIndiaby65%.However,recentdecadeshavewitnessedasignificantsurgeinelectricitydemandandsupplyinIndiaandSoutheastAsia,accompaniedbyrapideconomicdevelopmentandprosperityintheseregions.SoutheastAsiaovertookAfricainpercapitaelectricityconsumptionin1995,andIndiaachievedthesamein2008.Conversely,Africa'spercapitaelectricityconsumptionhasremainedstagnantformorethanthreedecades,with2023figuresrevealingittobehalfthatofIndiaand70%lowerthaninSoutheastAsia.The2023percapitaelectricityconsumptionontheAfricancontinentisestimatedat530kWh,whilesub-SaharanAfricaexcludingSouthAfricaaveragedaround190kWh.WeexpectpercapitaelectricityconsumptioninAfricatorecovertoits2010-2015levelsbytheendof2026attheearliest.Totalelectricitydemand(left),population(centre),andelectricityconsumptionpercapita(right)inAfrica,SoutheastAsia,andIndia,1990-2026200020002500TWhMillionpeople160016002000kWhpercapita1200120015008008001000400400500000199019941998200220062010201420182022202619901994199820022006201020142018202220261990199419982002200620102014201820222026AfricaSoutheastAsiaIndiaIEA.CCBY4.0.Notes:Thefiguresfor2024-2026areforecastvalues.HistoricaldataandforecastforpopulationarefromWorldBank(2022).Africa’spopulationissettogrowrapidly,makingupone-fifthoftheworld’spopulationby2030.Thishighlightsthemassivepotentialandneedforadditionalelectricitysupplyinthisregion.OurforecastforAfricafortheperiod2024-2026anticipatesanaverageannualgrowthintotalelectricitydemandof4%,morethandoublethemeangrowthrateobservedover2015-2023.Around60%ofthisPAGE19IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026growthindemandistobemetbyexpandingrenewables,theremainingmostlybynaturalgas.RenewablegenerationinAfricahasgrownonaverageby5%in2015-2023.Weforecastanaverageof10%growthinrenewablegenerationoutto2026inAfrica,asdeploymentofrenewablesgatherspace.Nevertheless,Inordertoachievetheregion'senergydevelopmentandclimatetargets,energyinvestmentswillhavetomorethandoublefromtoday'sUSD90billionby2030,withalmosttwo-thirdsofthisspendinggoingtowardscleanenergy.Asof2023,600millionpeople,ormorethan40%oftheAfricanpopulationlackedaccesstoelectricity,mostlyinsub-SaharanAfrica.AcommonsolutiontoelectricityaccessinAfricahasbeenoff-gridgasolineordieselgeneratorsastheypresentlowupfrontcostsincontrasttothecostofconnectiontothegrid.However,theiroperatingcostshavesignificantlyincreased,especiallysince2021afteroilpricessoared.Additionally,since2015theadoptionofdecentralisedmodularsolarhomesystems(SHS)hassteadilyincreased.CountrieslikeGhanaandKenyaincreasedtheirSHScapacitybymorethantwentytimesfrom2015to2019.SHSprovidershaveenabledthesystemimplementationthroughfinancialincentivessuchasapay-as-you-gobusinessmodel.Spotlight:NavigatingtheuncertaintiesintherecoveryofEUelectricitydemandWithconsecutivedeclinesofhistoricproportionsin2022(-3.1%)and2023(-3.2%),electricitydemandintheEuropeanUnionhasfallentolevelslastseentwodecadesago,predominantlyduetolowerconsumptionintheindustrialsectoramidtheeconomicmalaise.Ouranalysisshowsthatwithagradualrecoveryintheindustrialsector,EUelectricitydemandwouldreturnto2021levelsby2026attheearliest,withanaverageannualgrowthrateof2.3%.TheIMFOctober2023outlookprojectsGDPgrowthoftheeuroareafor2024at1.2%,indicatingaslightrecoveryfromthesubstantialslowdownin2023at0.7%GDPgrowththatfollowedarobust3.3%in2022.Accordingly,theEUeconomyisexpectedtogrowfasterover2025-2026,withanaverageannualgrowthrateofaround1.8%.Inadditiontothegradualrecoveryineconomicgrowth,strongdriversofelectricitydemandintheperiodto2026willcomefromelectricvehicles,heatpumpsanddatacentres,whichcombinedareexpectedtoaccountforhalfofthetotaldemandgains.Anestimatedtotalof9millionnewbatteryelectricvehiclesand11millionnewheatpumpsareexpectedtobecomeoperationalby2026intheEuropeanUnion,whichwillaccountforalargeshareofthisstrongergrowth.Moreover,weforecastthatelectricityconsumptionfromdatacentresintheEuropeanUnionin2026willbe30%higherthan2023levels,asnewdatafacilitiesarecommissionedamidincreaseddigitalisationandAIcomputations.IrelandandDenmarkalonemakeup20%oftheexpectedincreaseindatacentreelectricitydemandto2026.PAGE20IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026EstimateddriversofchangeinelectricitydemandintheEuropeanUnion,2021-2026TWh2600255125612550+12+29-252500-55+19+372450-222400-562393+7223502021DemandDemand2023Demand2026declinedeclinerecovery202220232024-26IndustryElectricvehiclesHeatpumpsDatacentresOtherIEA.CCBY4.0.Notes:Otherincludesthecombinedeffectofchangesinelectricitydemandinhouseholds,servicesandothersectors,includingincreasesfromEVs,heatpumpsanddatacentresin2022and2023.For2024-2026theseareshownseparately.In2022,thenetimpactofweatherondemandisestimatedtohavebeenareductionof13TWh.In2023,netweatherimpactisestimatedtohaveaccountedforareductionof7TWh.IndustrywasthemainfactorbehindthedeclineinEUelectricitydemandin2022and2023Despiteenergypricesfallingfromtheirpreviousrecordhighs,EUelectricitydemandfurtherdeclinedin2023.Lowerindustrialelectricitydemandwasthemostimportantfactor,asinthepreviousyear.Followinga5.8%declinein2022,weestimateelectricityconsumptionintheEUindustrialsectorfell6%year-on-yearin2023,withenergy-intensiveindustriesthehardesthit.Despiteregionalvariations,theaverageEuropeanwholesaleelectricitypricein2023wasstillmorethandoublethe2019level(seethePriceschapterformoreanalysis).This,combinedwithslowereconomicgrowth,lowerconsumerdemand,weakerexportsandtheoverhangofstocksfrom2021and2022,depressedEUindustrialelectricitydemandfurther.Theimpactofmilderweatheronelectricityconsumptionalsoweighedondemand,althoughtoamuchmorelimitedextent.Overall,wintertemperatureswerehigherandsummertemperatureswerelowercomparedto2022,resultinginlessspaceheatingandcooling.About0.3percentagepointsofthe3.2%declineinEUelectricitydemandisattributabletoweather,whichmeansthattheyear-on-yeardeclinewouldhavebeen2.9%withouttheinfluenceofweather.Thesix-monthmovingaveragefortheEUwholesaleelectricitypricewasalmost45%lowerinthesecondhalfof2023comparedtothefirsthalf,stabilisingaroundPAGE21IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026EUR100/MWhinthefourthquarter.Similarly,theyear-on-yearfallintotalelectricitydemandstoppedfromSeptemberonwardandrecoveredslightlyinNovemberandDecember,afterdeclinescomparedto2022hadbeenrecordedineverymonthuptothatpoint.MonthlyEUelectricitydemand,2021-2023(left),andaveragewholesaleelectricitypricesintheEuropeanUnionandtheUnitedStates,2019-2023(right),250350TWhUSD/MWh240300230250220200210150200100190501800JanFebMarAprMayJunJulAugSepOctNovDecJan-19Jul-19Jan-20Jul-20Jan-21Jul-21Jan-22Jul-22Jan-23Jul-23Jan-242021EUwholesaleelectricityprice(6MMA)2022weather-correcteddemandUSwholesaleelectricityprice(6MMA)2023weather-correcteddemandIEA.CCBY4.0.Notes:Inthechartontheleft,2022and2023demandisweather-correctedtothebaseyearof2021.Thismeanswhatdemandwouldhavebeenin2022and2023iftheweatherwasthesameasin2021.The2021demandprofilecorrespondstotherealisednetdemand.Inthechartontheright,theplottedaveragewholesalepricesare6-monthmovingaverages(6MMA).Source:IEAanalysisbasedondatafromEurostat(2023)andEIA(2023).Assumingenergypricesremainrelativelymoderateandtheeconomicoutlookimprovesovertheforecastperiod,weexpectelectricitydemandintheindustrysectortostartrecoveringgraduallyfrom2024onward.Nevertheless,somepermanentelectricitydemanddestructionhasalreadyoccurred,especiallyinenergy-intensivechemicalandprimarymetalindustries,andthereisstillsignificantuncertaintyabouthowmuchofthereductionsofthelasttwoyearswillbetemporaryorpermanent.TherearesignsofsomepermanentelectricitydemanddestructionOverall,productionoutputandconsequentlytheelectricitydemandoftheenergy-intensiveindustriessuchasaluminium,steel,paperandchemicalswerelowerin2023thaninthepreviousyear.Someproductioncurtailmentsannouncedbyenergy-intensiveindustriesfollowingthesharpclimbinpricesin2022weretemporary,asvariousfacilitiesrestartedandrampedupoperationswhenenergypricesstartedfallingin2023.However,manyotherplantsremainedshutdown.Restartingaclosedfacilityisgenerallycostly.Forexample,reopeninganPAGE22IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026aluminiumsmeltercancostuptoEUR400million(USD394million).Hence,itislikelysomeofthetemporaryshutdownstodatewillbefollowedbypermanentclosures.Thechemicalindustryhasbeenseverelyaffectedfromelevatedenergycosts,withtherisksofpermanentclosurescompoundedbyreducedcompetitivenessasChinadominatesgrowth.ProducerssuchasYara,Dow,INEOS,GrupaAzoty,amongmanyothers,curtailedproductionofchemicalproductssuchaspolyethylene,ammonia,urea,nitratesandNPK(nitrogen,phosphorus,andpotassium)fertilisers.LargechemicalproducerssuchasBASFshutdownplantsinpartduetohighenergycosts.Thisincludedtheclosureofcaprolactam,ammonia,cyclohexanol,cyclohexanone,sodaash,toluenediisocyanateandprecursorplantsatitsLudwigshafensite,aswellasfertiliserfacilities.Thesitehasanannualelectricityconsumptionofaround6TWh,andhasplanstoreducetheiremissionsby5%.Assumingasimilar5%reductioninenergyconsumption,thisamountsto0.3TWhofpermanentelectricitydemandreductions.Estimatedyear-on-yearchangesinindustrialoutputandelectricityconsumptioninselectedindustriesintheEuropeanUnionin2023TWh2020%IEA.CCBY4.0.1515%1010%55%00%-5-5%-10-10%-15-15%-20-20%Changeinelectricityconsumption(leftaxis)Percentchangeinindustrialoutput(rightaxis)IEA.CCBY4.0.Source:IEAanalysisbasedondatafromEurostat,Worldsteel,InternationalAluminiumInstituteandCEFIC.TheEuropeanprimarymetalindustrywashitespeciallyhardbysoaringelectricitypricesduetotheenergy-intensivenatureoftheproductionprocess.Forprimaryaluminium,forexample,electricitycostsgenerallymakeupabout40%ofthecostofproduction.Consideringtheongoingcurtailmentsandannouncedshutdownsuntilendof2023,ouranalysisshowsthelossinEUannualelectricitydemand,cumulatingtheclosuressince2020,tobeabout23TWhintheconsideredprimarymetalindustriesofaluminium,zinc,steel,andsilicon.PAGE23Electricity2024GlobaltrendsAnalysisandforecastto2026EstimatedcumulativelossinannualelectricitydemandinselectedprimarymetalindustriesintheEuropeanUnioncomparedto202024TWh201612840202220232021PrimaryAluminiumZincCrudeSteelSiliconIEA.CCBY4.0.Notes:Estimatesarebasedonannouncementsofpermanentandindefiniteplantclosures,andproductioncurtailments.Thenumbersaretobeinterpretedasthestructuraldemanddestructionduetoproductionlossescomparedtothereferenceperiod2020.Realisedchangesofdemandintheyearofclosurecandifferduetotheexacttimingoftheclosurewithinthatyear.Siliconelectricitydemandconsiderssiliconmetals,siliconmanganese,polysiliconandsilicon-basedalloys.Source:IEAanalysisofcompanydata,nationalstatisticsandnewsreports.Around30%ofEUprimaryaluminiumproductioncapacityhasbeensuspendedsince2021,withthecurtailmentsandclosuresaddinguptoalossofabout1.1Mtofannualproductioncapacitybytheendof2023.Thiscorrespondstoanestimatedlossofabout15TWhofannualelectricitydemand.In2023,severalcompaniesfollowedthetemporarycutsinproductionwithshutdowns.ThetemporarycurtailmentofSlovakia’sSlovalcoturnedintoapermanentshutdownin2023.Germany’sSpeira,havinghalveditsproductionin2022,andannouncedin2023thatitwillstopproductionatitsRheinwerk(Germany)smelter.Similarly,Slovenia’sTalumannouncedin2023thatitwillhaltprimaryaluminiumproduction,afterhavingreducedoutputto20%ofcapacityin2022.VariousotherproducersofprimaryaluminiumsuchasAlcoa,Aldel,Alro,andTrimetalsocutproduction.Someproducersalsorestartedproductionorareplanningtodoso.LibertyAluminiumrampeduptheproductionofprimaryaluminiumtofullcapacityintheirDunkirk(France)plantinearly2023,aftercuttingitby20%in2022.Alcoaannouncedthatitwillrestartoperationsin2024aftershuttingdownitsprimaryaluminiumproductioninSanCiprian(Spain)attheendof2021duetohighenergycosts.Anagreementwasreachedtorestartproductionthroughalong-termwindpowerpurchaseagreement(PPA)thatpowers75%ofitsproductioncapacity.ThereisalsoanobservabletrendinEuropetowardsshiftingoperationstorecycledaluminiumproduction,whichislessenergy-intensive.InApril2023,SpeiracompletedtheacquisitionofRealAlloyEurope,whichwasannouncedinPAGE24IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026February2022,doublingitsaluminiumrecyclingcapacitywiththeadditionof350kt.Romania’sAlroextendeditsaluminiumrecyclingcapacityfollowingthecommissioningofitsnewrecyclingfacilitywithanannualcapacityof60ktinSeptember2023.ThreezincsmeltingfactoriesshutdowninGermany,ItalyandtheNetherlands,equivalentto580ktofproductioncapacity,andtwoinBelgiumandFrancereducedproductionby50%each.Thesereductionsinzincproductioncorrespondtoanestimatedyearlyelectricitydemandlossofalmost4TWh.Shutdownsandproductionreductionsinsiliconandsilicon-basedalloysfromtheplantsofFerroglobeinSpainandFranceareestimatedtosimilarlyaccountforalossofannualelectricitydemandofalmost2TWh.Thesteelsectorlostalmost4Mtofcapacity,equivalenttoanestimated2TWhofelectricitydemand,withLechsteelworksshuttingdowncompletelyinGermanyandArcelorMittal'sblastfurnacesinFranceidling.Amidelevatedenergycosts,flexibleoperationisbecomingincreasinglymoreimportantforenergy-intensiveindustries.ArcelorMittalreactedtotheriseinelectricitycostsbytakingadvantageoftheflexibilityoftheirsystem;stoppingduringanelectricitypricepeakandresumingafterthepeakhadpassed.OtherproducerssuchasSalzgitterchosetocontinueoperationsatitssteelplantinPeineusingtheflexibilityoftheirfacilitiestoshiftproductiontolowercosthours,therebypartiallymitigatingtheadverseeffectsoftheincreasedenergycosts.Highenergypricesalsoposeachallengeforsmallandmedium-sizedcompaniesManylargeenergy-intensiveindustriesacrosstheEuropeanUnionareoftenexemptedfromvarioustaxesandfeesrelatedtoelectricityandarealsopartiallycompensatedfortheindirectcostsresultingfromtheEUEmissionsTradingSystem(EU-ETS).Bycontrast,smallandmedium-sizedindustriesgenerallyfacehigherelectricityprices.AsurveyinGermanyshowedthatduringthepeakofthecrisisin2022,manymedium-sizedcompaniesreportedhighenergycostsasanexistentialchallenge.TherateatwhichindustrialcompaniesintheEuropeanUnionaredeclaringbankruptcyshowedanincreasingtrendin2023.Whilenewindustry-relatedbusinessregistrationshavepostedsteadygrowthovertheperiodQ12022-Q22023,averaging4.4%perquarter,thenumberofindustrialbusinessesdeclaringbankruptcyincreasedatanevenhigherrateof10%overthesameperiod.Highenergycostsforsmallandmedium-sizedcompaniesareparticularlyproblematiciftheyarealsofacinginternationalcompetition,asrelativelyhigherEUenergycostsdecreasetheircompetitiveness.Asurveyconductedin2023bytheGermanChamberofIndustryandCommercefoundthatone-thirdofthePAGE25IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026country’scompaniesthatwereconsideringinvestingabroadcitedconcernsabouthighenergycostasadisadvantage.Forexample,themanufactureroftraditionalChristmassweetsLambertzisconsideringwithdrawingitsproductionoperationsinGermany,statingthatitsinternationalcustomersarereportedlyunabletoaccepttherisingprices.TheglassmanufacturerHeinz-Glass,whichsuppliesbottlesfortheinternationalperfumeindustry,hasrecentlyindefinitelypostponeditsplanstoincreaseproductioncapacities,citingconcernsoverhighenergycostinthefuture.Outsidetheenergy-intensivesectors,somesmallerbusinesseswerealsostronglyhitbysoaringenergybills,oftenwithoutthefinancialbufferthatlargecompaniestendtohave.Particularlyaffected,forexample,arebakeries,wherebusinessesscrambledtoadjustoperationsforenergysavingordecidedtofileforinsolvencyunderthepressureofrisingelectricityprices.Manycountries,suchasFrance,Germany,PolandandSpain,introducedmeasurestodampenthenegativeeffectonlocalbusinesses.OnaEuropeanlevel,emergencyinterventionsincludedarevenuecapofinframarginalproducersatEUR180/MWhandredistributionofexcessprofitsintheoil,gas,coalandrefinerysectors.EuropeanmetalandchemicalindustriesarelikelytoremainvulnerabletoenergypriceshocksThedegreeofvulnerabilityinenergy-intensivecommodityindustriesfromincreasingenergypricesvariessignificantly.Whilesomeindustriescantolerateelevatedenergycosts,othersectorsaremoredependentoncheapenergyinputs.Ouranalysisshowsthatchemicals,steel,andaluminiumaremoreexposedtoincreasingenergycost.Despiteenergypricesstabilisingin2023,themetalandchemicalindustriesremainvulnerable,withmarginsexpectedtostayatlowlevelsuntil2025.Whileotherindustriesmayhaveamorepositiveoutlook,increasinguncertaintyandexpectationsaboutfuturepriceincreasesmaystillnegativelyimpactbusinessconditionsforindustryinEurope.PAGE26IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026EstimatedquarterlynetvalueaddedofselectedindustriesinGermany,2021-202540%200%30%150%20%100%10%50%0%0%-10%-50%-20%-100%-30%-150%20212022202320242025Q1Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q220212022202320242025Q3Q4GlassandglasswareChemicalfeedstockQ1Cement,limeandgypsumQ2Pigiron,steelandferroalloysQ3AluminiumQ4PaperandcardboardQ1IEA.CCBY4.0.Q2Q3Notes:Chemicalfeedstockincludesbasicorganicandinorganicchemicals,fertilisersandnitrogenproducts,primaryQ4rubberandplastics,industrialgases,andpigmentsandcolourings.TheanalysisusesdataonGermanfirmsfrom2019toQ1calculatetheinitialprofitmargins,aggregatedbysector.TheseareextrapolatedusingEUROSTATindicesforproductionQ2volumeandproducerpriceindicesonasectorallevel.Assumingaconstantenergyintensityofproductionovertime,Q3historicalandfuturespricedataonenergycarriersareusedtosimulatethemarginsovertime.Consideringthepass-Q4throughofcostinthefuture,futurespricesoftheproducedcommodityareusedwhenavailable(i.e.forsteelandQ1aluminium).Theanalysisalsoexcludesex-postcompensationpayments,subsidiesoranyothergovernmentinterventions.Q2Pricesarecalculatedusinga3-monthmovingaverage.Q3Q4Source:IEAanalysisbasedondatafromEurostatandDestatis.IEA.CCBY4.0.HowmuchelectricitydoestheEuropeanUnionimportintheformofenergy-intensivegoods?Theissueofreducedproductionofenergy-intensivegoodsintheEuropeanUnionamidhighenergypriceshascontributedtoanincreaseinimportsinthesesectors,whichwasparticularlyobservablein2022.ThisraisesthequestionofhowmuchelectricityisnotconsumedintheEuropeanUnionbutisshiftedtootherregionsandimportedfromthereindirectlyintheformofenergy-intensivegoods.Ouranalysisshowsthatover160TWhofelectricity–correspondingto6%ofEUelectricitydemand–wasindirectlyimportedin2022intotheEuropeanUnionintheformofenergy-intensivegoodsmadeupbychemicals,primaryaluminium,crudesteel,paperpulp,andcement.Afteranestimated8%year-on-yearincreasein2022,2023isexpectedtorecordadeclineof4%inindirectimportsofelectricityintheformoftheenergy-intensivegoods,whichcanbeattributedtotheslowdowninEUmanufacturing,weakerdemandandoverhangofinventories.Nevertheless,2023importsarestillestimatedtobe4%higherthanthe2021levels.Thismeansthat,intheyears2022and2023combined,anadditional18TWhofelectricitywasimportedcomparedto2021levelsintheformofenergy-intensivegoodsconsideredinouranalysis,mostlyduetohigherprimaryaluminiumimports.PAGE27Electricity2024GlobaltrendsAnalysisandforecastto2026Indirectelectricityimportsintheformofenergy-intensivegoods(chemicals,primaryaluminium,crudesteel,paperpulp,andcement)totheEuropeanUnionbycountryoforigin,2019-2023180TWh150120906030020202021202220232019RussiaUkraineBrazilUnitedStatesChinaIndiaOtherEuropeRestofworldIEA.CCBY4.0.Notes:Theindirectelectricityimportsofselectedenergy-intensivegoodsincludechemicals,primaryaluminium,crudesteel,paperpulpandcement.Indirectelectricityimportsintheformofenergy-intensivegoodsareestimatedastheelectricityrequiredtomanufacturetheimportedproductintheEuropeanUnionbasedontheelectricityintensityofproductionvaluesintheEuropeanUnion.The2023valuesareestimatedbasedonQ1-Q32023dataandanalysisoflatestmarkettrends.Source:IEAanalysisbasedondatafromEUtradesince1999bySITCandEurostat(2023).Thelargestcumulativeincreasesinenergy-intensiveimportssince2021havebeeninprimaryaluminium.In2022and2023combined,therewasanadditional20TWhofindirectelectricityimports,comparedto2021levels.AroundhalfofthiscamefromhigherimportsfromIndia,whichwasfollowedbyUnitedArabEmirates.Chemicalswasanothersectorwhichsawgrowthinimportsin2022,withabout2TWhmoreindirectelectricityimportedcomparedto2021,mainlyfromtheUnitedStatesandChina.Buttheimportsofchemicalsdeclinedin2023amidslowereconomicactivity,morethanoffsettingthisincrease.Pulpandcementimportssimilarlysawincreasesin2022,butweremorethanoffsetbysignificantdeclinesin2023.Therehavebeenalsochangeswithrespecttowheretheseenergy-intensiveproductscamefrom.Forexample,inordertosubstitutethelossofcrudesteelimportsfromUkrainefollowingtheRussianinvasion,importsfromChina,Brazil,India,andothercountriesincreasedin2022.Sanction-hitRussiahasseenasharpdropinexportstotheEuropeanUnionintheenergy-intensiveindustries.TheshareofRussiaintheindirectelectricityimportsfromtheseenergy-intensivegoodsisestimatedtohavedecreasedfrom18%in2019and14%in2021,to9%in2023.Assanctionsenteredintoforcegraduallyoverthecourseof2023,RussiawasstilloneofthelargestsourcesofPAGE28IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026indirectelectricityimportstotheEuropeanUnionintheformofenergy-intensivegoodsin2023,largelyduetosubstantialamountsofsteelimports,followedbyprimaryaluminiumandchemicals.Estimatedindirectelectricityimportsintheformofenergy-intensivegoodstotheEuropeanUnionbysectorandcountryoforigin,20223060TWhTWh502520401530102051000RestofworldChemicalsPrimaryaluminiumCrudesteelPaperpulpCementIEA.CCBY4.0.Note:Indirectelectricityimportsintheformofenergy-intensivegoodsarecalculatedastheelectricityrequiredtomanufacturetheimportedproductintheEuropeanUnion,basedontheelectricityintensityofEUproductionvalues.Source:IEAanalysisbasedondatafromEurostat(2023),EUtradesince1999bySITC.Russia’sshareintheimportsoftheseenergy-intensivegoodsisexpectedtodecreasefurtherinthefuture,assanctionsarerigorouslyapplied.However,otherproductssuchasprimaryaluminiumarecurrentlynotsanctioned.Eventhoughtherearesanctionsonindividualaluminiumproducts,primaryaluminiumremainsunsanctionedsinceitisconsideredastrategicrawmaterialbytheEuropeanUnion.Additionally,RussianaluminiumisstillstronglyintegratedwithinEuropeansupplychains.However,therehavebeencallswithinEurope’saluminiumindustrygrouptolobbyforEUsanctionsonRussianaluminium.EUsanctionsonRussiarelatedtoenergy-intensivegoodsSectorDateofadoptionSanctionSteel15March2022TheEuropeanUnionadoptedCouncilRegulation(EU)2022/428imposinganimportbanonironandsteelproductsoriginatingfromRussia(flat-rolledproducts,bars,rods,wire,tubes,pipesetc.)23June2023AspartoftheeleventhEUsanctionspackage,importersofironandsteelmustprovethatinputsusedintheirgoodshavenotoriginatedinRussia.However,thesesanctionsareimplementedinphasescomingintoforceinSeptember2023.PAGE29IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026SectorDateofadoptionSanctionCement8April2022PaperImportsofcementfromRussiaarebannedaspartofafifthpulp6October2022setofeconomicandindividualsanctionsChemicals6October2022Plastics,paperandwoodpulpimportsfromRussiaarebannedaspartofaneighthsetofeconomicandindividualAluminium8April2022sanctions.18December2023Importsofchemicalproductssuchasbasicpetrochemicals,inorganicchemicals,intermediates,plastics,fertilisersandspecialtiesarenowbanned.Theseincludemethanol,phosphates,potash,NPK,nitrates,hydrochloricacid,nitricacid,phosphoricacid,sulfuricacidandothers.Importsofflat-rolledaluminiumproductsabove0.2mmsuchasplates,sheetsorstripfromRussiaarebannedaspartofthefifthsetofsanctions.AspartofthetwelfthEUsanctionspackage,importsofaluminiumwires,foil,tubesandpipesfromRussiawerebanned.CarbonpolicyandEUenergy-intensiveindustriesNexttooverallcompetitivenessinfluencedbyenergyprices,EUcarbonpolicywilladditionallyplayalargeroleindeterminingthefutureoftheenergy-intensiveindustriesinEurope.Relyingtoalargeextentonprice-basedpolicies,theEU-ETSwillsoonbeaccompaniedbyaCarbonBorderAdjustmentMechanism(CBAM)atthecentreofitsclimatepolicy.Allowancepriceshavebeenrisingoverthelastfewyears,exceedingEUR100/tCO2inFebruary2023forthefirsttime,beforefallingandaveragingaboutEUR85/tCO2inthesecondhalfoftheyear.Inaddition,progressingdecarbonisationwilleasetheburdenaccordinglyascompaniesinvestinreducingthecarbonintensityofproduction.OthercountriesoutsidetheEuropeanUnionhavesignificantlylowercarbonpricesand/orrelyonsubsidy-basedprogrammes(suchastheUnitedStateswiththeInflationReductionActof2022),orhavenoeffectivepoliciestargetingCO2emissions.Additionally,theEuropeanUnionusesarangeofmeasurestocounterpotentialnegativeeffectsonthecompetitivenessandcarbonleakageofindustry.Afterprovidingfreeallowancestoenergy-intensiveindustriesinthefirstyearsoftheEU-ETS,theCBAMwillbephasedin,pricingembeddedcarbononEUimportsforkeysectors,includingcement,aluminium,steelandfertilisers.Thiscanaidcompetitivenessinthedomesticmarketandshieldagainstimportpressure.However,EUfirmslargelyrelyingonexportswillstillneedtocompeteininternationalmarkets,whereotherfirmsmightfacelessstringentcarbonpricingpolicies.Partiallyaddressingthis,electricitycompensationschemesallowmemberstatestoprovidestateaidforalimitedtimeupuntil2030,tooffsetincreasesinelectricitycostassociatedwiththeEU-ETS(seethePriceschapterformoredetails.)PAGE30IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Globalelectricitydemandfromdatacentrescoulddoubletowards2026Weestimatethatdatacentres,cryptocurrencies,andartificialintelligence(AI)consumedabout460TWhofelectricityworldwidein2022,almost2%oftotalglobalelectricitydemand.Datacentresareacriticalpartoftheinfrastructurethatsupportsdigitalisationalongwiththeelectricityinfrastructurethatpowersthem.Theever-growingquantityofdigitaldatarequiresanexpansionandevolutionofdatacentrestoprocessandstoreit.Electricitydemandindatacentresismainlyfromtwoprocesses,withcomputingaccountingfor40%ofelectricitydemandofadatacentre.Coolingrequirementstoachievestableprocessingefficiencysimilarlymakesupaboutanother40%.Theremaining20%comesfromotherassociatedITequipment.Futuretrendsofthedatacentresectorarecomplextonavigate,astechnologicaladvancementsanddigitalservicesevolverapidly.Dependingonthepaceofdeployment,rangeofefficiencyimprovementsaswellasartificialintelligenceandcryptocurrencytrends,weexpectglobalelectricityconsumptionofdatacentres,cryptocurrenciesandartificialintelligencetorangebetween620-1050TWhin2026,withourbasecasefordemandatjustover800TWh–upfrom460TWhin2022.Thiscorrespondstoanadditional160TWhupto590TWhofelectricitydemandin2026comparedto2022,roughlyequivalenttoaddingatleastoneSwedenoratmostoneGermany.Globalelectricitydemandfromdatacentres,AI,andcryptocurrencies,2019-20261200TWh1000IEA.CCBY4.0.800600400200020202021202220232024202520262019LowcaseBasecaseHighcaseIEA.CCBY4.0.Notes:Includestraditionaldatacentres,dedicatedAIdatacentres,andcryptocurrencyconsumption;excludesdemandfromdatatransmissionnetworks.Thebasecasescenariohasbeenusedintheoverallforecastinthisreport.Lowandhighcasescenariosreflecttheuncertaintiesinthepaceofdeploymentandefficiencygainsamidfuturetechnologicaldevelopments.Sources:Joule(2023),deVries,ThegrowingenergyfootprintofAI;CCRIIndices(carbon-ratings.com);TheGuardian,UseofAItoreducedatacentreenergyuse;Motorsindatacentres;TheRoyalSociety,ThefutureofcomputingbeyondMoore’sLaw;IrelandCentralStatisticsOffice,DataCentreselectricityconsumption2022;andDanishEnergyAgency,Denmark’senergyandclimateoutlook2018.PAGE31Electricity2024GlobaltrendsAnalysisandforecastto2026DatacentresaresignificantdriversofelectricitydemandgrowthinmanyregionsTherearecurrentlymorethan8000datacentresglobally,withabout33%oftheselocatedintheUnitedStates,16%inEuropeandcloseto10%inChina.USdatacentreelectricityconsumptionisexpectedtogrowatarapidpaceinthecomingyears,increasingfromaround200TWhin2022(~4%ofUSelectricitydemand),toalmost260TWhin2026toaccountfor6%oftotalelectricitydemand.Growthwillbedrivenbyincreasedadoptionof5Gnetworksandcloud-basedservices,aswellascompetitivestatetaxincentives.China'sStateGridEnergyResearchInstituteexpectselectricitydemandinthecountry’sdatacentresectortodoubleto400TWhby2030,comparedto2020.WeforecastelectricityconsumptionfromdatacentresinChinatoreacharound300TWhby2026.Regulationsarebeingupdatedtopromotesustainablepracticesincurrentandfuturedatacentrestoalignthemwithdecarbonisationstrategies.Amajorsourceofdatacentregrowthisexpectedtocomefromtherapidexpansionof5GnetworksandtheInternetofThings(IoT).IntheEuropeanUnion,datacentreelectricityconsumptionisestimatedatslightlybelow100TWhin2022,almost4%oftotalEUelectricitydemand.Around1240datacentreswereoperatingwithinEuropein2022,withthemajorityconcentratedinthefinancialcentresofFrankfurt,London,Amsterdam,Paris,andDublin.Withasignificantnumberofadditionaldatacentresplanned,aswellasnewdeploymentsthatcanbeexpectedtoberealisedoverthecomingyears,weforecastthatelectricityconsumptioninthedatacentresectorintheEuropeanUnionwillreachalmost150TWhby2026.Almostone-thirdofelectricitydemandinIrelandisexpectedtocomefromdatacentresby2026InEurope,thedatacentremarketinIrelandisdevelopingrapidlyastheirelectricityconsumptiongrowsalongwithnewpoliciesandinitiatives.ElectricitydemandfromdatacentresinIrelandwas5.3TWhin2022,representing17%ofthecountry'stotalelectricityconsumed.Thatisequivalenttotheamountofelectricityconsumedbyurbanresidentialbuildings.Atthispace,Ireland’sdatacentresmaydoubletheirelectricityconsumptionby2026,andwithAIapplicationspenetratingthemarketatafastrate,weforecastthesectortoreachashareof32%ofthecountry’stotalelectricitydemandin2026.Ireland’sstockofdatacentres,currentlyat82,isexpectedtogrowby65%inthecomingyears,with14datacentresunderconstructionand40approvedtostartthebuildingphase.IrelandhasoneofthelowestcorporatetaxratesintheEuropeanUnion(12.5%),whichisanadvantageforthesector’sexpansioninthecountry.Bycontrast,EuropeanOECDcountries’averagecorporatetaxrateis21.5%.PAGE32IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Therapidexpansionofthedatacentresectorandtheelevatedelectricitydemandcanposechallengesfortheelectricitysystem.Tosafeguardthesystem’sstabilityandreliability,Ireland’sCommissionforRegulationofUtilitiespublishedinlate2021itsdecisiononthenewrequirementsapplicabletonewandongoingdatacentregridconnectionapplicationswiththreeassessmentcriteriatodetermineiftheconnectionoffercanbemade.First,thelocationofthedatacentrewithrespecttowhethertheyarewithinaconstrainedregionoftheelectricitysystem.Second,theabilityofthedatacentretobringonsitedispatchablegenerationand/orstorageequivalent,atleast,totheirdemand.Third,theabilityofthedatacentretoprovideflexibilityintheirdemandbyreducingitwhenrequestedbyasystemoperator.Forthethirdclause,datacentreoperatorsthatoffertheirserversforhirewillhavetoupdatetheircontractstoreflectthenewregulations.Theserequirementsshowcasethelocalgovernment’sinclinationtograntconnectionstothoseoperatorsthatcanmakeefficientuseofthegridandincorporaterenewableenergysourceswithaviewofdecarbonisationtargets.Estimateddatacentreelectricityconsumptionanditsshareintotalelectricitydemandinselectedregionsin2022and20263306%1842%TWhTWh1535%2755%2204%1228%1653%921%1102%614%551%37%0European0%00%UnitedStatesUnionChinaDenmarkIreland20222026Shareintotaldemand(rightaxis)IEA.CCBY4.0.Note:IncludestraditionaldatacentresanddedicatedAIdatacentres,excludesconsumptionfromcryptocurrenciesanddatatransmissionnetworks.Sources:IEA,DataCentresandDataTransmissionNetworks;LawrenceBerkeleyNationalLaboratory,UnitedStatedDataCenterEnergyUsageReport;IrelandCentralStatisticsOffice,DataCentresMeteredElectricityConsumption2022;DanishEnergyAgency,Denmark’sEnergyandClimateOutlook2018;China’sStateCouncil,Greendatacentresinfocus;EuropeanCommission,Energy-efficientCloudComputingTechnologiesandPoliciesforanEco-friendlyCloudMarket;Joule(2023),AlexdeVries,Thegrowingenergyfootprintofartificialintelligence;andCryptoCarbonRatingsInstitute,Indices.Denmarkcurrentlyhosts34datacentres,halfofthemlocatedinCopenhagen.AsinIreland,Denmark’stotalelectricitydemandisforecasttogrowmainlyduetothedatacentresector’sexpansion,whichisexpectedtoconsume6TWhby2026,reachingjustunder20%ofthecountry’selectricitydemand.Denmarkisthehubforanewpan-Europeaninitiative,NetZeroInnovationHubforDataCenters.ThePAGE33IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026huboffersaspaceforcollaborationbetweensuppliers,operatorsandgovernmentstoenableprogresstowardsthesector’sinnovationanddecarbonisationwhilemeetingincreasingregulatorydemands.DatacentresinNordiccountries–suchasSweden,Norway,andFinland–benefitfromlowerelectricitycosts.Thisisattributedtolowercoolingdemandduetotheircolderweather,andtolowerelectricitypricesincomparisontoothermajordatacentrehubs,suchasGermany,FranceandtheNetherlands.ThelargestactoramongstNordiccountriesisSweden,with60datacentres,andhalfoftheminStockholm.InAugust2023,plansforanuclear-powereddatacentrewereannouncedutilisingsmallmodularreactors(SMR)technologyontheeastcoastofSweden,withacommissioningdateenvisagedfor2030.Givendecarbonisationtargets,SwedenandNorwaymayfurtherincreasetheirparticipationinthedatacentremarketsincealmostalloftheirelectricityisgeneratedfromlow-carbonsources.IntheUnitedStates,thelargestdatacentrehubsarelocatedinCalifornia,TexasandVirginia.InthecaseofVirginia,theireconomywasdominatedin2021bythedatacentresectorexpansion,attracting62%ofallofthestate’snewinvestmentsandprovidingmorethan5000newjobs.NorthernVirginiaisthelargestdatacentremarketinthecountry,collectingUSD1billioninlocaltaxrevenuesperyear,withgrowthtrendinghigherascompanies,suchasAmazon’splannedUSD35billionexpansionby2040,continuetoincreasetheirinvestmentinthestate.Newlegislationisaimedattighteningregulationsondatacentredevelopments,includingzoningrules,mandatoryenvironmentandresourceimpactassessments,aswellasguidelinesonwaterusage.InUSnortheasternstates,theregionaltransmissionorganisationPJMexpectsdatacentrestoincreasinglydriveelectricitydemand,forecastingariseinsummerpeakloadfrom151GWin2024to178GWby2034.ArtificialintelligenceandcryptocurrenciesareadditionalsourcesofelectricitydemandgrowthMarkettrends,includingthefastincorporationofAIintosoftwareprogrammingacrossavarietyofsectors,increasetheoverallelectricitydemandofdatacentres.SearchtoolslikeGooglecouldseeatenfoldincreaseoftheirelectricitydemandinthecaseoffullyimplementingAIinit.WhencomparingtheaverageelectricitydemandofatypicalGooglesearch(0.3Whofelectricity)toOpenAI’sChatGPT(2.9Whperrequest),andconsidering9billionsearchesdaily,thiswouldrequirealmost10TWhofadditionalelectricityinayear.AIelectricitydemandcanbeforecastmorecomprehensivelybasedontheamountofAIserversthatareestimatedtobesoldinthefutureandtheirratedpower.TheAIservermarketiscurrentlydominatedbytechfirmNVIDIA,withanestimatedPAGE34IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto202695%marketshare.In2023,NVIDIAshipped100000unitsthatconsumeanaverageof7.3TWhofelectricityannually.By2026,theAIindustryisexpectedtohavegrownexponentiallytoconsumeatleasttentimesitsdemandin2023.Estimatedelectricitydemandfromtraditionaldatacentres,dedicatedAIdatacentresandcryptocurrencies,2022and2026,basecase1000TWh800600400200020262022TraditionaldatacentresCryptocurrenciesDedicatedAIdatacentresIEA.CCBY4.0.Note:Datacentreelectricitydemandexcludesconsumptionfromdatanetworkcentres.Sources:IEAforecastbasedondataandprojectionsfromDataCentresandDataTransmissionNetworks;Joule(2023),AlexdeVries,Thegrowingenergyfootprintofartificialintelligence;CryptoCarbonRatingsInstitute,Indices;IrelandCentralStatisticsOffice,DataCentresMeteredElectricityConsumption2022;andDanishEnergyAgency,Denmark’sEnergyandClimateOutlook2018.In2022,cryptocurrenciesconsumedabout110TWhofelectricity,accountingfor0.4%oftheglobalannualelectricitydemand,asmuchastheNetherland’stotalelectricityconsumption.Inourbasecase,weanticipatethattheelectricityconsumptionofcryptocurrencieswillincreasebymorethan40%,toaround160TWhby2026.Nevertheless,uncertaintiesremainforthepaceofaccelerationincryptocurrencyadoptionandtechnologyefficiencyimprovements.Ethereum,thesecondlargestcryptocurrencybymarketcap,reduceditselectricitydemandbyanamazing99%in2022bychangingitsminingmechanism.Bycontrast,Bitcoinisestimatedtohaveconsumed120TWhby2023,contributingtoatotalcryptocurrencyelectricitydemandof130TWh.Challengesinreducingelectricityconsumptionremain,asenergysavingscanbeoffsetbyincreasesinotherenergyconsumingoperations,suchasothercryptocurrencies,evenassomebecomemoreefficient.PAGE35IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026EfficiencyimprovementsandregulationswillbecrucialinrestrainingdatacentreenergyconsumptionTherevisedEnergyEfficiencyDirectivefromtheEuropeanCommissionincludesregulationsapplicabletotheEuropeandatacentresector,promotingmoretransparencyandaccountabilitytoenhanceelectricitydemandmanagement.Startingfrom2024,operatorshavemandatoryreportingobligationsfortheenergyuseandemissionsfromtheirdatacentres,andlarge-scaledatacentresarerequiredtohavewasteheatrecoveryapplications,whentechnicallyandeconomicallyfeasible,whilemeetingclimateneutralityby2030.AnearlierEUregulation,applicablesince2020,setsefficiencystandardsfordatacentresenablingbettercontrolovertheirenvironmentalimpact.Aself-regulatoryEuropeaninitiativecreatedin2021,calledtheClimateNeutralDataCentrePact,setstargetstoachieveclimateneutralityinthesectorby2030.Morethan60datacentreoperatorshavesignedontothepact,includinglargeoperatorslikeEquinix,DigitalRealtyandCyrusOne.IntheUnitedStates,theEnergyActof2020requiresthefederalgovernmenttoconductstudiesontheenergyandwateruseofdatacentres,tocreateapplicableenergyefficiencymetricsandgoodpracticesthatpromoteefficiency,alongwithpublicreportingofhistoricaldatacentreenergyandwaterusage.TheDepartmentofEnergy(DOE)issupportingthelocalproductionofsemiconductorsandisfundingthedevelopmentofmoreefficientsemiconductorsoverthenexttwodecades.Moreefficientsemiconductorsreducecoolingrequirements,thussupportingthedecarbonisationofthesector.Atastatelevel,regulatorsinVirginiaandOregonhavealreadyimposedrequirementsforbettersustainabilitypracticesandcarbonemissionsreductions.Chineseregulatorswillrequirealldatacentresacquiredbypublicorganisationstoimprovetheirenergyefficiencyandbeentirelypoweredbyrenewableenergyby2032,startingwitha5%sharemandateforrenewablesin2023.NewfieldsofresearchcanhelpincreaseefficiencyandreduceenergyconsumptionindatacentresTheprimarydriversofdatacentreelectricitydemandarethecoolingsystemsandtheserversthemselves,witheachtypicallyaccountingfor40%ofthetotalconsumption.Theremaining20%isconsumedbythepowersupplysystem,storagedevicesandcommunicationequipment.Theadoptionofhigh-efficiencycoolingsystemshasthepotentialtoreduceelectricitydemandindatacentresby10%.Othercoolingresearchshowsthata20%reductioninconsumptioncanbeachievedwhenoperatingwithdirect-to-chipwatercoolingandspecificlowviscousfluidstocoolallothercomponents.MachinelearningcanhelpreducethePAGE36IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026electricitydemandofserversbyoptimizingtheiradaptabilitytodifferentoperatingscenarios.GooglereportedusingitsDeepMindAItoreducetheelectricitydemandoftheirdatacentrecoolingsystemsby40%.Inthelongterm,replacingsupercomputerswithquantumcomputerscouldreduceelectricitydemandofthesectorifthetransitionissupportedbyefficientcoolingsystems.Quantumcomputersdelivermoreandfasterprocessingpowerthansupercomputerswhileconsuminglessenergy,buttheyneedtobecooledtotemperaturesnearabsolutezero(-273°C)whilesupercomputerscanoperateat21°C.Datacentresareevolvingtowardsmoresustainableandefficientoperations,includingtransitioningtoHyperscaleDataCentres,whichcanrunlarge-scaleoperationswithoutasignificantincreaseinelectricityconsumption.Thistransitionisalsofinanciallyattractive,withtheglobalmarketforHyperscaleDataCentresprojectedtodoubleinsizeby2026comparedto2023,reachingavalueofUSD212billion.Anotherpromisingfieldofresearchfordecarbonisingdatacentreoperationsinvolvestimeandlocationshiftingofelectricitydemand.Softwaredevelopmentscanallowoperatorstotemporarilyshiftpowerloadswithcarbon-awaremodelsthatrelocatedatacentreworkloadstoregionswithlowercarbonintensityatselectedtimes.Simultaneously,suchmethodologyhasshowntheprobabilityofincreasingtheoperationalaffordabilitybyreducingcostsofconsuminglow-emissionsenergyaroundtheclockbyupto34%.Resultsofthismethodologycombinedwithotherenergyefficiencymeasuresinplaceandon-sitelow-emissionenergyproductionhavedemonstratedthatdatacentrescanachievea64%shareofcarbon-freeenergyintheirtotalelectricityconsumption,accordingtoGoogle’s2023EnvironmentalReport.Risingself-consumptionindistributedsystemsanddatacollectionchallengesAspartoftheenergytransition,distributedgenerationhasbeenincreasinginmanypartsoftheworld.ThisismostnotablyreflectedinrisingrooftopsolarPVinstallationsandgrowingamountsofself-consumptionfrombehind-the-metersolarPV.By2022,self-consumptionfromdistributedsolarPVgenerationaccountedforabout2%oftotalelectricitydemandinItaly.IncountriessuchasGermany,Spain,BrazilandJapanthisshareisestimatedtobearound1%oftotalelectricitydemandin2022.However,anacceleratingtrendinSpainandBrazilcanbeobserved.PAGE37IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Estimatedelectricityself-consumptionindistributedsystemsanditsshareintotalelectricitydemandinselectedcountries,2019-2022TWh1510%128%96%64%32%020190%2020202120222019202020212022201920202021202220192020202120222019202020212022GermanySpainItalyBrazilJapanDistributedPVself-consumptioninTWh(leftaxis)Shareintotaldemand(rightaxis)IEA.CCBY4.0.Source:IEAestimatesbasedondataandinformationfromvarioussources;FederalNetworkAgency(Germany),Bundesnetzagentur;FederalMinistryofEconomicsandClimateProtection(Germany),BMWK;Strom-Report,PhotovoltaicinGermany;APPA(Spain),Self-consumptionyearlyreport;IEA,PhotovoltaicPowerSystemsProgramme;Terna,(Italy);EPE(Brazil),Braziliandistributedgeneration.Self-consumptionissettoincreaseasmoredistributedresourcesaredeployedinthecontextoftheenergytransition.Improvedavailabilityofdistributedgenerationandself-consumptiondatawillbeincreasinglyimportantforaccuratedemandforecasts,peakloadprojectionsandgridplanning.Dependingonhowself-consumptionisaccompaniedbydeploymentofdomesticstoragesystems,increasedrelianceonself-consumptioncanalsohaveabearingonflexibilityestimationsforsystembalancingoperations.Therefore,inadditiontoforecastsandplanning,acompletedatasetondistributedgenerationandconsumptioncangivevaluableinsightsintothepotentialforlocalflexibilitysolutionstomitigateintermittencychallengesinpowersystemsincreasinglybasedonrenewablegeneration.Improveddataexchangebetweendistributionsystemoperators(DSOs)andtransmissionsystemoperators(TSOs)cancontributetoamorecomprehensiveaccountingofself-consumption.Regardingindividualconsumptiondata,collecteddatamustbehandledwithacertaindegreeofconfidentiality.Dataprivacyprotectionpoliciesonthetopichavebeenimplementedandarecontinuouslyadaptedtoemergingchanges.However,thesepoliciesneedtobedesignedinsuchawaythattheydonotcreateanadditionalobstaclefordatautilisation.NewEUrulesadoptedinJune2023,forexample,enhancethisprocess.Theseamendmentsareaimedatimprovinginteroperabilitybetweencustomers,utilitiesandeligiblethirdpartiesthatwishtoaccesssmartmeteringdatawhileprotectingPAGE38IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026consumers.Thenewrulesallowstakeholderstoaccesshistoricalsmartmeterdatafrom2019onwards,includingnear-real-timedata.Smartmeterroll-outonthewayforimproveddatacollectionGlobalsmartmeterinvestmentsdoubledin2022comparedto2015,withthenumberofsmartmetersexceeding1billionworldwide.Chinaaccountsformorethanhalfofthetotalfigure,followedbytheEuropeanUnionwith16%andtheUnitedStateswithashareof13%.Smartmeterpenetrationvariessignificantlyamongcountriesandregions,withusein80%ofUShouseholds.Anestimated70%EUconsumershaveasmartmeter,andthisshareisexpectedtoriseto77%by2024.InLatinAmerica,approximately10%ofelectricityconsumershavesmartmeters,with70%ofthisshareinBrazilandMexico.Indiaaimstoreplace250millionconventionalmetersby2026andcountscloseto8millionsmartmetersasof2023.Laggedsmart-meterrolloutinseveralregionshasbeenexperiencedduetobudgetconstraints,complexprocedures,andageneralconsumerconcernondataprivacy.Smartmetersnotonlyenablebetterandmoredetaileddatacollection,whichcanbeusedforanimprovedassessmentofself-consumption,amongotherthings,butcanalsoenableconsiderablecostsavings.Forexample,in2018alone,withaninstallationcostofEUR180-200,smartmetersintheEuropeanUnionhavereportedlyallowedyearlysavingsofEUR280permeteringpointonaverageamongthememberstates,whicharebasedondirectandindirectbenefitsforconsumers.Directconsumerbenefitsderivefromanobservedbehaviouralchangeinenergyconsumptiontriggeredbytheawarenessofthegranulardatafromsmartmeters.Additionally,timelyinformationaboutdynamictariffsmotivatesconsumerstoshifttheirenergyconsumptiontotimeswhenismosteconomicallyconvenient.Indirectbenefitsareenabledbyanimprovementontheutility’soperations,forexample,byremotemanagementofthemeteringsystem.PAGE39IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Supply:Cleanelectricitytomeetalladditionaldemandoutto2026Renewablesovertakecoalasthelargestsourceofglobalelectricitysupplyin2025Ourforecastperiodoutto2026ischaracterisedbythreeturningpointswithregardtolow-carbonelectricitysources.First,renewablesareexpectedtogeneratemorethanone-thirdofworld’selectricityin2025,overtakingcoalasthelargestsourceofsupply.Second,low-carbonsources–renewablesandnucleartogether–areexpectedtoaccountfor46%oftheworld’selectricitygenerationbytheendof2026,rapidlyapproachingthehalfwaymark,upfrom39%in2023.Andfinally,onaglobalscale,low-carbongenerationissettomeetalltheadditionaldemandgrowthtowards2026.In2023,growthinrenewablepowergenerationwasrelativelysubdued,recordinganincreaseof5%comparedto8%in2022,andwasbelowthe2016-2022averageof6.5%.Thiswaspredominantlyduetolowhydropoweroutputinvariousregionsduetodroughts,especiallyinChina.Assumingthereturntonormalhydropowerconditions,weexpectstrongeryear-on-yeargainsinrenewablegeneration,witha14%surgein2024overthedrought-stricken2023,followedbyanannualaverageof9%in2025-2026.Changesinglobalelectricitygeneration,2022-202633000TWh2022-+2023-+202632500CoalGasNuclearRenewablesIEA.CCBY4.0.32000IEA.CCBY4.0.31500310003050030000295002900028500Othernon-renewablesNote:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.PAGE40Electricity2024GlobaltrendsAnalysisandforecastto2026Globalnucleargenerationisexpectedtoreachanewhistoricalhighin2025,exceedingtheprevious2021record.Afterrisingby2.7%in2023,weforecastnucleargenerationtogrowonaveragebyabout3%overtheperiod2024-2026.ThisissupportedbythecontinuedrecoveryinFrenchnuclearoutput,restartsinJapan,andnewplantscomingonlineinmanypartsoftheworld,halfoftheminChinaandIndiaalone.Year-on-yearglobalchangeinelectricitygenerationbysource,2019-2026TWh200015001000201920202021202220232024202520265000-500-1000CoalGasNuclearOthernon-renewablesRenewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.Overtheforecastperiod,coal’sshareinglobalelectricitygenerationissettodroptobelowone-thirdfrom36%in2023,markinganothersignificantmilestone.Coal-firedgenerationisexpectedtohavepeakedin2023,with1.6%year-on-yeargrowth,afterwhichitissettopostadeclineof3%in2024,assumingarecoveryinhydropowergenerationfromthedrought-inducedlowlevelsof2023.Thisisforecasttobefollowedbyaslowstructuraldeclineofaround1%onaveragein2025-2026undernormalweatherconditions.Bycontrast,followinganincreaseof0.5%in2023,globalgas-firedgenerationisexpectedtocontinuetoriseatanaverageannualgrowthrateoflessthan1%outto2026.Thiswillbesupportedbycoal-to-gasswitchinginvariousregions,withadditionalLNGsupplybecomingavailablefrom2025onward.Ascleanelectricitysupplycontinuestoexpandrapidly,theshareoffossilfuelsinglobalgenerationisforecasttocontractfrom61%in2023to54%in2026.Thisisthefirsttimefossilshareinelectricitygenerationwilldipbelow60%anddeclineatapaceneverseenbeforeaccordingtotheIEArecordsdatingbackmorethanfivedecades.PAGE41IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Evolutionofthesharesoflow-emissionssourcesvs.fossilfuelsinglobalelectricitygeneration(left),andtheannualchangeoffossilfuelshare(right),1975-2026100%3%90%2%80%1%70%0%60%-1%50%-2%40%30%-3%20%-4%10%-5%0%-6%197519781981198419871990199319961999200220052008201120142017202020232026197519781981198419871990199319961999200220052008201120142017202020232026Shareofrenewables&nuclearAnnualchangeoffossilfuelshareShareoffossilfuelsTrendIEA.CCBY4.0.CoalconstrainedbyrenewablesinChina,butnotinotherpartsofAsiaAshighlightedinIEA’sRenewables2023report,Chinacommissionedin2023asmuchsolarPVcapacityastheentireworlddidin2022,whileitswindpowercapacityadditionsalsogrewby66%year-on-year.Thestrongexpansiontrendofrenewablesisexpectedtoresultinrenewablegenerationgrowingbyaround20%in2024,assumingarecoveryinhydropower,and13%onaveragein2025-2026,coveringalltheadditionalChinesedemandgrowthandsuppressingcoal-firedoutput.Itshouldbenotedthattheweatherimpact,suchasthereducedhydropowerduetodroughtsasobservedinrecentyears,cancauseanuptickinChinesecoal-firedgenerationinindividualyears.However,theoveralltrendofcoal-firedsupplybeingrestrainedandreplacedbystronggrowthinrenewableenergysources(RES)isexpectedtoremainlargelystable.GivenIndia’srapidincreaseindemandforelectricity,coal-firedpowergenerationisexpectedtorisebyanaverage2.5%annuallyin2024-2026.Atthesametime,renewablegenerationwillaccelerate,withanaverageannualgrowthrateof13%overtheperiod.SoutheastAsiaisanotherregionwithnewcoal-firedcapacitiescomingonlineamidsignificantdemandgrowth.Coal-firedgenerationissettoincreaseeachyearonaverageabout4%outto2026.Renewablesareexpectedtogrowatahigheraverage7%rateandgas-firedoutputatabout5%PAGE42IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026InJapan,coal-firedgenerationisexpectedtodeclineannuallyonaverageby3%andinKoreaby3%overouroutlookperiodamidincreasednuclearandrenewablegeneration.InotherpartsofAsia,suchasBangladeshandPakistan,newcoalplantsarecomingonline,withcoal-firedgenerationforecasttorecordaverageannualgrowthratesof18%and6%,respectively,from2024to2026.Year-on-yearchangeinelectricitygenerationbysourceinAsia,2021-20261000200TWhTWh160800600120400802004000-200-40202120222023202420252026202120222023202420252026202120222023202420252026ChinaIndiaSoutheastAsiaOthernon-renewablesNetchangeCoalGasNuclearRenewablesIEA.CCBY4.0.Note:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.PAGE43IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Spotlight:Nucleargenerationwillreachanewrecordhighby2025Between2024and2026,anadditional29GWofnewnuclearcapacityisexpectedtocomeonlineglobally,morethanhalfoftheminChinaandIndia.Withnewplantsstartingcommercialoperationinvariousregions,aswellasFrenchnuclearrecoveryandexpectedrestartsinJapan,weforecastglobalnucleargenerationwillbealmost10%higherin2026comparedto2023.In2025,globalelectricitygenerationfromnuclearenergywillhaveexceededitspreviousrecordlevelin2021.In2022and2023manycountriesplacedthephasinginorexpansionofnuclearpoweratthecentreoftheirstrategiestoreachclimatepolicyobjectives,sparkingasignificantrevivalofglobalinterestinnuclearenergy.TheIEA’supdatedNetZeroRoadmapshowsnuclearenergymorethandoublingby2050,complementingrenewabledeployment,andeasingthepressureoncriticalmineralsupply.WithaminorityofEuropeancountriescurrentlyplanningtophaseoutnuclearenergy,manyemergingandanumberofadvancedeconomiesareplanningtophaseinorexpandnuclearenergygeneration.Basedonthenumberofnuclearpowerplantsthatarecurrentlyunderconstructionandnewonesthatarebeingplanned,thegrowthinnuclearpowerissofarmainlyinAsia.Evolutionofnuclearpowergenerationbyregion,1972-2026Forecast3500TWh3000IEA.CCBY4.0.250020001500100050001972197519781981198419871999200220052008201120142017202020232026EuropeanUnionUnitedStatesOtherIndiaOtherAsiaChinaIEA.CCBY4.0Note:The2026forecastisbasedonprojectscurrentlyunderconstructionandexpectedtobeoperationalbytheendoftheperiod.AtCOP28,over20countriessignedajointdeclarationtotriplenuclearpowercapacityby2050.Globally,thatwouldmeananadditionof740GWofnuclearPAGE44Electricity2024GlobaltrendsAnalysisandforecastto2026capacitytothecurrentstockof370GW.TheWorldNuclearAssociationestimatesthat,asofNovember2023,68GWwasunderconstruction,withafurther109GWcurrentlyplannedand353GWproposed.Inadditiontothereactorscurrentlyunderconstruction,evenifalltheseplannedandproposedprojectsarerealised,reachingthegoalofthedeclarationwouldrequireanadditional210GWtoreachtheannouncedobjectiveby2050.Nuclearpowercapacityunderconstruction,plannedorproposedasofNovember2023GW270240210IndiaRussiaEuropeanUnitedJapanUnitedRestof180UnionKingdomStatesworld1501209060300ChinaUnderconstructionPlannedProposedIEA.CCBY4.0Notes:WeusethedefinitionsemployedbytheWorldNuclearAssociation.Plannedprojectsincludeonesthatareapproved,andfundingiscommittedandavailable.Thetimingforcommencementofoperationisconsideredlikelywithin15years.Proposedprojectsincludethosewherethesiteandscalearespecified,butthetimingandapprovalremainsuncertain.Source:IEAanalysisbasedondatafromWorldNuclearAssociation.AsiaremainstheepicentreofgrowthinnuclearpowerAsia’sshareinglobalnucleargenerationisexpectedtoreach30%in2026.Basedonreactorsunderconstructionwithexpectedcompletionupuntil2026,AsiaissettosurpassNorthAmericaastheregionwiththelargestinstalledcapacity.NuclearpowerhasseenparticularlystronggrowthinChinaoverthelastdecade,withcapacityadditionsofabout37GW.ThishasresultedinChina’sshareofglobalnucleargenerationrisingfrom5%in2014toabout16%in2023.Chinacontinuestoleadinglobalnuclearcapacityadditions,with27GWcurrentlyunderconstruction.Inits14thFive-YearPlan,Chinaisaimingfortotalinstalledcapacityof70GWby2025.Thecountry’slong-termcommitmenttonuclearpowerisfurtherevidencedbyitsstrategytobecomeincreasinglyself-reliantforitsfuelcycle.Currently,Chinarunsdomesticminingoperationswiththecapacitytocoveraround15%ofitsyearlyuraniumdemand.Havingannouncedlargedomesticresourcesof107ktofuranium,Chinaaimstosourceone-thirdofitsuraniumthroughdomesticresourcesandequitystakesinminingoperationsinAfrica.PAGE45IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Giventhesedevelopments,technologicalleadershipinnuclearpowerisshiftingtowardsChinaandRussia.Thetechnologyprovidersfor70%ofthereactorscurrentlyunderconstructionwereChinaandRussia.Inaddition,Chinastartedcommercialoperationofitsfirstfourth-generationreactorattheShidaowanplantinDecember2023,a200MWunitwithahigh-temperaturegas-cooledreactorusingamodulardesign.Thereareultimatelytensimilarunitsplannedatthesite.Technologyprovidersofcurrentlyoperationalreactors(left)andofreactorsthatarecurrentlyunderconstructionorinplanning(right)Numberofreactors450180400160350140Planned30012025010020015080100604050200Operational0UnderconstructionChinaRussiaIndiaKoreaFranceUnitedStatesJapanOtherIEA.CCBY4.0Notes:OperationalreactorsinthisfigurealsoincludethesuspendedreactorsinJapan.Plannedreactorsincludeprojectsthatareapproved,andfundingiscommittedandavailable.Source:IEAanalysisbasedonin-houseresearchanddatafromIAEAPRISdatabase(accessedJanuary2024).ContributingtolargecapacityadditionsinAsia,Indiaannouncedin2022planstotripleitsnuclearcapacityby2032,whichcorrespondstocapacityadditionsofalmost13GW,with6GWcurrentlyunderconstruction.Bangladesh,withstrongfinancialandtechnicalsupportfromRussia,currentlyhasitsfirstnuclearpowerplantunderconstructionattheRooppursite,whereitrecentlyreceiveditsfirstfuelshipmentandisofficiallyscheduledtobegincommercialoperationsin2024.JapanissettocontinueitsrevivalofnuclearenergyaspublicopinionstartstofavourtherestartofnuclearreactorsforthefirsttimesincetheFukushimaincident.Thecurrentplansindicateasteadyincreaseinoperatingcapacitythrough2024-2026,andtheeventualgoalfornucleartoaccountfor20%oftheenergymixby2030.Specifically,theShimaneUnit2reactorisplannedtorestartinAugust2024,whilethetargettocompletenecessarysafetyadjustmentsattheOnagawaUnit2isalsosetfor2024.Furtherrestarts,suchasTokai2andShika2,scheduledfor2025and2026,havebeendelayedbutremainontheagendaasacentralpillarofJapan’sstrategytomeetitsemissionreductiontargets.PAGE46IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026RenewedinterestinnuclearinEuropeandAmericas,butsignificantdelaysinongoingprojectsraiseconcernsInEurope,thepoliticallandscapeforthedeploymentofnuclearpowerisevolving.Germanyhasphasedoutitsnuclearcapacities,andSpainisstillaimingforaphaseoutstartingin2027.ElevenmemberstatesintheEuropeanUnionlaunchedanallianceinFebruary2023toco-operateonnuclearenergyundertheleadershipofFrance,whichgrewto14membersbyitsthirdmeetinginMay2023.Thegoaloftheallianceistoadd50GWofnuclearcapacityby2050,whichmeansa50%increaseintheinstallednuclearpowercapacityintheEuropeanUnion.ThealliancealsoaimsfornucleartobetreatedequallytorenewablesinEUenergyandclimatepolicies.Inlinewiththat,inDecember2023,theEUCouncilfollowedtheEuropeanParliamentinvotingtoincludenuclearenergyasastrategicelementtoreachclimateneutrality.In2022,FranceannouncedplanstoconstructsixnewEuropeanPressurisedReactors(EPR).BeforetheparliamentdebateonnewenergystrategyinJanuary2024,theFrenchEnergyMinisterreaffirmedplanstopursueanadditionaleightreactorswithacombinedcapacityof13GW,plannedforconstructionafter2026.Inparallel,itisproceedingwithalarge-scaleefforttoextendtheoperationsofitsexistingfleet,whoseaveragelifetimeis37years.TheNetherlands,rescindinganearlierphase-outdecision,declarednuclearenergyascriticalforitsclimatepolicytargetsandannouncedin2023thatitstartednegotiationsfortheconstructionoftwonewreactorsby2035.Thenewreactorsareintendedtomeet10%ofDutchelectricitydemand.Swedenalsoadoptedanewregulationin2023toallowtheconstructionofadditionalnuclearpowerplants.TheSwedishgovernmentconfirmeditscommitmenttonuclearpowerwhenitannouncedplansinNovember2023fortheconstructionoftwonewconventionalreactorsby2035andtennewreactors,includingSMRs,by2045.Inaddition,Sweden’sparliamentpassedadditionallegislationthatallows,inprinciple,formorereactorsthanthetenreactorsslatedtobebuiltby2045.Whilenotannouncinganynewcapacityadditions,Belgiumhasstatedthatadealhasbeenreachedfortheplannedlifetimeextensionbytenyearsofitstwonewestreactors,Doel4andTihange3.Withacombinedcapacityof2GW,theyaccountfor35%ofBelgium’scurrentnuclearcapacity.Inaddition,Finlandin2023announcedalife-timeextensionofitsLoviisapowerplant,andstartedcommercialoperationsofitslargestreactorOlkiluoto3.Sloveniaannouncedanadditional20yearsofoperationfortheexistingreactorattheKrškoNuclearStationandreaffirmeditscommitmenttoaddasecondblock.Bulgariaisimplementingitsnewnuclearstrategywithplanstoaddfournewreactorsby2053withtheconstructionof2.3GWadditionalcapacityatitsKozloduysite.Polandhasmadefurtherstepsinimplementingitsnuclearprogrammewithaneventualcapacitygoalof69GWby2040.ThepermitfortheconstructionofitsfirstnuclearPAGE47IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026plantinPomeraniawasgrantedinJuly2023,andconstructionissettostartin2026.ThesecondreactorrecentlygainedapprovalinNovember2023,wheretwounitsareexpectedtosupply22TWhannuallyfrom2035onwards.UkrainecontinuesitseffortstoexpanditsnuclearcapacitywithoutrelianceonRussia.InJune2022,UkrainianenergyproviderEnergoatomsignedanagreementtoextendthenumberofplannedreactorsprovidedbyWestinghousefromfivetonine.Further,inJanuary2023,theCabinetapprovedplansforconstructionoftwonewreactors,Khmelnitsky5and6,whichareexpectedtobeconnectedtothegridby2030and2032,respectively.PolicyagendasonnuclearenergyofselectedcountriesPhaseinFirstconsiderationsPhaseoutBangladesh,Egypt,Poland,Albania,Algeria,Azerbaijan,Denmark,Belgium(afterlifetimeTürkiye,UgandaEstonia,Ethiopia,Ghana,Indonesia,extensionoftworeactorsJordan,Kazakhstan,Kenya,Laos,Latvia,intheexistingfleet),Lithuania,Morocco,Nigeria,Philippines,Germany,SpainRwanda,SaudiArabia,Serbia,SriLanka,Sudan,Thailand,UzbekistanExpansionKeepingsteadyBrazil,Bulgaria,Canada,China,Czechia,Hungary,India,Belarus,Canada,Finland,France,Iran,Japan,theNetherlands,Pakistan,Romania,Russia,Slovakia,SwitzerlandSlovenia,Korea,Sweden,UAE,Ukraine,UnitedKingdom,ArgentinaIEA.CCBY4.0Sources:WorldNuclearAssociationandnewsreports.IntheUnitedStates,reactorswith37GWofcapacityinitiallyhadoperatinglicenceswhichwillexpirebetween2030and2040.Underthesubsequentlicencerenewalprogramme,theNuclearRegulatoryCommissioniscurrentlyconsideringlifetimeextensionsforoperatingreactorsfrom60to80years.Around6GWofcapacityextensionshavealreadybeenapproved,withanother10GWunderrevieworexpectedtoapply.Still,afurther21GWofnuclearcapacity,accountingforalmost23%ofthecapacityinoperation,is,asofnow,expectedtosuspendoperationsbetween2030and2040.ThereplacementofthiscapacitywillbeamajorchallengefortheUSnuclearsector.Anestimated17GWofcapacityiscurrentlyplannedorproposed.However,only2.5GWattheTurkeyPointsiteinFlorida,includingthenewreactorsUnits6and7,areestimatedbytheWorldNuclearAssociationtostartcommercialoperationsbefore2030,comparedtoscheduledretirementsof6.5GW.Citingsecurityofsupplyconcernsduringextremeweatherevents,California’sutilitiesregulatorhasgrantedafive-yearextensiontotheDiabloCanyonPowerplantwithacapacity2.3GWinDecember2023,withthenewlicensesnowrunningto2029and2030forthetworeactors.PAGE48IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026InCanada,1.2GWofcapacityisplannedtocomeonlineby2036attheDarlingtonsite.Inaddition,theprovinceofOntariohasannouncedplanstostartpre-developmentfortheadditionof4.8GWofcapacity.AmajorconstructionprojectinSouthAmericaisongoinginBrazil,wheretheextensionoftheANGRAsiteisdelayedbyalmostfouryears,nowscheduledfor2027afterinitialplansforcommercialreadinessby2023.ArgentinaplanstoaddareactortoitsAtuchasiteinco-operationwithChina.ConstructionriskofnuclearprojectsremainsthelargesthurdleforfinancingGlobally,nuclearconstructionprojectsthatstartedbetween2010and2020hadanaveragedelayofaroundthreeyears,whichamountedtoanadditional50%increaseontopoftheinitiallyplannedconstructiontime.Chinahadanaveragedelayofjustovertwoyears,whiletheglobalaverage,excludingChineseprojects,isthreeandahalfyears,withsomeprojectsuptoeightyearsbehindschedule.Whiletheissueofdelaysinconstructioniscurrentlyamajorglobalconcern,thedelaysinEuropeandtheUnitedStatesexceedwhatisobservedinotherpartsoftheworld,withChinaespeciallypostingsignificantlyfewerdelays.ThefirstreactorofthenewestUSnuclearpowerplant,Vogtle3,wentintocommercialoperationin2023,withthesecondVogtle4unitexpectedtofollowinearly2024.Theplantconstructiontooktwiceaslongasexpected.Afterconstructioncommencedin2009,thetwounitswereinitiallyscheduledtostartoperationsin2016and2017.However,withVogtle-3onlyconnectedtothegridinlate2023andVogtle-4nowscheduledforearly2024,theconstructiontook14yearstocomplete,doubletheinitialtimeframe,resultinginacostovershootofUSD17billionofaninitialbudgetofUSD14billion.France’snewestreactorinFlamanville,nowscheduledtodeliveritsfirstelectricityin2024,wasinitiallyplannedtobefinishedin2016,andbasedonthemostrecentcostestimatesitisnowmorethanquadrupletheinitialbudget.InHinkleyPointC,ajointprojectbetweentheFrenchEDFandChineseCGN,theChinesefirmannouncedafreezeinpaymentsinDecember2023aftercostoverrunsreachedalevelthatallowedtheChinesefirmtorefuseparticipationintheadditionalcost.EDFaffirmedtheprojectwillbecompletednonetheless,takingonthefinancialburden.Throughcuttingconstructiontimesanddelays,andwiththeextensiveexperienceoftheconstructionofmultipleplantsinrecentyears,ChinaisabletobuildnuclearpowerplantsatsignificantlylowercostandwithminimaldelayscomparedtotheUnitedStatesandtheEuropeanUnion.PAGE49IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Averageplannedvs.realizedconstructiontimeofnuclearpowerprojectswithconstructionstartsafter2007inselectedregions15Years1050IndiaEuropeNorthAmericaOtherAsiaRestofworldChinaOriginallyplannedRealisedIEA.CCBY4.0.Notes:Realisedcountstheyearwhentheplantwentonline.Weincludethemostrecentestimatesofexpectedgridconnectionforongoingprojectsthatstartedbefore2020.TheprojectsstillongoingthathavedelaysincludeCarem25,Rooppur-1,Rooppur-2,Angra-3,Fangchenggang-4,Zhangzhou-1,Zhangzhou-2,Flamanville-3,HinkleyPointC-1,HinkleyPointC-2,Kakrapar-4,Rajasthan-7,Rajasthan-8,Ohma,Akkuyu-1,Akkuyu-2.Source:IEAanalysisoftheindividualnuclearpowerprojects.Thefinancingofnuclearprojectsinvolveshighupfrontcapitalcosts,whichamortiseoverlong-timeperiods.Thismeansthattheprofitabilityofaprojectishighlysensitivetoconstructionrisksandthecostofcapital.Withhigherinterestrates,constructiondelayscanbecomeevenmorecostlythroughtheincreasedvalueoftime.Thebulkoftheriskisassociatedwiththeconstructionphase.Onceanuclearpowerplantiscommissioned,thesteadysaleofelectricityandthelowshareoffuelcostintotalcostsmakeitalow-riskasset,althoughsomerisksinrelationtotechnicalissuesandmaintenance,andastablefuelsupplyremain.However,duringtheconstructionphase,technicalissues,shortagesofqualifiedstaff,supply-chaindisruptionsorcomplexinteractionswithregulatorscansignificantlylengthenconstructiontimesandescalatecost.Thoseinstancescouldparticularlyraisetheriskofinteriminterestpaymentsdueduringtheconstructionphase,whichcanjeopardizethefinancialviabilityofanongoingproject.Reducingconstructionriskcansignificantlybringdownthecostofcapital,whichareamajorcostfactorfornuclearprojects.Whileconstructionriskisinherentinallcapital-intensiveprojects,therearebestpracticesforprojectownerstominimisetheirexposure.Mostimportantly,completeandcomprehensivedesignandplanningshouldbecompletedbeforeanyconstructionbegins.Further,highstandardsfordocumentationaswellasintegratedplanningofinterconnecteddependenciesareessential.Structuralfactors,suchassupply-chaindisruptionsandskilledlabourshortagesneedtobeconsidered,andtheirpotentialimpactsplannedfor.PoolingdemandinaconsortiumtoensurefuturerevenuestreamsPAGE50IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026throughcommittedorderbooks,aswellasstandardisingprojects,canfurtherbringdownrisk,securesupplychaindevelopmentsandfacilitatelearningcurves.StateinvolvementasapotentialoptiontohelpreducethecostofcapitalInadditiontoreducingconstructionrisk,improvingfinancingconditionswillbeimportantforthedeploymentofnuclearcapacities.Whereaswell-structuredprojectswithcreditworthyoperatorsareamust,additionalmeasurescanbeemployedtomanagethecostofcapital.Especiallyinthecaseofincompletefinancialmarkets,governmentinterventionssuchascontractsfordifference(CFDs),guaranteesormarketdesignmeasurescanbeeconomicallyjustified.However,theriskofover-subsidisingnuclearenergythroughthesegovernment-backedinstrumentscanalsobeaconcern.Inpractice,financingissueshavebeenaddressedinvariousways.Onemajorapproachisthroughtheinvolvementofstateactors.Projectscanbedirectlyfundedthroughstatefinancing,whichishowamajorityofnuclearprojectsarefinanced,forinstance,inChina.Indiaonlyrecentlyconsideredallowingprivateminoritystakesinnuclearoperations,withalloperatingplantsfinancedthroughgovernmentfunds.Governmentscanalsostepinasguarantorstobringdowncapitalcost,whichwasthestatedobjectiveoftheUSgovernmentwhenprovidingguaranteesforthefinancingofVogtle3and4.Similarly,Sweden,inlightofitsannouncementstoexpanditsnuclearcapacity,hasalreadyofferedloanguaranteesfortheconstructionofthenewlyplannednuclearsites.Stateactorsinterestedinsellingtechnologycanalsoprovidevendorfinancing,asdonebyRussiafortheconstructionofRooppurnuclearreactorinBangladeshortheEl-DabaaplantinEgypt,wherethecountrybothsolditstechnologyandprovidedfinancinginstruments.PublicsupportbyratepayersandtheBritishgovernmenthasrecentlybeenintroducedintheUnitedKingdom,wheretheRegulatedAssetBasemodel,originallyintendedforotherpartsofinfrastructure,allowsnuclearoperatorstoreduceupfrontcapitalrequirements,whicharedividedamongthedifferentstepsandrevenueisalreadygeneratedduringtheconstructionphase.Thishelpstocoverpartsofthecapitalrequirementthroughapplyingsurchargestoelectricityconsumersupfronttofundplanningandconstructionphasesinrealtime.AnadditionalUKgovernmentsupportpackage(GSP)wouldbetriggeredifconstructioncostoverrunsexceedacertainlevel.Byprovidingstableframeworksfortheenergysectoringeneralandelectricitymarketdesigninparticular,governmentscanremovepartsoftheoperatingriskexposureofnuclearpowerplants.Whilenotremovingtheconstructionriskasthelargestsourceofuncertainty,instrumentsstabilisingrevenueexpectations,backedbystateactors,canfurtherhelpreducecostofcapital.TypicalmeasuresPAGE51IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026includePPA,asimplementedfortheAkkuyunuclearplantinTürkiyeorCFDsagreementswithasetstrikepriceforsoldelectricity,asagreedonforthenewHinkleyPointCreactorintheUnitedKingdom.Geopoliticalenergystrategiesandlimitedoptionstodiversifyrisksonfinancialmarketscanjustifygovernmentinterventions.Dedicatedinstitutionswithfocusedexpertiseandpooledcapitalcanalsobebeneficial.Withinthiscontext,theInternationalBankforNuclearInfrastructure(IBNI)intendstoprovideawiderangeoffinancialandadvisoryservicesforthedevelopmentofnuclearprojectsinitsmemberstates.Accordingtoitsrepresentatives,theyexpect20-30countriestosignthejointdeclarationfortheestablishmentoftheinstitutionbetweenDecember2023andtheNuclearEnergySummitinBrusselsinMarch2024.Greentaxonomiescanplayaroleinfinancingofnuclearenergybutremainapoliticaldiscussion.InJuly2023,followingtheUnitedKingdom,ChinaandKorea,theEuropeanparliamentvotedtoincludenuclearenergytransitionallyasagreenpowersourceintoitsnewsustainabilitytaxonomy.However,morethanhalfoftheworld’smajorprivatebankshaveexcludednuclearenergyfromtheirgreenfinancingframeworks.Inresponse,thedeclarationtotriplenuclearenergyby2050,launchedattheCOP28,includesastatementurgingfinancialinstitutionstoincludenuclearenergyintotheirenergylendingpolicies.SMRdeploymentisstillatasmallscaleandisnotwithoutchallenges,butR&DispickingupAnewgenerationofSMRisintendedtoaddresssomeofthefinancingchallengesofnuclearcapacitybyemployingmodularreactors,whichmightofferserialfactoryproduction,sothatthefinalproductcanbeshippedtothesite.Thesmallerprojectsizehelpstofacilitatethefinancingofprojectsasthecapitalrequirementsforanysingleprojectaredecreased.Serialproductionwouldreduceconstructionriskonthesideoftheoperator.WhilsttheaveragecapitalcostperMWislikelytobesimilar,thecostuncertaintyofSMRisestimatedtobesignificantlylowerthanthatoflargereactors,whereespeciallytailrisksarestronglyreduced.Therearearangeoftechnologieswithdifferentuse-casesbeingdevelopedandoperated,rangingfrommicroreactorswithcapacitiesbelow10MWandlargereactorsofupto400MW.Currently,accordingtotheInternationalAtomicEnergyAgency(IAEA),thereareonlytwocountriesoperatingSMRs,ChinaandRussia.WhilstRussiaisrunninganinstallationwith70MWcapacity,ChinarecentlystartedcommercialoperationsofthefirstunitattheShidaowansitewithacapacityof200MW.Thetwocountriescombinedcurrentlyhaveanadditional425MWunderconstruction.Inaddition,ArgentinaisplanningtoconnectitstestreactorCarem25in2027.TheOECDNuclearEnergyAgency(NEA)estimatesglobalPAGE52IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026SMRcapacitytoreach21GWby2035.Beyond2040therecouldbealargeexpansionofthistechnologyifthegoalsofefficientproductionandlow-riskinstallationscanberealised.TheOECDNuclearEnergyAgency’sSMRDashboardprovidesacomprehensiveoverviewofcurrentdevelopmentsinSMRs.ThediscontinuationoftheNuScaleSMRprojectsettodeploythefirstVOYGRSMRinIdaho(US)wasnotablein2023.Afterfailingtomeettargetsubscriptionlevelsforfuturepoweroutput,andcitingescalatingcost,operatorUtahAssociatedMunicipalPowerSystems(UAMPS)andNuScaleagreedtoterminatetheproject,scheduledtostartoperationsin2029.Theprojectplanincludedsix77MWmodules.Initially,thecostswereestimatedatUSD58/MWhin2020,howeverby2023theseprojectionshadballoonedtoUSD119/MWhduetoincreasedmaterialandequipmentcost.InDecember2023,alawsuitwasfiledagainstNuScalebyinvestors,accusingthecompanyofactivelywithholdinginformationaboutthefinancialissuesofthenowcancelledprojectfromitsinvestors.TheoutcomeandinfluenceonthefinancialviabilityofNuScaleremainsunclearatthetimeofwritingthisreport.ThiseventunderlinedthedifficultiesandvulnerabilitiesofpilotSMRprojects,raisingconcernsaboutthefutureofthem.However,NuScalehasaffirmeditscontinualcommitmenttoitsdesignandstatedthatotherprojectsintheUnitedStates,aswellasinRomaniaandKorea,arestillbeingdeveloped.AsofNovember2023,NuScaleholdstheUS-modelSMRdesignapprovedbytheNRC.Despitetheuncertaintysurroundingthepaceofmassdeployment,thereisawideinterestamongstnumerouscountriesforthedevelopmentofSMRasatechnology.InDecember2023,HoltecInternationalannouncedplanstoaddtwoofitsSMR-300unitstotheexistingPalisadessiteinMichigan,withcommissioningexpectedinthemid-2030s.CanadahasalsoaffirmeditsplanstorelyonSMRtechnologyasacentralpartofitsenergystrategy.Specifically,theprovinceofOntarioplanstodeployfourunitsofthe300MWHitachiBWRXfromGEHitachiNuclearEnergyatitsDarlingtonsite.Further,additionalunitshavebeenproposedbyNewBrunswickPoweratPointLepreauandpublicfundingisprovidedtopreparethedeploymentofHitachiBWRXunitsinSaskatchewan.Inaddition,inDecember2023,Polandannounceditsintenttodeploy24300MWHitachiBWRXunitsatsixlocations.Inaddition,therearecurrentlyover85designsandconceptsbeingdevelopedbyfirmsandoperatorsinover20countries,includingallmajornuclearpowers,suchasChina,theUnitedStatesandRussia.Inaddition,FrancehasrecentlyannouncedtheinvestmentofUSD1billionforthedevelopmentofcommerciallyviableSMRsuntil2030asacentralpartofitsre-enhancednuclearstrategy,andinJuly2023confirmedco-operationwithIndiatoadvanceSMRtechnology.AtthesummitofG7leadersinMay2023,aconsortiumfromJapan,KoreaandtheUnitedStatesannouncedthefundingofanSMRfordeploymentinRomania.PAGE53IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Further,inNovember2023,theEuropeanCommissionannouncedanIndustrialAlliancetofacilitatethedevelopmentanddeploymentofSMRsinearly2024.AtCOP28,theUnitedStatesannouncedarangeoffinancialinstrumentsthroughitsExport-ImportBanktosupporttheexportofSMRtechnology.NumberofongoingSMRprojectsbycountryandstatusOther60UnitedKingdom50Canada40Japan30China20Russia10UnitedStates0DesignphaseInoperationUnderconstructionDesignreadyIEA.CCBY4.0.Notes:TheIAEAcountsJapan’sHTTRtest-reactorinŌaraiasanadditionalSMRinoperation.Basedonnewerdefinitionsonmodularity,weexcludeitfromthestatistic.Source:IEAanalysisbasedonownresearchanddatafromIAEA.ThelargestplayersindevelopingnewtechnologiesaretheUnitedStates,ChinaandRussia,accountingformorethanhalfofprojectsinthedesignphase.InEurope,therearecurrently13ongoingprojectsatvaryingstagesofthedesignprocess,includingintheUnitedKingdom,France,Denmark,theCzechRepublic,Netherlands,SwedenandItaly.ForSMRs,cogenerationorhightemperaturesteamforindustrialusearealsobeingexplored.Allunitscurrentlyoperatingorunderconstructionhaveacapacitybetween30-300MW.Chinaisoperatingagas-cooledSMR,andalsohaswater-cooledmodelsunderconstruction.Russiaalreadyrunsawater-cooledunitandinadditioniscurrentlybuildingaFast-NeutronSpectrumreactorofthetypeBrest-OD-300attheSeversksite.Aconsiderablenumberofprojectsbeingdevelopedaremicro-reactors.Thoseareeasilytransportableandflexibleunits,andthussuitedforuseinremoteareas,fortheelectrificationofindustrialcomplexes,researchstationsormilitarysites.TheUnitedStatesandRussiarunmorethanhalfoftheongoingresearchprojectsformicro-reactors,withJapan’sMitsubishiHeavyIndustriesalsoannouncingplanstohaveamicro-reactorwithacapacityof0.5MWcommercialisedby2030.Accommodatingtheneedforflexibilityinenergysystems,newSMRmodelsaredesignedtoprovidemoreflexibilitythancurrentGenerationIII+reactors.ThisPAGE54IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026featureisadvertisedbybothmanufacturers,energyprovidersandinternationalagencies.OtherconceptscombineSMRswithstorage,suchasaco-operationofTerraPowerandGEHitachiNuclearEnergythataimstoprovideflexibilitybycombininganuclearreactorwithathermalstoragetechnology,whichenablesboostingthesystemoutputbyover40%duringpeakhours.Hydropowergenerationwasreducedin2023innumerousregionsduetoweatherimpactAcommontrendacrossmultipleregionsin2023wasthesignificantreductioninhydropowergenerationduetoweatherimpact,particularlydroughts,belowaveragerainfallandearlysnowmelt.Asaresult,globalhydropowergenerationdecreasedbymorethan2%in2023comparedtoyearearlier.Theglobalaveragehydropowercapacityfactorisestimatedtohavefallentobelow40%.Thisisthelowestvaluerecordedsinceatleastthreedecadesandiswellbelowthe2015-2022averageof42%andtheaveragefor2004-2014of44%.Canada,China,Colombia,CostaRica,India,Mexico,Türkiye,theUnitedStates,andVietNam,amongothercountries,allexperiencedvaryingdegreesofreductioninhydropowergeneration.Insomecountriesthereducedhydropoweroutputresultedinenergyshortages,increasedrelianceonalternativesourcessuchascoalandthermalpower,andconcernsaboutelectricitysupplystability.Theconsequencesvaried,includingpowershortages,theneedforadditionalthermalpowerprocurementandhigherCO2emissions.Annualhydropowercapacityfactorsinselectedregions,1991-2023AveragecapacityfactorWorldChinaIndiaUSEU46%48%53%56%56%45%46%50%52%52%44%44%48%48%48%43%42%45%44%44%42%40%43%40%40%41%38%40%36%36%40%36%38%32%32%39%34%35%28%28%38%32%33%24%24%37%30%30%20%20%199119951999200320072011201520192023199119951999200320072011201520192023199119951999200320072011201520192023199119951999200320072011201520192023199119951999200320072011201520192023AveragecapacityfactorPolynomialtrendlineNotes:Theanalysisincludesreservoirandrun-of-rivertypehydropowerplants;excludespumpedhydrostorageplants.InAsia,hydropowergenerationinChinadecreasedby5.6%duetoseveredroughts,contributingtoa6.2%increaseincoal-firedgeneration.Indiafacedchallengeswitha15%dropinhydropower,whichledtopowershortages.ToPAGE55IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026ensureuninterruptedpowersupply,thegovernmentmandatedblending6%ofimportedcoalwithdomesticcoaluntilMarch2024.Vietnamfacedapowercrisisduetoadrought-inducedhydropowershortageandthecountryhadtosignificantlyincreasecoal-firedgenerationandelectricityimports.HydropoweroutputintheUnitedStatesdeclinedby4.4%duetorapidspringsnowmelt,impactingaround50%ofthecountry’shydropowercapacity.Canada,wherehydroaccountsforoverhalfofitselectricitysupply,similarlysawa7%reductioninhydropowerduetoamildwinteraffectingsnowmelt.Multi-yeardroughtsinMexicoledtoa40%decreaseinhydropowergenerationin2023,promptingoperationalalerts.ElNiñoSouthernOscillationimpactsthreatenedColombia'shydropowergeneration,whichconstitutesabout70%ofthecountry’sannualelectricityproduction.TheElNiñophenomenonledtosimilarlylowerhydropoweroutputinCostaRicain2023,resultinginthermalgenerationcontributingmorethan5%totheelectricitymix.TheEuropeanUnionrecoveredfromthe20%dropinhydropowergenerationin2022,asoutputincreasedby16%.However,Türkiyeexperienceda4.5%declinein2023duetoanextendeddrought,followingarecoveryinhydropowerin2022.Theoveralltrendhighlightsthesusceptibilityofhydropowertoweatherpatterns.Countrieswhoareparticularlyhydropower-dependentcanespeciallybecomeadverselyaffectedbyweather-relateddisruptionstohydroavailability.Diversifyingenergysources,increasinginterconnectionsandimplementingstrategiesforimprovedsecurityofsupplyinthefaceofchangingweatherpatternswillbeincreasinglyimportant.ThesupplychainofgasturbinesisgeographicallyconcentratedindifferentwaysTheutilisationratesofgas-firedpowerplantsinmanyregionsaresettodeclineastheyareutilisedmoreflexiblywithincreasingwindandsolarPVshareinthegenerationmix.Atthesametime,aselectricitydemandcontinuestogrow,newgas-firedpowerplantsarebeingbuilttomeetpeakdemandandprovidedispatchablecapacity.IntheIEA’sWorldEnergyOutlook2023,theStatedPoliciesScenario(STEPS)seesglobalinstalledcapacityofgas-firedpowerplantsin203010%higherthanin2022,equivalenttoabout200GWofcapacityadditions.Thiscomparestocapacityadditionsofapproximately240GWbetween2015and2022andshowstherewillbecontinueddemandforgasturbinesworldwide,eventuallyexpectedtobehydrogen-poweredintheIEA’sNZEScenario.Forexample,Germany,aimingtolargelyrelyonrenewablegenerationforitsenergytransition,isplanningPAGE56IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026tooperate23.8GWofhydrogenpowerplantsby2035,withtendersexpectedtobeauctionedby2026.Inexpectationofthesedevelopments,majorplayersarephasingincommercialhydrogen-readyturbines.In2023,Siemenssuccessfullyoperatedamodifiedgasturbinewith100%hydrogen.KawasakiHeavyIndustriesin2023commercialiseda1.8MWhydrogenturbine.GEalsohasturbineswith100%hydrogen-firingcapacity,andplanstoprovideutility-scalepowerplantsfullybasedonhydrogenby2030.Itisalsopossiblethatturbinesarepoweredbyotherrenewablegases.MitsubishiHeavyIndustriesisdevelopinganammonia-poweredturbine,plannedforcommercialisationby2025.Naturalgas-firedturbinesandhydrogen-readygasturbinesaretechnologicallyadvancedsystemsthatrequireahighlevelofexpertiseinthedesignandproductionphase.Consequently,onlyahandfulofdevelopersdominatethegasturbinemarket.Inaddition,themanufactureofgasturbinesrequiresseveralcriticalminerals,theproductionofwhicharehighlyconcentratedgeographically.Geographicandmarketconcentrationinglobalsupplychainsofenergytechnologiescanposepotentialchallengesthatneedtobeconsideredbygovernmentsandrelevantstakeholders,whichrecentIEAworkonPVsupplychainshasanalysedin-depth.CompaniesfromNorthAmericaandEuropedominatetheproductionofgasturbinesTurbinetechnologydevelopersarehighlyconcentrated,withthelargestthreecompaniesoperatinggloballyholdingover85%ofthemarketsharebyrevenuein2021.GEEnergyhasaglobalmarketshareofslightlyover45%,withSiemensEnergyandMitsubishiPowercontrolling22%and19%,respectively.Lookingatthegeographicaldistributionofthecompanies’headquarters,gasturbinemanufacturersarehighlyconcentratedoutsideAsia.FirmswiththeircorporateparentlocatedintheUnitedStatesholdover50%oftheglobalgasturbinemarket.Thesecompaniesalsohaveproductionfacilitiesoutsidetheirhomebase.Forexample,inadditiontoitsmainUSproductionfacilityinGreenville,NorthCarolina,GEoperatesamanufacturingcentreinBirr,Switzerland.Siemens,whilstmaintaininglargemanufacturingcapabilitiesatitshistoricplantinBerlin,alsooperatesfacilitiesinFinspång,Sweden,aswellasNorthCarolinaintheUnitedStates.Notably,thecompanyoperatesthelargestmanufacturingfacilityforgasturbinesintheMiddleEastatitsSiemensDammamEnergyHubinSaudiArabia,wherethefirst“MadeinKSA”gasturbinewasassembledin2016.PAGE57IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Exportersandimportersofgasturbinesintermsoftradevolumebycountry,cumulative2019-2021USDBillion20Restofworld18Canada16Singapore14China12France10GermanyItaly8UnitedKingdom6UnitedStates42Import0ExportIEA.CCBY4.0.Notes:TheanalysisisbasedonexportandimportdatafromtheCentred'étudesprospectivesetd'informationsinternationales(CEPII),andconsidersthetradeofgasturbinesexceeding5MW,andaggregatebycountry.Source:CEPII,BACIbilateraltradeflowdataset.Thedominanceofthosethreeplayers,however,isnotgoingunchallenged.ManufacturersinChina,suchasHarbinTurbineCompanyandDongfangElectricCorp,andinRussiaPowerMachines,haverecentlyconnectedtheirfirstheavy-dutygasturbines.TheRussiancompanyhasannouncedplanstobuildeight170MWturbinesannuallyby2025,withtheeventualgoalofaproductioncapacityof12turbinesperyear.Thetopsixcountriesexportinggasturbinesaccountedfor70%ofglobalexportsbetween2019-2021intermsoftradevolume(USDbillion),withtheUnitedStatestheleaderwitha30%share.ThelargestimporterintermsoftradevolumewasalsotheUnitedStates,withashareof10%,followedbyChinawith6%.Themarketconcentrationinimportersismuchlower,withthetopsixcountriesaccountingfor30%ofglobalimports.MiningofessentialcriticalmineralsforgasturbinesishighlyconcentratedinafewemergingeconomiesForgasturbines,theprincipalmaterialrequirementsarelowalloysteelaswellasheat-resistantnickel-basedsuperalloysfortheturbineblades.Themostrelevantcriticalmineralsusedinthesteelmixesaremolybdenum,manganese,chromite,nickel,cobaltandrhenium.Puttingtheabsoluteminedamountsintoperspective,themagnitudeofthesemineralsissmallcomparedtocommoditiessuchasironore.Whilein2022,2600Mtofironore,22Mtofcopperand20Mtofmanganesewereminedglobally,theamountofnickelminedwasonly3.2Mt,molybdenumPAGE58IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026andcobaltwereminedinthemagnitudeof255ktand200kt,respectively,andrheniumminingamountedtoonly58tglobally.AstudyfromtheFraunhoferInstituteforSolarEnergySystems(ISE),estimatesthematerialrequirementsby2050fora385MWSiemensGasTurbineincludepreciousmetalsof247kg/MWofhigh-alloysteeland137kg/MWoflow-alloysteel.Further,theturbinerequiresalmost900g/MWofcopper.Thistranslates,amongothers,intojustunder45kg/MWofchromite,25kg/MWofcobalt,around2.5kg/MWofnickel,2.8kg/MWofmanganese,andabout1.7kg/MWofmolybdenum.Recently,theglobalconcentrationofminingandprocessingofcriticalmineralshastakenaprominentplaceinglobaldiscussionsabouttheenergytransition.Thequantityofmaterialsrequiredforturbinesisunlikelytobeasignificantuseroftheglobaldemandforthesematerials,thoughtheyareusedinmultipleotherengineering,chemicalandmedicalapplications.Nevertheless,itisimportanttounderstandtheindustry'sdependenceonthemineralsupplychainstoidentifypotentialdependenciesonconcentratedorsinglesuppliers.Supplydisruptionsaffectinganyofthemajorsuppliersduetonaturaldisastersorgeopoliticaltensionsmayleadtodisruptionsinthegasturbineindustrysupplychain.Shareofglobalminingbyregionforselectedcriticalmineralsessentialtogasturbineproduction,2022100%RussiaIndonesia75%AustraliaUnitedRussiaUnitedKazakhstanGabonStatesPhilippinesStatesTürkiyeChilePoland50%25%SouthSouthAfricaAfricaCongoChinaIndonesiaChile0%CobaltManganeseMolybdenumNickelRheniumChromiteLargestproducerSecond-largestproducerThird-largestproducerRestofworldIEA.CCBY4.0.Source:IEAanalysisbasedondatafromUnitedStatesGeologicalSurvey,NationalMineralsInformationCenterTheminingoftherequiredmineralsishighlyconcentratedinsomecountries.Anestimated40%ofglobalmolybdenumminingtakesplaceinChinaandsimilarlymorethan40%ofworld’schromiteisminedinSouthAfrica.Thegloballandscapeisevenmoreconcentratedfornickel,cobaltandrhenium.Indonesiaisminingover50%ofglobalnickel,andtheDemocraticRepublicoftheCongo(hereafter,PAGE59IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026“Congo”)produces70%oftheglobalcobaltsupplies.ThevastmajorityofCongolesecobaltminesareownedandoperatedbyChinesefirms.Chilealonemineshalfofglobalrhenium.TwoothermajorminersofrheniumarePolandandtheUnitedStates,eachhavingashareofabout16%oftotalproduction.Theglobaldistributionofprocessingofthosemineralsisequallyconcentrated.Similartomining,thelargestplayersaccountforover40%ineachcase,withthetopthreeaccountingforover75%ofglobalprocessing(exceptnickelwithslightlyover65%).Notably,Chinaholdsanevenstrongerpositionintheprocessingstepascomparedtoglobalmining.Chinadominatestheglobalprocessingoftwoofthemineralsrequiredforthealloysinturbines,accountingforover75%ofbothcobaltandmolybdenumprocessing,and67%ofglobalmanganeseprocessing.CobaltminedinChinese-ownedminesinCongoislargelyprocessedinChina.Further,Chinaplaysasignificantroleintheprocessingofchromiteandnickel,therebybeinganintegralplayerinthesupplychainoffouroutoffivemineralscriticalforthegasturbineindustry.Shareofglobalprocessingbyregionforselectedcriticalmineralsessentialtogasturbineproduction,2022100%CanadaUkraineArmeniaFinlandIndiaChile75%KazakhstanSouthRussiaPolandChina50%AfricaUnitedStates25%ChinaChinaChinaChinaIndonesiaChile0%CobaltManganeseMolybdenumNickelRheniumChromiteLargestProcessorSecond-largestProcessorThird-largestProcessorRestofworldIEA.CCBY4.0.Sources:IEAanalysisbasedondatafromEuropeanCommission,RawMaterialsInformationSystem(RMIS),IEACriticalMineralsReview2023.Itisimportanttoemphasizethatrecyclingofturbinematerialscangreatlyreducethedependenceoftheindustryonglobalminingofthoseminerals.Giventheexpectedriseindemandthroughacceleratingrenewablesdeployment,recyclingmaterialsfromoldpowerequipmentcanbeanattractiveoptiontopartiallymitigaterobustincreasesindemand.Followingthesuccessfulrecyclingofajetenginegasturbinein2016,therearemanyfirmsspecialisingintherecyclingandrecoveryofpreciousmetalsfromusedturbinesattheendoftheiroperationallifetime.PAGE60IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Emissions:CO2fromelectricitysectorenteringastructuraldeclineChinaaccountsforhalfofthedeclineinglobalpowergenerationemissionsto2026Afterastrongreboundofalmost8%in2021,globalemissionsfromelectricitygenerationrose1.4%in2022.Similarly,emissionsincreasedby1%in2023,whichisanupwardrevisionfromourpreviousJulyforecast.Fossil-firedpowergenerationdecreasedinmanyregionsin2023,particularlyintheUnitedStatesandtheEuropeanUnion.Atthesametime,onaglobalscale,fossil-firedoutputremainedresilientamidreducedhydropowerbecauseofreasonssuchasdroughts,below-normalrainfall,andlowwateravailabilityduetoearlysnowmelt.China,India,Vietnam,UnitedStates,Canada,TürkiyeandMexico,amongothers,wereimpactedbyreducedhydropowergeneration.Astrongincreaseincoal-firedoutputinChinaandIndia,drivenbyreducedhydropowerandstrongelectricitydemandgrowth,preventedadeclineinglobalemissionsintheelectricitysector.Nevertheless,coalinChinaisexpectedtoenteraslowbutstructuraldeclineduetoasignificantincreaseinrenewablesdeploymentandtherebalancingoftheeconomy.Weexpectglobalelectricitysectoremissionstofall2.4%in2024,followedby0.5%declinesof0.5%in2025-2026.Whileextremeweather,economicshocksandgovernmentpoliciescouldcauseupticksinindividualyears,theoveralltrendisexpectedtoremainstable.CO2emissionsfromelectricitygenerationinselectedregions,2014-2026MtCO216000World6400China16002400140005600140021001200048001200India1800US1000040001000SoutheastAsia1500Japan&Korea3200120080002400800EU6000160060090040004006002000800200300000020142017202020232026201420172020202320262014201720202023202620142017202020232026IEA.CCBY4.0.PAGE61IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026China,theUnitedStatesandEuropeanUnionleaddeclinesinpowersectoremissionsGlobalemissionsfromelectricitygenerationareforecasttofallbymorethan2%in2024,followedbysmallerdeclinesofabout0.5%inboth2025and2026.Thelargecontractioninemissionsin2024assumesaverageweatherconditionsandthathydropowerinChinarecoversfromthedrought-inducedlowsofthelastthreeyears,displacingcoalandresultingina2.4%declineinChina’semissionsfromelectricitygeneration.Followedbyrapidrenewablesdeploymentandmoderatedemandgrowth,emissionsinChinaareexpectedtodeclineby1%peryearonaveragein2025-2026,fallingbackto2022levels.Chinaissettoaccountforalmosthalfofthetotaldeclineinglobalemissionsfrompowergenerationfrom2024to2026.USpowersectoremissionsareexpectedtodeclineonaverageby4%overthe2024-2026period,ledbytheongoingswitchfromcoaltogas,andrapidgrowthofrenewables.Thecountrywillaccountforone-quarterofthereductionsinglobalpowersectoremissions,followedbytheEuropeanUnionatone-fifthofthetotal.EUannualreductionsareforecastatanaverage11%in2024-2026.Overtheoutlookperiod,growthinelectricitysectoremissionsisexpectedtocomeprimarilyfromIndia,SoutheastAsia,andotheremergingeconomies.Thecontinuedgrowthincoal-firedgenerationinIndiaandSoutheastAsia,combinedwithrisinggas-firedoutputintheMiddleEast,willputupwardpressureonglobalemissions.Nevertheless,theseincreasesinemissionsarenotenoughtooffsetlargedecreasesexpectedinChina,theUnitedStatesandtheEuropeanUnion.ForecastedchangesinglobalCO2emissionsfromelectricitygeneration,2026vs.202313750MtCO213575IEA.CCBY4.0.13500-162-4513250-16713000+4113111-237-8+114127501250012250Changes2026vs.2023AnnualtotalCO2emissionsIEA.CCBY4.0.PAGE62Electricity2024GlobaltrendsAnalysisandforecastto2026EmissionintensityofthepowersectortofallatanunprecedentedrateAsglobalemissionsfrompowergenerationenterastructuraldecline,itsCO2intensityisforecasttoimprove,byfallingatanunprecedentedaverageannual4%overthe2024-2026period,doublethe2%rateofdeclineobservedin2015-2019.Afteradeclineof1%in2023,globalCO2intensityisforecasttotumblebyalmost6%in2024,whichassumesarecoveryinhydropowergenerationinChina.Thiswillbefollowedbyanaverageannualdeclineof3.5%inthe2025-2026period,astheshareoflow-carbonsources(renewablesandnuclear)intotalsupplycontinuetoincrease.GlobalCO2intensityisexpectedtofallfrom455gCO2/kWhin2023to400gCO2/kWhin2026.TheEuropeanUnionissettohavethehighestrateofrelativedeclineoutto2026,atanaverage13%peryear,inemissionintensityamongthemajorenergyconsumingregions,followedbyChina(6%)andtheUnitedStates(5%).By2026,CO2intensityofpowergenerationinChinaisexpectedtofalltoUSlevelsfrom2014.Overtheoutlookperiod,Indiaisalsoforecasttorecordadeclineof3%onaverageannuallyastheshareoflow-carbonsourcesincreases.Bycontrast,emissionintensityinSoutheastAsiaisexpectedtoremainstable.CO2intensityofelectricitygenerationinselectedregions,2014-2026900gCO2/kWh201520162017201820192020202120222023202420252026800700IEA.CCBY4.0.60050040030020010002014WorldUnitedStatesChinaIndiaEuropeanUnionSoutheastAsiaIEA.CCBY4.0.Note:TheCO2intensityiscalculatedastotalCO2emissionsdividedbytotalgeneration.PAGE63Electricity2024GlobaltrendsAnalysisandforecastto2026CO2intensityofelectricitygenerationintheworld,byselectedcountriesandregions(gCO2/kWh),2014-202612001200AsiaPacific120012001200MiddleEast1200Africa100010001000100010001000WorldAmericas800800800800800800600600600600Europe60060040040040040040040020020020020020020000000020142017202020232026201420172020202320262014201720202023202620142017202020232026201420172020202320262014201720202023202612001200India120012001200Australia1200Indonesia12001000100010001000100011000000ChinaJapan800800800800800880000600600600Korea600600400400400400400660000200200200200200400240000000002014201420002016201720182020020202023202220262024202620142017202020232026201420172020202320262014201720202023202620142017202020232026201420172020202320261200120012001200120012001000United10001000Mexico10001000Germany1000States800800800800800800600600Canada600600Brazil600600France400400400400400400200200200200200200000000201420172020202320262014201720202023202620142017202020232026201420172020202320262014201720202023202620142017202020232026120012001200United120012001200Kazakhstan100010001000Kingdom100010001000TürkiyeRussia800800800800800800600600Spain600600600600400Italy400400400400400200200200200200200000000201420172020202320262014201720202023202620142017202020232026201420172020202320262014201720202023202620142017202020232026120012001200SouthAfrica120012001200100010001000100010001000SaudiArabiaUnitedArabMorocco800800Emirates800800800800600600600600Egypt600600400400400400400400Nigeria200200200200200200000000201420172020202320262014201720202023202620142017202020232026201420172020202320262014201720202023202620142017202020232026AsiaPacificAmericasEuropeEurasiaMiddleEastAfricaIEA.CCBY4.0.Notes:TheCO2intensityiscalculatedastotalCO2emissionsdividedbytotalgeneration.Thefiguresfor2024-2026areforecastvalues.PAGE64IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Prices:WholesaleelectricitypricesfallfromrecordhighsElectricitypricesinmanyregionsstillremainabovepre-pandemiclevelsWholesaleelectricitypricesinmanycountriesfellin2023fromtherecordhighsobservedin2022.Themoderationinenergycommodityprices,suchasgasandcoal,ledwholesaleelectricitypriceslower,particularlyinAsiaandEurope.Theyear-on-yearreduceddemandinEuropealsoaddeddownwardpressureonprices.Despitethis,pricesintheseregionsstillremainsignificantlyhigherthanpre-Covidlevels.Futurespricesalsoshowvaryingtrendsamongcountries,reflectingdifferentseasonalsupplyanddemandfundamentals.Quarterlyaveragewholesalepricesforselectedregions,2019-2025450USD/MWh375IEA.CCBY4.0.300225150750Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q42019202020212022202320242025FranceGermanyJapanIndiaAustraliaUnitedStatesNordicsIEA.CCBY4.0.Notes:Continuouslinesshowhistoricaldataanddashedlinesrefertoforwardprices.PricesforAustraliaandtheUnitedStatesarecalculatedasthedemand-weightedaverageofavailablepricesintheirregionalmarkets.FortheNordicsregion,theNordPoolsystempriceisusedforhistoricalpricesandEEXNordicsfuturesareusedforforwardprices.Sources:IEAanalysisbasedondatafromFrenchtransmissionsystemoperatorRTE(France)accessedviatheENTSO-ETransparencyPlatform;GermanregulatorBundesnetzagentur,SMARD.de;AEMO,Aggregatedpriceanddemanddata;EIAShort-TermEnergyOutlookJanuary2024;IEX,AreaPrices;EEX,PowerFutures;ASX,ElectricityFutures©ASXLimitedABN98008624691(ASX)2020.Allrightsreserved.ThismaterialisreproducedwiththepermissionofASX.Thismaterialshouldnotbereproduced,storedinaretrievalsystemortransmittedinanyformwhetherinwholeorinpartwithoutthepriorwrittenpermissionofASX.Latestupdate:19January2024.PAGE65Electricity2024GlobaltrendsAnalysisandforecastto2026WholesaleelectricitypricesdeclinedintandemwithlowernaturalgascostsinmanyregionsAfterpeakingatanaverageUSD80/MWhin2022,wholesaleelectricitypricesintheUnitedStatesfell40%in2023,toanaverageUSD46/MWh.Thelowerlevelreflectedthe60%plungeinnaturalgaspricesfromtheir2022highs.Theotherfactorwasmilderweatherinboththewinterandsummerof2023versusthepreviousyear.For2024theaverageUSwholesalepriceoutlookremainsstable,slightlylowerthanayearago,ataroundUSD40/MWh.Thisisabout15%higherthanthe2019averageandremainsthelowestwholesaleelectricitypriceamongthemarketsconsideredinouranalysis.InAustralia,wholesalepricesaveragedAUD82/MWh(USD55/MWh)in2023,downmorethan50%fromtheir2022highsand10%belowthe2019average.InQ12023,wholesaleelectricitypriceswerezeroornegative12%ofthetime,largelyduetorecordrenewablegenerationcontributingtothelowestQ1operationaldemandintheNationalElectricityMarket(NEM)regionssince2005,accordingtotheAustralianEnergyMarketOperator(AEMO).Atthesametime,electricityfromgas-firedgeneration,whichtypicallyisthemostcostly,reacheditslowestQ1levelsince2005.InQ32023,record-settingrenewablegenerationoutputpusheddownaveragewholesaleelectricitypricesbymorethantwo-thirds,doubledtheoccurrenceofzeroornegativewholesaleprices(19%)andreducedtotalemissionsby11%year-on-year,AEMOreported.OuranalysisforSouthAustralia–whereVREsharereached75%showsthathourlypriceswerenegativeabout25%ofthetimein2023,upfrom19%in2022.Thishighlightstheneedforadditionalsystemflexibilityintheformofmoreprice-reactivedemandandsupply,aswellasadditionalstorage.Futurescontractsfordeliveryin2024tradedatanaverageAUD90/MWh(USD58/MWh),10%higherthanin2023.PAGE66IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Numberofhourswithnegativewholesaleelectricitypricesandshareofvariablerenewableenergyintotalelectricitygenerationinselectedregions,2019-20232500Numberofhourswithnegativeprices100%2000201990%1500202080%1000202170%202260%500202350%0201940%202030%202120%202210%20230%201920202021202220232019202020212022202320192020202120222023NetherlandsGermanyCaliforniaJapanSouthAustraliaNumberofhourswithnegativeprices(leftaxis)ShareofVREintotalgeneration(rightaxis)IEA.CCBY4.0.Note:Japandoesnotallownegativepricesinthewholesaleelectricitymarket,thelowestpossiblepriceislimitedtozero.ThenumberofhoursshownhereforJapanthereforerepresentsthehourswhenpriceswerezero.TheCaliforniapricesrefertowholesalepricesfromtheelectricityhubSP-15.Source:IEAanalysisbasedondatafromERCOT,CAISO,AEMONEM,andENTSO-ETransparencyPlatform.IncontrasttotheUnitedStatesandAustralia,the2023averageEuropeanpriceataroundEUR105/MWh(USD115/MWh)wasstillaboutdoublethe2019levelofEUR54/MWh(USD50/MWh).ThiswasdespitewholesaleelectricitypricesinEuropefallingonaveragebymorethan50%in2023fromtherecord2022highs.Inthesummerof2023,theEuropeanelectricitymarketswerecharacterisedbynegativewholesalepricesamidstrongsolaroutputagainstlowelectricitydemand.AsimilarepisodeofnegativepricesalsooccurredinlateDecemberwhenstrongwindgenerationaccompaniedlowelectricitydemandduringtheholidayseason.In2023,thenumberofhourswithnegativewholesaleelectricitypricesmorethanquadrupledincountriessuchasGermanyandtheNetherlandscomparedtothepreviousyear.In2023,priceswerebelowzeroinGermanyalmost3%ofthetime,andintheNetherlandsalmost4%.LikemanyotherEuropeanmarkets,theNordicsalsosawrecordwholesalepricelevelsin2022,asthecheaperhydropower-drivenpowerexportstoneighbouringEuropeanmarketsaddedupwardpressureondomesticwholesaleprices.InlinewiththemoderationofEuropeanwholesalemarkets,pricesintheNordicsfellby60%in2023,withtheNordPoolspotpriceaveragingEUR57/MWh(USD61/MWh).FuturesfortheNordicsmarketindicatesimilarpricelevels,whichmakesittheonlywholesalemarketinEuropetohavecomparablepriceslevelstoPAGE67IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026thoseintheUnitedStatesandAustralia.Nevertheless,regionaldifferenceswithintheNordicsmarketexist,withsouthernScandinaviagenerallyfacinghigherpricesthanthenorthernparts.Pricesfornaturalgas(left)andcoal(right)inselectedmarkets,2019-202625060USD/MWhUSD/MWh200481503610024501200Jan-19Sep-19May-20Jan-21Sep-21May-22Jan-23Sep-23May-24Jan-25Sep-25May-26Jan-19Sep-19May-20Jan-21Sep-21May-22Jan-23Sep-23May-24Jan-25Sep-25May-26HenryHubTTFCentralAppalachiaARAJKMAvg.AsiaAvg.USAAvg.AsiaNote:2024-2026pricesarebasedonavailableforwardpricesasofJanuary2024.NaturalgaspricesTTF;coalpricesCIFARA;AsianaturalgaspricesreflectestimatedLNGimportprices,includingviaoil-indexedLNGcontractsandspotprocurements;coalpricesareJapanmarkerprices.Sources:EIA(2023),STEO,January2024.UncertaintyaroundtheFrenchnuclearrecoveryandweatheroutlooktopropupwinterpricesinEuropeFrenchwholesalepricesin2023declinedyear-on-yearbymorethan60%.ThegradualrecoveryoftheFrenchnuclearfleetfromtherecord-lowavailabilitylevelsin2022,combinedwithfallingpricesofenergycommodities,drovewholesaleelectricitypricesdown.AtanaverageofEUR97/MWh(USD105/MWh),Frenchwholesalepricesin2023wereabout18%lowerthaninGermany.InJuly2023,FrenchfuturescontractsfordeliveryinQ12024costalmostdoubletheGermanfuturesforthesameperiod.ThispricepremiumgraduallydisappearedastheFrenchnuclearpowerplantoperatorEDFconfirmedthatitexpectsthecountry’snuclearpowerplantfleettocontinueitssteadyrecovery.DevelopmentsregardingthemaintenancescheduleoftheFrenchnuclearfleetwillcontinuetohaveastrongimpactonthefuturesprices.GermanwholesaleelectricitypricesaveragedEUR118/MWh(USD127/MWh)in2023andwere55%lowercomparedto2022.Nevertheless,priceswerestillabovepre-Covidlevelsandareonaveragealmostthreetimeshigherthanthe2019level.TheuncertaintysurroundingtheavailabilityofFrenchnuclearplantsisalsoreflectedintheGermanprices,asitinfluencesthesupplypatternsviaPAGE68IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026electricityimportsandexports.Inadditiontothis,weather-inducedpricevolatilitycanaffectthenear-termoutlook,withthepotentialofcolderthannormalwinterweatherpushingupthepricesofnaturalgas.WholesalepricesinJapanandIndiaremainelevatedabove2019levelsWholesaleelectricitypricesinJapanfellabout50%in2023comparedto2022,toanaverageofJPY11930/MWh(USD85/MWh).Inadditiontolowerpricesforenergycommodities,Japan’spowermarketin2023wascharacterisedbyoveralllowerelectricitydemandandastablesupplysituation,despitehighertemperaturesthatdrovecoolingconsumptionduringitshottestsummerinrecordedhistory.Reportedlythereislimitedconcernforatightsupply-demandoutlookforthewinterof2023/24,whichisreflectedinthestabletrendoffuturesprices.Indiaremainstheonlymarketthatdidnotpostasubstantialdropinwholesaleelectricitypricesin2023.Pricesfell4%in2023toINR5540/MWh(USD68/MWh),butwerestillalmostdoublethosein2019.Thetightsupplysituationduetostrongdemandgrowthkeptpriceselevated.ThepricecapofINR10000/MWhcontinuedtobeimplementedtoprotecttheinterestsofbuyers.Further,ahighpricesegmentwasintroducedtocovercostlypowergenerationtechnologies(gasandimportedcoal),buthasseenlowandintermittentbuyerpresence.Whatdoesenergy-intensiveindustrypayforelectricityacrosstheworld?Followingtheriseinwholesaleelectricitypricesthrough2021-2022,manyregionssawincreasesinelectricitycostsintheindustrysector.Europeanindustry,inparticular,facedhighcostscomparedtootherregions.Whileelectricitypricesforlargeenergy-intensiveconsumersweregenerallyhigherinEuropebeforetheenergycrisisin2019,forexample,thanintheUnitedStates,theywerestillatcomparablelevels.Inaddition,in2022Europeanpricesincreasedsubstantially.Countriesstronglyrelyingongasorcoalwereparticularlyexposedtopricehikes,withpricesinGermanyaboutthreetimesashighastheUSprices,andthoseinItalyaboutfivetimesashigh.Averagefinalelectricitypricesforthelargeenergy-intensiveindustryintheEuropeanUnionareexpectedtodeclinein2023basedonEurostatdata,followingthepeakin2022.Exactlevelsneverthelessdependontheelectricityprocurementstrategiesfollowedbyindustries(e.g.shareofspotvs.long-termprocurement)aswellascountry-specificmeasures.PAGE69IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Estimatedfinalelectricitypriceforlargeindustrialcustomersinenergy-intensiveindustries,2019-2023300USD/MWh250200150100500ItalyGermanyFranceEUNorwayUnitedStatesChina20192020202120222023EIEA.CCBY4.0.Notes:Theanalysisconsiderselectricitycostsofindustrieswithgreaterthan150GWhofannualelectricityconsumptionfortheEuropeancountries,basedonEurostatdata.ElectricitypricecompensationincludedforcountriesthatparticipateinEU-ETS.ForthecalculationofthemaximumpossiblestateaidforelectricitypricecompensationinEuropeancountries,theanalysisassumesthatthespecificproducthasanelectricityconsumptionbenchmarkof0.8andthatthecompanyinquestionreceivesthemaximumpossiblestateaidoncethisbenchmarkisincorporatedintothemaximumaidcalculation.ThepricesfortheUSandChinaareindicativeoftheaveragereportedprices;individualindustriesdependingontheirenergyconsumptionlevelsandwheretheyarelocatedcanfacedifferentprices.Sources:IEAanalysisbasedonIEAend-usepricesdatabase;datafromEurostat(2023);OfficialJournaloftheEuropeanUnion(2021),SoutheasternU.S.IndustrialRateSurvey;Brubaker&Associates(2023);ShanghaiMetalsMarket(2023);IntercontinentalExchange(2023),EUAFutures(AccessedNovember2023).InFrance,theamountofnuclearpowersoldbyFrenchstate-ownedutilityEDFtoalternativesuppliersattheregulatedpriceofEUR42/MWhundertheARENHlawdecreasedfrom120TWhin2022to100TWhin2023,whichaddedupwardpressureonprices.Expiringattheendof2025,theARENHschemewillbesucceededbyanewagreementbetweenEDFandtheFrenchgovernment.ItstipulatesthatallofEDF’snucleargenerationistargetedtowardsanintendedaveragepriceofEUR70/MWh.TheagreementaimstoachievethiswithamechanismtoredistributeexcessprofitsofEDFbacktoconsumers,where50%ofanyadditionalrevenuegeneratedaboveEUR78-80/MWh(withtheexactpricestilltobedeterminedatthetimeofwritingofthisreport)wouldberedistributed,and90%ofallrevenuesexceedingapriceofEUR110/MWh.Thesethresholdsareregularlyrenegotiated.TheagreementremainssubjecttoapprovalbytheEuropeanCommission.InChina,priceswererelativelystablein2023comparedto2022,althoughsomeprovinceswithinChinarolledbackorcancelleddiscountedelectricitypricesfortheindustry.Areformoftheelectricitypricingsystemsfurtherendthepreferentialtreatmentofheavyindustries,settingequalratesbasedonvoltagelevelsforallcommercialandindustryusers.However,priceincreasescanbeexpectedin2024,astheChinesegovernmentannouncedstepstoliberaliseindustrypowerPAGE70IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026prices.ThisallowedpowerproducerstochargemarketpricestoindustryconsumersstartinginOctober2023,resultinginapriceincreaseofupto20%forsomeindustryconsumers.Continuingthisdevelopment,startinginJanuary2024,coalpowerplantswillreceiveguaranteedpaymentsbasedontheinstalledcapacity,financedbyasurchargetoindustrialandend-useconsumers.RussiaalsoannouncedpriceincreasesforitspowerexportstoChinainlate2023,puttingfurtherupwardpressureonpricesgoingforward.Finalcostofelectricityforenergy-intensiveindustriesinEuropealsodependsonindirectETScompensationLargeindustrialconsumersareoftenfullyorpartiallyexemptfromtaxesandlevies.Furthermore,carboncostsarisingfromtheEU-ETScanbecompensatedthroughstateaidandthismustbeconsideredinthefinalelectricitypricetoaccuratelyassessthecompetitivenessofenergy-intensiveindustryinEurope.Thereareseveralfactorsthatgointocalculatingthemaximumstateaidthataplantmayapplyforeachyear,relatingtothecarbonpriceburdeninelectricityconsumption.TheEuropeanCommissionspecifiesthecalculationoftheimplicitcarbonpriceburdenthroughelectricityuseonaproduct-regionlevelbymultiplyingdefinedproduct-specificelectricityconsumptionefficiencybenchmarks,regionalcarbonintensitiesofpowerproductionandtheEuropeanUnionAllowance(EUA)forwardpricefromthepreviousyear.Theefficiencybenchmarkperproductistheelectricityconsumptionpertonneofoutputforagivenproductwhenusingthemostelectricity-efficientmethodofproduction.Everyplantcanapplyforpayableaidbasedonitscalculatedimplicitcarbonpriceburdenandrealisedproductionvolume.Since2019,anaidintensityof0.75isspecified,meaningthepayablesupportamountstoamaximumof75%ofthecalculatedpriceburden.Allaidschemesrelatedtothemitigationofthecarbonpriceburdenonelectricitymustbephasedoutby2030,asspecifiedonthemostrecentguidelinesoftheEuropeanCommissiononStateaidmeasuresinthecontextoftheEU-ETS.PAGE71IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Electricitypriceforlargeindustrialcustomersinenergy-intensiveindustriesin2019(left)and2022(right)inselectedcountriesUSD/MWh35020193502022300300250250200200150150100100505000FinalelectricitypriceCompensationforindirectcostsofEUETSRecoverabletaxesIEA.CCBY4.0.Notes:Theanalysisconsiderselectricitycostsofindustrieswithgreaterthan150GWhofannualelectricityconsumptionfortheconsideredEuropeancountries,basedonEurostatdata.ElectricitypricecompensationincludedforcountriesthatparticipateinEUETS.ForthecalculationofthemaximumpossiblestateaidforelectricitypricecompensationinEuropeancountries,theanalysisassumesthatthespecificproducthasanelectricityconsumptionbenchmarkof0.8andthatthecompanyinquestionreceivesthemaximumpossiblestateaidoncethisbenchmarkisincorporatedintothemaximumaidcalculation.ThefinalUSelectricitypriceisbasedoffthefinalelectricityforindustryinTexas.ThefinalelectricitypriceforChinaisbasedoffthefinalelectricityforindustryinInnerMongolia.Sources:IEAanalysisbasedondatafromElectricitypricescomponentsfornon-householdconsumers;Eurostat(2023),CommunicationfromtheCommissionsupplementingtheGuidelinesoncertainStateaidmeasuresinthecontextofthesystemforgreenhousegasemissionallowancetradingpost-2021;OfficialJournaloftheEuropeanUnion(2021),SoutheasternU.S.IndustrialRateSurvey;Brubaker&Associates(2023),WilltheCancellationofPreferentialPowerTariffinInnerMongoliaImpactNewEnergyMarket?;ShanghaiMetalsMarket.(2023).EUAFutures;IntercontinentalExchange(2023).ThefutureofelectricitypricesforEuropeanindustriesPolicychangesmayfurtherinfluencethefinalelectricitycostofenergy-intensiveindustry.Germanytemporarilyintroducedapriceguarantee,wherefirmsreceive70%oftheirhistoricaldemandatasetpriceofEUR130/MWh(plustaxesandlevies),applicabletouserswithademandexceeding30MWperyear.Morelong-termmeasureswereapprovedinearlyNovember2023,withthestatedobjectiveforenergy-intensivebusinessestoremaincompetitiveandtopreventindustriesinthecountryfromrelocatingabroad.Thenewmeasuresincludeapracticalexemptionfromthepowertaxforallindustry,reducingitfromapproximatelyEUR15.3/MWhtoEUR0.5/MWhfortheyears2024and2025.Inaddition,aftersubsidisinggridlevieswithEUR13billionin2023,thegovernmentdeclaredinNovember2023thatitwillspendanotherEUR5billiontostabilisegridlevieswithinthatperiod.However,laterinNovember2023,theGermanSupremeCourtruledthattheextraspendingofthegovernmentintheenergycrisiswasinconsistentwiththeconstitutionalcaponpublicdebt,forcingthegovernmenttorenegotiateitsbudgetfor2024,whichincludesthespendingforthelong-termsupportmeasuresthatPAGE72IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026wereagreedearlierin2023.Inresponse,thefinanceministryhastemporarilyhaltedtheapprovalofanynewcommitmentsfortheuseofthefundsdedicatedinparttotheelectricitypricereliefmeasures.Asthepaymentsforthepriceguaranteesforpartsofthepowerandgasconsumptionoftheenergy-intensiveindustryhavebeenapprovedprior,theywillcontinuetoflow.However,theywillbephasedoutfourmonthsearlierthaninitiallyplanned,atthebeginningof2024.Therenegotiatedbudget,agreedinDecember2023,reaffirmedthecontinuationofthemajorpartsoftheinitiallyagreedlong-termenergypricereliefmeasures,suchasthestrongreductionofthepowertaxforenergyintensiveindustryaswellasthecompensationforpowercostincreasesduetotheEU-ETS.Still,thenewbudgetincludedthecancellationoftheEUR5billionpublicinvestmenttostabilisegridnetworkcharges,initiallyannouncedin2023.Concernsaboutthefinancialburdenassociatedwithsupportingenergy-intensiveindustryarebeingraisedinothercountriesaswell.Norway,havingimplementedafloorpriceforcompensationforcompaniesforCO2costsaboveUSD19.07/t,islookingtoincreasethefloorpricefurtherinthenextnationalbudget.AreformoftheelectricitymarketwiththegoaltoprotectbothbusinessesandconsumersagainstsoaringpriceswithintheEuropeanUnionhasbeenagreeduponbetweentheCouncilandtheParliamentinDecember2023.Theproposalnowneedstobeformallyadoptedbybothpartiestoenterintoforce.Onecentralmeasurediscussedisdefiningtwo-waycontractsfordifferenceasthecentralallowedsupportmeasurefornewinstallationsusingtechnologiesincludedinthegreentaxonomy.Ifthemarketpriceisaboveapre-agreedstrikeprice,theexcessrevenuesaredistributedtoconsumers,whileifthemarketpricesarebelowapre-agreedstrikeprice,thenthedifferenceisreimbursedtothegenerator.Theaimistohelpincreasethedeploymentofrenewablesbyprovidingaguaranteedreturnoninvestmentaswellasmorepredictablepricing.Theunderlyingspotmarketmodelislargelypreserved,howevercapacityremunerationschemesareexplicitlymentionedasplayinganintegralroleinthefutureelectricitymarket.MoredetailedinformationonadditionalcontentandnegotiationsprocessofthereformisprovidedintheEuropeSectionoftheRegionalFocuspartofthisreport.HouseholdelectricitypricesandaffordabilitySincetheonsetoftheglobalenergycrisis,householdsacrosstheworldhaveseenanincreaseintheretailelectricitypricesaffectingtheiraffordability.RetailelectricitypricesintheUnitedStateshaveincreasedbya5%yearlyaveragefrom2019to2023.Bycontrast,pricesintheUnitedKingdom,adjustedforpurchasingpowerparity(PPP),haveincreasedby19%inthepastyearanddoubledsince2019.Norwaysawrecord-highelectricitypricesin2022.Thehydropower-basedcountrysufferedareductioninitsreservoirswhich,incombinationwiththePAGE73IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026ongoingEuropeanenergycrisis,createdthesurge.By2023,priceswerereducedbyaroundNOK1000comparedtothepreviousyear,neverthelessremaining70%highercomparedto2019levels.AveragehouseholdelectricitypricesinUSD/MWhinpurchasingpowerparity(PPP),2019-2023600USD/MWh5004003002001000KoreaNorwayTürkiyeUnitedKingdomUnitedStatesChile20192020202120222023IEA.CCBY4.0.Note:ResidentialelectricitypricesincludetaxesandhavebeenconvertedfromlocalcurrenciestoUSD/MWh(PPP)usingPPPconversionratesprovidedbytheIMFPPPdatabase.2023valueistheaverageofQ1-Q32023forallthecountriesexceptChile,whichisbasedonQ1-Q22023average.Thecountriesshownherearechosenduetodataavailabilityfor2023asthetimeofpublicationofthisreport.Sources:IEAelectricitypricesdatabase,IMF,PPPdatabase.Toprotecthouseholdsagainstsoaringprices,governmentsusedmostlytemporarymeasuresintheformoftaxexemptionsandpriceregulationmechanisms.InChile,thegovernmentintervenedandfrozetariffsforconsumersstartingin2019,therebyleavingthepriceslargelyunchangedduringtheenergycrisis.TheUnitedKingdomputintoeffectanewtwo-yearsupportivemeasurefromOctober2022applicabletoallhouseholds,settingapricecapthatsavesaverageconsumersaroundGBP1000peryear.NorwayintroducedmeasurestosupporthouseholdconsumersinDecember2021,includingasupportschemewhereconsumersarerebatedhalfofthedifferencebetweentheirpayableelectricitypriceandareferencepriceofNOK70/MWh(USD81/MWh)fortheirelectricityconsumption.Nevertheless,pricesin2022exceeded2021levels.Norway’sgovernmentisconsideringsettingsupplementarytaxesonelectricityexportstoimprovecontroloverdomesticprices.IntheEuropeanUnion,theemergencyinterventionshelpedtopartiallydecouplethedevelopmentofhouseholdpricesandthepriceconsumershadtopay.ThecombinedsupportmeasuresareestimatedtohavereducedaverageretailpricesintheEuropeanUnionin2023byalmost20%,basedondatafromVaasaETT.PAGE74IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026TherecentEUmarketdesignreformaimstoincludemultiplemeasurestotacklesoaringconsumerpricesinthelongerterm,withoutrelyingonstrongmarketinterventionsbygovernmentsexceptinexceptionalcircumstances.Countrylevelmeasuresplayedalargeroleinshapingthefinalconsumerprice.Measuresthroughoutincludedexemptionsfromtaxesandlevies,directsupportpaymentsandsubsidies,pricebrakesandreductionsinVAT.ThemagnitudeofsupportmeasuresacrossEUcountriesin2023varied.InPoland,thegovernmentintroducedaSolidarityShieldthatfixedelectricityprices.Asaconsequence,consumercostswerecutbyabout60%in2023.ThiswasoneofthemostsubstantialreliefmeasuresobservedintheEuropeanUnion,alongwithRomania’spricecapsbyalmost50%inthesameyear.Ontheotherhand,inFinland,BelgiumandGermany,thereliefinpowerpricesin2023throughpublicsupportmeasuresonlyamountedto4-5%.RepresentativehouseholdpricesintheEuropeanUnionincludingandexcludingEUR/MWhsupportmeasures,fromJune2021toDecember20236005004003002001000Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22Jan-23Feb-23Mar-23Apr-23May-23Jun-23Jul-23Aug-23Sep-23Oct-23Nov-23Dec-23Householdprice(excludingsupportschemes)Householdprice(includingsupportschemes)AverageEUwholesaleelectricitypriceIEA.CCBY4.0.Note:Thehouseholdpriceanalysisfocusesongeneralmeasuresaffectingtypicalconsumersandselectedcapitalcitieswhichhaveappliedsuchmeasuresduringtheperiodanalysed.Householdpricesconsidernewtariffoffers,whichareweightedbyelectricitydemand.Averagewholesalepriceisalsodemand-weightedforthesamecountries.Source:BasedondataandanalysisprovidedbyVaasaETT(2023),©2023VaasaETTLtd.PAGE75IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Reliability:MonitoringelectricitysecurityremainsessentialAselectrificationgatherspaceandboththedemandandsupplyofelectricitybecomeincreasinglyweather-dependent,electricitysecurityandreliabilityarebecomingmoreimportantthanever.Manypowersystemsaroundtheworldcontinuetofaceadequacyissuesduringheightenedelectricitydemandinperiodsofextremecoldorheat,alongsideincreasingweather-inducedoutagesanddisruptionsinpowersupplyavailabilities.Everyyear,extremeweathereventscauselargescalepoweroutagesinmanyregions.Insufficientpowercapacityaswellasfuelsupplyissuesduetoelevatedenergycostscontinuetoplagueasignificantnumberofemergingeconomies.Insuchaworld,itisofparamountimportancetomonitorthesecureoperationofelectricitysystemsandkeeptrackofthemeasuresimplementedinthiscontext.Againstthisbackdrop,commencingwiththisyear’sElectricity2024report,wehaveincludedourmonitoringandtrackingoftheglobaldevelopmentsinelectricitysecurityandreliabilityasadedicatedchapter.SpecificmeasuresandmarketsforsysteminertiaarebecomingcommonAspowersystemsdecarbonise,thereisagrowingneedtoexplicitlyprocuretheservicestoensurestablepowersystemoperationthatconventionalgenerationfleetshaveinthepastprovidedbydefaultalongsidetheirelectricityproduction.Tomeetthisrequirement,countrieswithhighvariablerenewablegenerationareincreasinglyintroducingmechanismstomaintaincontroloverpowersysteminertiatokeepasteadyfrequencyastheshareofconventionalgenerationsourcesdeclines.Inthisrespect,someregionshavestartedsettingminimumrequirementsforsysteminertia,typicallyprovidedbyconventionalgeneratorswithspinningrotorsthathelpthepowersystemridethroughdisturbancessuchasfaults.Anumberofcountriesarealsointroducingmarketsforserviceslikefastfrequencyresponse(FFR)thathelpstabilisethepowersystemrapidlyafterdisturbancesandmayhelpreduceinertiarequirements.SuchservicesliketheFFRtypicallyfunctionwithinatimeframeoffewsecondsorless,makingbatteriesanidealtechnologychoiceduetotheirfastresponsetimes.PAGE76IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026Shareofnon-VREsourcesintotalelectricitygenerationinselectedsynchronousareas,2017-2026100%ContinentalNordicGridUnitedKingdomIrelandAustraliaNEM90%Europe2026(excl.Tasmania)80%70%IEA.CCBY4.0.60%50%40%30%20%10%0%201720202023Note:2026figuresareforecastvalues.IntheNordics,afastfrequencyreservewasimplementedinMay2020toaddresslow-inertiascenarios.Therequiredvolumeoffastfrequencyreservesiscontingentontheprevailinginertiawithinthepowersystemandthescaleofthereferenceincident.ProcurementofthisfastfrequencyreservebytheTSOsoccursinnationalmarkets,withmarketparametersvaryingamongNordiccountries.TheUnitedKingdommandatesthatthepowersystemmustmaintainaminimuminertialevel,whichhasbeenreevaluatedannuallysince2021,andcurrentlystandsat120GVAs.DynamicFrequencyContainment(DC)gainedincreasingsignificanceduetotheimperativeofcounterrapidfrequencyfluctuationsfromlowinertia.Thisfast-actingpost-faultserviceisdesignedtomaintainthefrequencywithinthestatutoryrangeof+/-0.5Hzintheeventofsuddendemandorlossofgeneration.Australiaassessestheinertiarequirementsofeachofitsregionsonaregularbasis.InOctober2023,theAEMOlaunchedtwonewfastfrequencyresponsemarketancillaryservicesundertheexistingFrequencyControlAncillaryServices(FCAS)arrangements.Theseare"veryfastraise"and"veryfastlower",eachrespondingwithinaone-secondtimeframeuponactivation.Inaddition,theAustralianEnergyMarketCommission(AEMC)proposedarulechangeon2March2023tointroduceanancillaryservicespotmarketforinertiawithintheNationalElectricityMarket(NEM).Irelandalsoimplementedafastfrequencyresponseservicein2018,aspartoftheDS3programme(DeliveraSecureSustainableElectricitySystem).Thisserviceischaracterisedbythedeliveryofmegawattswithinatimeframerangingfrom0.15to10seconds.AsfastfrequencyresponseservicesdonotdirectlyPAGE77IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026substituteforinertia,Irelandhasadedicatedserviceaimedatprovidinginertiaresponse.ItsSIR(SynchronousInertiaResponse)serviceisdefinedasthekineticenergyofacentrallydispatchedgeneratingunitmultipliedbytheSIRfactor.Thisservicehasvaryingrequirementsdependingonwhetheritisasynchronousgeneratororahybridsynchronouscompensator-flywheel.TheserviceproviderreceivespaymentforeachMWofSIRavailablevolumefortheprovidingunitineachtradingperiodwhensynchronised.InGermany,regulatorBNetzAwasconsultedin2023onamarket-supportedprocurementmodelforinertiaservices.Thecurrentproposalconsidersafixedpremiumpaymenttobepaidtoprovidersofinertia.Thefixedpricewouldbesetbythetransmissionsystemoperators(TSOs)andmaydifferamongdifferentregionsthroughoutthesystem.The2021coalitionagreementstipulatedthedevelopmentofaroadmapforsystemstabilityundertheleadoftheFederalMinistryforEconomicAffairsandClimateAction(BMWK).TheroadmapwaspublishedinDecember2023,withadiscussionpaperongridfrequencyalsomadeavailable,whichfocusesonpotentialmeasuresforprovidingsysteminertia,complementarymethodssuchasfastfrequencycontrolamongothertypesofmechanisms,andtheassociatedchallenges.Inparallel,adiscussionpaperonvoltageandanotheroneonresonancestability,angularstabilityandshort-circuitcurrentwerealsopublished.IntheUnitedStates,since2016ERCOT’scontrolroomhasbeenmonitoringinertialevels,andoperatorshavebeentakingactionstoincreasecriticalinertiaabove100GWswhenneeded.In2020,theNorthAmericanElectricReliabilityCorporation(NERC)underscoredthecriticalimportanceoffasterfrequencyresponsetoaddressthedeclineininertia,especiallyinsmallerinterconnectionswithinNorthAmerica,suchasTexasandQuebecinterconnections.InOctober2022,theERCOTsystemunderwentupdatestoimplementchangesassociatedwiththeFastFrequencyResponseAdvancementProject.Extremeweathereventscausedlarge-scalepoweroutagesin2023Extremeweathereventstriggeredmajorpoweroutagesacrossmultipleregionsin2023.Severestormscausedlarge-scalepowersupplyinterruptionsinanumberofcountries,highlightingtheneedtoincreaseresiliencyagainstthegrowingweatherimpactonpowersystems.IntheUnitedStatesanicestormresultedinamajorpoweroutagefor400000consumersinlateJanuary.TheTexanpowerpubliccompany,AustinEnergy,replacedtheexposed101distributionpolesand52transformerswhichwereundertreesandice.Thegradualpowerrestorationwasdelayedfortendaysduetothechallengingweatherconditions.Onemonthlater,MichigansawoneofitsPAGE78IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026worsticestorms,leaving800000customerswithoutpowerafterelectricitylinesweredestroyedbyfallentrees.Morethanhalfofthecustomershadtheirelectricityrestoredafteronedaybutothershadtowaitaweek.DuringApril,anicestormleft1.3millionhouseholdswithoutpowerinQuebec,Canada.Fallentreestookdownmanypowerlineswhilegradualrecoveryofpowerrequiredthereplacementof50kmofpowerlinesand440transformersoversixdays.Toprepareforfutureevents,utilitiesidentifiedthedamagedinfrastructureduetofallentreesandheavysnowastherootcauseoftheirrecentoutagesanddevelopedactionplanstoaddressthem.Shieldingtheassetsagainstharshicestormsincludesmainlyburyingpowerlinesandtreetrimmingprogrammes.Detroit-basedutilityDTEEnergyreportedlyspentUSD200millionreplacingelectricequipmentandlinepoststorecoverfromtheicestormandwillinvestUSD9billiononits5-yearweather-resilienceplan.Theinvestmentcostistobereflectedinconsumers’electricitybillslinkedtoariseofupto3%oftheircurrentexpenses.InJune,USsouthernandGulfCoaststatesfacedseverethunderstorms,tornadoesandheavyrain.Morethan600000householdsandbusinesseslostelectricityserviceforatleasttwodaysinfourstatesduetodamagedinfrastructure.Amongthestates,Texasmanagedtorestoreservicefor300000usersaftertwodays.Theutilityservingmostoftheaffectedconsumers,SWEPCO,repairedfallentransmissionlines,approximately60transmissionanddistributionsubstationsandreplaced114transformers.StormsintheUSnortheasternregioninDecember2023resultedinmajorpoweroutagesfor400000customersinMaine,over260000inMassachusettsandmanymoreintheotherfoursurroundingstates.Strongwindsandseverefloodsbrokeelectricitypolesanddamagedtransformers.Mostofthepowerwasreestablishedafterthesecondday.WesternFranceandtheUK’ssouthernregionwerehitbywindstorm“Ciarán”inNovember,leavingmorethan1.2millionconsumerswithoutpowerforoneday,whileapproximately36000householdshadtheirelectricityreestablishedafteroneweek.InFrance,distributioncompanyEnedisiscurrentlyworkingonamodernisationplantoimprovetheirnetwork’sclimateresilienceandadaptationtolow-carbonsourcesofelectricity.Theplantargetsnewundergroundnetworks,replacementofexposedlineswithtougherorundergroundcables,andnewsubstationsby2050.ThestateofGujaratinIndiawashitbyCycloneBiparjoyinJune.ThetropicalcyclonecausedpoweroutagesandseveredamagestotheelectricitynetworkvaluedatINR10billioninpowerlines,transformersandotherequipmentalongthetransmissionanddistributioninfrastructure.Powerwasgraduallyrestoredafteraweek.Asecondcyclone,Michaung,hitIndiainDecemberinthesoutheastPAGE79IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026stateofAndhraPradesh.Severaldistrictswerefloodedandpowersupplywasinterruptedforaweekinanothercaseofdamagedinfrastructure.India’sdistributionsystemoperator(DSO)BESCOMinthestateofKarnatakascheduleddailyoutagesformaintenanceworkduringDecember.Powercutsatanaveragedurationofsixhourstocarryoutmaintenanceinanalternatingroutineaffectedeightdistrictswithatotalofpopulationof20millionpeople.SupplyandgridissuesledtomajoroutagesmostlyinemerginganddevelopingcountriesIn2023,adequacyproblems,fuelsupplychallengesandgrid-relatedtechnicalissuescontinuedtocausemajorpowershortagesinmanyregions.Themajorityofthelarge-scalepoweroutagesstemmingfromthesecauseswereobservedinemergingeconomies,whichareparticularlyaffectedbyashortfallofelectricitysupply,infrastructureproblems,andstrainedgridsinthefaceofrisingelectricitydemand.Oneofthemajorblackoutsof2023occurredon23JanuaryinPakistan,resultingfromoverloadedtransmissionlines,causingavoltagedrop.Simultaneously,thenorthernregiongrappledwithreducedpowergenerationduetoplantoperatingissues.Thesecombinedfactorsledtoanuncontrollablepowerswingthatresultedinanationwideblackoutaffecting220millionpeopleforover12hours.Notably,thismarkedthesecondoccurrencewithinayear,withapriorincidenton13October2022causingacompleteblackoutinthesouthandapartialblackoutinthenorth,resultinginalossofover8000MW.AfteranalysisoftheearlyJanuaryincidentwasconducted,asetof18recommendationsweremadebyPakistan’sNationalElectricPowerRegulatoryAuthority(NEPRA).ThelisthighlightedthatmodernequipmentinstallationisrequiredtodetectoscillationsinstabilityandimprovementoftheHVDCandVARcompensationsystemsisneededtoavoidoperationalfailuresandensurethecorrectoperationoftheblackstartfacilitiestoachievetimelypowerrestoration.Thisnewlistaddstotheongoingimplementationsoftheactionsrecommendedfromthelate2022blackout,includingtheperformanceassessmentofagedtransmissionlinesbeforeconnectingtonewpowerplants.On25August2023,Kenyaexperiencedamajorpoweroutage,impactingover50millionpeople,withpowerbeingrestorednearly24hourslater.Thecauseofthisoutageremainsuncertain.ThisincidentmarkedKenya'sfifthnationwideblackoutinthepastfouryearsandisnotedasoneofthelongestonrecord.KenyanssawanothernationwideoutageearlyDecember.Theeventlastedlessthanadaybutitwasthethirdmajorblackoutinfourmonths.Inresponsetotheworseningsituation,thenationalpowercompany,KenyaPower,scheduledpowerPAGE80IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026interruptionsthroughoutDecemberasaloadsheddingstrategywhileallowingformaintenanceandmodernisationoftheinfrastructure.Nigeriaenduredanationwideblackoutlastingapproximatelytenhourson14September2023.Thegridcollapsedduetoafireonamajortransmissionline.Thecountryhasgrappledwithrecurrentpowerfailures,totalling46gridcollapsesbetween2017and2023.Nigeria’sgridcontinuestofaceissuesduetoagedinfrastructureandvandalism.PowercutsoccurredinEgyptduringthesummerandlate2023duetoacombinationofgasshortagesandincreasedenergyconsumptionamidhightemperatureoverloadingthegrid.AnationaldailyloadsheddingstrategywasinplacesinceJuly2023,withscheduledpoweroutageslastinguptotwohours.FromNovemberon,poweroutageshavebeenreducedtoone-hourduration.AmajorblackoutstruckBrazilon15August2023,lastingsixhoursandaffectingover29millionpeopleduetoavoltagedropfromatransmissionlinefailure.Theblackout'sprimarycausewasequipmentmalfunctioninthestateofCeara,whichunderperformedcomparedtopredictionsinmathematicalmodelsandsimulations.OperadorNacionaldoSistemaElétrico(ONS)pointedoutthattheissuewasnotrelatedtothetypeofpowersource.InQuebec,Canada490000buildingslostelectricityserviceforseveralhoursinAprilduetoamaintenanceincidentderivingfromalossofproductionfromaturbineata5GWhydropowerplant.InsouthernFrance,atwo-hourpoweroutageaffected260000householdsduetoasystemoverloadinOctober.RTE,thegridoperator,reportedthisoverloadasanexceptionaltechnicalfailurewithoutmajorconsequences.Outagesandroutinepowercutoffssince2022havebeenoccurringinmajorcitiesandsurroundingprovincesoftheinterconnectedcountriesofKazakhstan,KyrgyzstanandUzbekistanduetogridimbalances,e.g.systemoverloads.During2023,controlledfrequentblackoutswithadurationofuptofivehourshavebeeninplaceinwesternKazakhstanwhileregionalauthoritiespreparedaprioritypowersupplystrategy.TheoilandgasexportingKazakhstanhasbeenrecentlyseekingtomoderniseitsageingpowergridinfrastructureaftergasexportshavebeeninterruptedbydomesticenergycrises.PAGE81IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026TotalnumberofdayswithloadsheddingandmaximumeveningpeakdemandpermonthinBangladeshbetweenJanuary2020andNovember20233521NumberofdaysGW3018251520121591065300TotalnumberofdayswithloadsheddingMaximumeveningpeakdemand(rightaxis)IEA.CCBY4.0Source:MonthlyManagementReport,PowerGridCompanyofBangladesh.SriLankahadanationalblackoutinDecember2023.Powerdisruptionspersistedforsixhoursonaccountofasystemicfailureduetoalightningstrikeonacriticaltransmissionlineinthecountry.Severalothercountrieshavestruggledwithpowersupplychallengesin2023withoutexperiencingfull-scaleblackouts.Bangladeshfacedincreasedpowercutsduetorisingdemandexacerbatedbyunpredictableweatherpatternsandfuelshortages.Indiaencounteredpowershortagesdrivenbyhighertemperaturesanddecreasedhydroelectricoutput.Peakpowerdemandreached223GWinJuneamidsoaringtemperatures,withpoweroutagesobservedinthenorthernstates.InMadagascar,rollingpowercutswereimplementedduetolowwaterreservoirs,reducedsolarenergyandfuelshortagesduringthewintermonths.YemenhadtoshutdownpowerstationsduetofuelshortagesinAugust.SouthAfricacontinuedtohaveloadsheddingin2023duetosupplychallenges,withthetotalvolumeofloadsheddinguptotheendofSeptemberalreadybeinghigherthanthetotalvolumeofloadsheddinginthepreviouseightyearstogether.UnderstandingthehumanfactorinpowerdisruptionsandoutagesTherecentIEAreportElectricityGridsandSecureEnergyTransitionsshowedthatgrid-relatedtechnical/equipmentfailuresalonecauseatleastUSD100billioneconomicdamagesperyearglobally.Thisunderlinestheneedtobetteridentifythecauseoffailuresandthecomponentsinvolvedinthem.Theoriginandthecomponentscausingapoweroutagecanvarybetweencountries,dependingonPAGE82IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026theuniqueconditionsandstructureoftheirpowergrid.Poweroutagescanbeduetoagenerationanddemandimbalance(e.g.fuelshortages,powerplantoutagesorinsufficientadequacy)orgrid-relatedissues.Grid-relatedcausesforpoweroutagescanbecategorisedintothreemaingroups:naturalcauses,humanerrorandtechnical/equipment-relatedissues.Human-relatedfactorssuchascarcrashesinvolvingpolesandtransformers,poorworkmanship,errorsduringnewconnections,vandalismandcyberattackscanleadtodisruptionsinthepowersupply.Inmanyregions,thesefactorsaresignificantcausesofpoweroutagesanddeservemoreattention.Betterstandardisation,digitalisationandtrainingcanhelpminimisehumanerrorsDatatransparencyonthedetailedreasonsofpoweroutagesisgenerallylimited.Whileseveralcountriespublishdataonpoweroutages,exactcausesandtheassociatedequipmentofoutagesaregenerallynotprovidedindetail.Chileisoneofthefewcountrieswhereadetaileddatasetonthecausesof(transmission-level)outagesandtheassociatedequipmentareprovided,whichmakesforaninterestingcasestudy.OuranalysisofChile’stransmission-levelpoweroutagesin2021showsthatone-thirdofthereportedoutageswereduetohumanerrorsorhuman-relatedincidents.Poorworkmanshipisreportedasamajorcause.Amongtheoutagesthatresultedfromprotectionsystems,causesincludeerrorsinparameterprogramming,connection-relatedissues,orhardwaremalfunctions.Mostpoweroutagesassociatedwithbusbarsandpointsofconnectionarereportedlyduetopoorworkmanship,witherrorsduringmaintenanceoroperationalwork,orfaultscausedbycutdistributionconductors,controlunitissuesandoverloads.Onthetechnicalside,outagescanstemfromadiversesetofcomponentandequipmentfailures.IntheexampleofChile,ouranalysisoftransmission-leveloutagesshowsthatthemaincausesofincidentsarerelatedtopowerlines,whichmadeupabouthalfofthealmost400reportedoutagesin2021.Outagesarisingfrompowerlinesareoftenduetoshort-circuitsstemmingfromweather,animalandtree-relatedevents.Short-circuitscanariseduetobranchestouchingpowerlinesorstormstakingdowntrees.Consequently,electricalcurrentsurgestriggertheactivationofprotectionmechanismstode-energizethesystem.Otherequipmentcausingoutagesaretheprotectionsystems,busbars,substations,transformers,circuitbreakersandpointofconnections.PAGE83IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026PoweroutagesatthetransmissionlevelinChilein2021bycause(left)andassociatedelectricalequipment(right)Numberofrecordedincidents160Nature7%Line140Tree9%Protectionsystem120AnimalBusbar100Weather10%Substation10%52%Two-windingtransformer80HumanCircuitbreaker60ConnectionPointofconnection40CrashThree-windingtransformer20PersonSynchronousgeneratorPoorworkmanshipCurrenttransformer0SewerDisconectorNatureTheftHumanTechnicalTechnicalFaultFireUnknownIEA.CCBY4.0Note:ThedataisclusteredbytheIEAaccordingtothereasonsprovidedintheoriginalsource.Source:IEAanalysisbasedondatafromUnavailabilityindices,CoordinadorElectricoNacional.Humanerrorinpoweroutagesisauniversalphenomenon.Approximately5%ofoutagesareattributedtohumanerrorintheUnitedStates.In2023,humanerrorledtoa48-minutepoweroutageonHongKong’sLongIsland.Incidentslikethisunderscoretheneedtoreviewmaintenanceproceduresandstafftraining.Forexample,HKElectricproposedtoimprovethemanagementproceduresofthe48-minutepoweroutageincidentafterconductinganinvestigation.Thelistofproceduresidentifiedtoupdateweretheenergymanagementsystemcircuitdiagrams,qualitycontroloftransmissionconstructionandmaintenanceworks,on-siteequipmentcriticalinspections,andtechniciantrainingandqualificationrequirements.Thishighlightstheneedtoconsiderhumanfactorswhendeterminingmaintenancepolicies.Tominimisetheshareofhumanerrorsinpoweroutagescomplimentaryapproachesareadvantageous.Leveragingtechnologytodigitaliseandautomateprocessescaneffectivelyreduceevaluationtimewhileimprovingtheoutcomes.EmployingAIinrepetitiveandmanualtaskssuchaspowergridinspectionsenablestheidentificationofdiscrepanciesthatcouldresultinpoweroutagesandevenreducewildfirerisksrelatedtoelectricequipment.Forexample,theAmericanPacificGas&ElectricCompany(PG&E)inCaliforniahasbeenusingdronestoremotelyconductinfrastructureinspections.TheutilityissavingcostsandtimewhileimprovingoperatorsafetybycommissioningdroneswithcamerasthatuseAI-poweredalgorithmstoscanthearea.AI-basedsoftwarecanalsobeusedforpreventivemaintenancepurposes.Itcan,forexample,identifyvulnerabilitiesinpowergridsaswellasmeasureeconomicbenefitsusingvastamountsofhistoricaldataandclimatemodelstomakegridfailurepredictions.Otheroptionstomitigatepoweroutageincidencesareincreasedstafftrainingandstandardisation.StaffcertificationisamethodtoensureastandardisedandsafePAGE84IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026approachtomaintainandrepairinfrastructure.Locallevelandinternationalcertificationsprovideupdatedknowledgeandskillstofollowsafeandprovenprotocolsinelectricalinstallationandmaintenance.Greaterdatatransparencyondistribution-leveloutagescanprovidebetterinsightintothecausesMostoutagesoccurduetodistributionlevelissues,whichcanrepresent80%oftotalcustomerserviceinterruptions.Usually,thesepoweroutagesimpactsmallerareasandfewerpeoplecomparedtotransmission-levelincidents.Detaileddataondistribution-levelincidentsisgenerallynotpubliclyavailable,limitingsystematicanalysis.Türkiyeisoneofthefewcountrieswheredetaileddataonpoweroutageswithhightemporalandlocationalgranularityismadepubliclyavailable.TheDSOsinTürkiyesystematicallycollectoutagedata,whicharecentrallygatheredandpublishedontheEPİAŞtransparencyplatform.OurclusteringandanalysisofpoweroutagedatainTürkiyeshowsthatoftheunplannedoutagesreportedfor2021atthedistributionlevel,about80%werereportedastechnical/equipment-related,followedbynaturalcausesandhumanfactors.Amonghuman-causedincidents,issuesduringnewconnectionswerethemaincauseinmostofthereportedoutages.Thisisfollowedbythird-personinvolvement,whereaccidentaldamagingofequipmentduringconstructionworksbutalsovandalismarecommon.Mentionedatasmallerscale,poorworkmanshipwasalsocitedasacause.AccordingtotheTurkishstatistics,equipmentcommonlyassociatedwithdistribution-leveloutagesincludespowertransformers,instrumenttransformersandcables.UnplannedpoweroutagesatthedistributionlevelinTürkiyebycause,2021Numberofrecordedincidents2000001000000Nature160000800000TreeIEA.CCBY4.0.120000600000Animal400000Weather80000200000400000HumanConnection0TechnicalCrashPersonNatureHumanPoorworkmanshipConstructionTheftTechnicalFaultFireUnknownIEA.CCBY4.0Note:ThedataisclusteredbytheIEAaccordingtothereasonsprovidedintheoriginalsource.Source:IEAanalysisbasedondatafromEpiaşSeffaflıkPlatformu(2021),OutageInformation.PAGE85Electricity2024GlobaltrendsAnalysisandforecastto2026VandalismandcyberthreatstotheelectricitysystemareincreasingTheUSpowergridiscurrentlyfacingasurgeinphysicalattacks,whichhasreachedadecadehigh.Nearlyhalfofthe4493attacksrecordedin2020to2022weretargetedatsubstations,accordingtoaFebruary2023briefingfromNERC.Thiswaveofattacksresultedinoutages,promptingcallsfrombothstateandfederallawmakersforenhancedsecuritymeasures.Inresponse,statelawmakersinNorthCarolinahavepassedanamendment,effectiveJuly2024,thatwillmandatepublicutilitiestooperatea24-hoursecuritysystematsubstationswhilestricterpenaltieswillbeenforceduponelectricutilityinfrastructuredamage.Whilephysicalattackshavecapturedheadlines,thecyberthreatisalsoagrowingconcern.Between2020and2022,theaveragenumberofcyberattacksagainstutilitiesworldwidemorethandoubled.Aspowersystemsevolveinlinewithdigitalisation,protectionagainstcyberthreatswillbecomeincreasinglymoreimportant.Governmentsaredevelopingregulationstosafeguardtheintegrityofinformationandcommunicationstechnology(ICT)againstanyactionthatcompromisethem.Shareofpoweroutagescausedbyvandalismandcyberattacksintotalreportedtransmission-leveloutagesintheUnitedStates,2013-202360%50%40%30%20%10%0%20132014201520162017201820192020202120222023VandalismCyberattackIEA.CCBY4.0Notes:Vandalismincludesoutagesreportedwiththecauseslistedasphysicalattack,sabotage,andsuspiciousactivity.Cyberattackincludesoutagesreportedwiththecauseslistedascyberattackandcyberevent.Source:IEAanalysisbasedondatafromElectricDisturbanceEventsAnnualSummaries,U.S.DepartmentofEnergy.BetweentheperiodofJuly2022toJune2023,ICTintheEuropeanUnionunderwentapproximately2580cyberattacks,mainlytoransomware(34%),DistributedDenial-of-Service(DDoS),knownforblockingasystemtoaccessrelevantdatabyoverloadingcomponentsofthenetwork(28%),anddataPAGE86IEA.CCBY4.0.Electricity2024GlobaltrendsAnalysisandforecastto2026breaches(17%).Theseincidentshaveexperiencedamonthlygrowingtrendof15%withinthesametwo-yearperiod,startingfrom125reportedincidentsinJuly2022to607casesbyJuly2023.Fromthetotalnumberofcyberattacks,190werereportedlydirectedattheenergysector.InApril,amalwaretargetingthepowergridwasdiscoveredtobewithintheoperativesystemsofdifferentpowerprovidersinEurope,theMiddleEastandAsia.TheEU’sNetworkandInformationDirective(NIS),adoptedin2016,identifiescriticalentities–generators,retailers,TSOsandDSOs–andsetsaseriesofmeasurestomaintainthereliabilityandsecurityoftheinvolvedICTaswellassettingco-operationplatformstofurtherimprovecybersecurity.InOctober2023,theNISwasmodernised.Thedirective,NIS2,extendsitspredecessor’sscopeandistobefullyimplementedbylate2024.Inthisupdatenewentitiesarelistedascritical,suchasrechargingpointoperatorsandvariouselectricitymarketparticipants,aswellasreinforcingcybersecurityrequirementsalongtheirsupplychain.Additionally,inSeptember2023,theEuropeanCommissionunveilednewplansurgingEUcountriestoenhancecollaborationoncross-borderthreatsandstrengthenco-operationwithNATO.Since2013,theUSFederalEnergyRegulatoryCommission(FERC)setmandatorycybersecuritycontrolstotheCriticalInfrastructureProtectionreliabilitystandards.In2022theDOEpublishedtheirvoluntaryframeworktomitigatecyberattacksintheenergysector.Itprioritisescybersecurityconsiderationsatallstagesofenergysystems,fromtheirconceptualisationtotheirdecommissioning.FERCapproved,inMarch2023,newcybersecuritystandardstoimprovethereliabilityoftheevolvingpowergridbyexpandingthesecuritycontrolsoflesscriticalgenerationandtransmissionfacilities.Thesestandardsrequiretheoperatorstohavethemeanstodetectanddisablevendorremoteaccessincaseofcyberattacks.ThiswasfollowedinSeptember2023bytheDOEawardingfundingtotallingUSD39millionforresearch,developmentanddemonstrationprojectstoimprovecybersecuritytoolsandtechnologiesofdistributedenergyresources(DER).PAGE87IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026RegionalfocusAsiaPacificRenewablesmeetgrowingshareofelectricitysupplybutcoalremainsthemajorsourceElectricitydemandinAsiaPacificroseby4.8%in2023,andprovidedmostoftheadditionalgrowthinglobalelectricityuse.Demandisforecasttorisebyanaverageannual4.6%from2024to2026,withChinaexpectedtoprovidecloseto70%ofgrowthintheregionby2026.AsiaPacific,whichaccountsforjustover50%ofglobalelectricityconsumption,willseerenewablesshareofpowergenerationrisefrom27%to35%in2026butcoal-firedpowerremainsthemajorsourceofsupply.In2023,coalaccountedfor57%oftheregion’selectricitygeneration,withlow-carbonsourcessuchasnuclear,hydro,solarandwindcontributingfor32%ofthemix.Duetoitsstrongrelianceoncoalforpower,AsiaPacifichasthehighestelectricitygenerationCO2intensityofouranalysedregions,at590gCO2/kWhin2023,comparedtoaglobalaverageof455gCO2/kWh.Theregion’semissionsfromelectricitygenerationareexpectedtorecordslightincreasesof0.2%in2025-2026,afteradeclinein2024duetoanassumedrecoveryinhydropower.Year-on-yearpercentchangeinelectricitydemand,AsiaPacific,2019-202615%10%5%0%-5%-10%-15%202020222024202620202022202420262020202220242026202020222024202620202022202420262020202220242026ChinaIndiaJapanKoreaAustraliaSoutheastAsiaHistoricaldemandUpdatedforecastPreviousforecast(July2023)IEA.CCBY4.0.PAGE88IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026ChinaProductionofsolarPVmodulesandbatteries,andprocessingofrelatedmaterialsaresignificantdriversofelectricitydemandInChina,thepost-pandemiceconomicrecoverypavedthewayforastrongincreaseinelectricitydemandof6.4%in2023,withtheservicesandindustrysectorsexperiencingthemostrobustrebound.Withthecountry’seconomicgrowthexpectedtoslowandshiftawayfromheavyindustry,weforecastthepaceofelectricitydemandgrowthtoeaseto5.1%in2024,4.9%in2025and4.7%in2026,whichiswellbelowtheaveragegrowthrateof6.5%observedoverthepre-pandemicperiodof2016-2019.ElectricityconsumptionpercapitainChinasurpassedthatoftheEuropeanUnionattheendof2022.Thisis,however,proppedupbytheindustrysector,aselectricityuseperhouseholdisstillbelowthatintheEuropeanUnion.TherisingconsumptionofelectricitybyChinesehouseholdswillremainadriverofelectricitydemand.ContinuedelectrificationofChina’sindustrialsectorandstronggrowthinroadtransport(EVcharging)accountsforanincreasingshareofChina’selectricitydemandovertheforecastperiod.TherapidadoptionofEVs,whichnowaccountforover8%ofthevehiclesinthecountry,ismarkedlyerodinggrowthingasolineconsumptioninfavourofelectricity.Adownwardtrendinthecementandglassindustriescanbeobservedsince2021,whichisrelevantfortheconstructionsector.Bycontrast,manufacturingofPVmodules,EVsandprocessingofassociatedmaterialsweresignificantdriversofgrowthinelectricitydemandintheindustrysectorinrecentyearsandwillremainonasolidupwardtrend.IndexedproductionoutputinselectedindustriesinChina,2015-2023980201720192021PVcells160201720192021Primary870150plastic760Li-Ion140Non-ferrous650batteries130metals540120430Integrated110Glass320circuits100Crudesteel210Paper100202390Motor80vehicles2015Chemicals2015FerroalloysCement2023IEA.CCBY4.0.Note:Non-ferrousmetalsincludecopper,aluminium,lead,zinc,nickel,tin,antimony,mercury,magnesium,andtitanium.Source:IEAanalysisbasedondatafromNationalBureauofStatisticsofChina.PAGE89IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Renewablesandnucleararesettomeetallofthegrowthinelectricitydemandin2024-2026,curbingcoal-firedgenerationHydropowergenerationdeclinedsignificantlyin2023,by5.6%year-on-year,duetoseveredroughts,whichledtoariseincoal-firedgenerationof6.2%.Asaresult,60%oftheincreaseinelectricitydemandin2023wasmetbycoal-firedsupply.AlthoughwindandsolarPVoccupyagrowingshareinthegenerationmix(15%,uptwopercentagepointscomparedto2022),theincreaseinthermalgenerationledtoa6.2%increaseofelectricitysectoremissionsin2023.Assumingnormalweatherconditionsandarecoveryinhydropoweroutput,totalrenewablegenerationisexpectedtoincreaseby21%in2024.Overthe2025-2026period,weexpectanannualgrowthof13%onaverageamidcontinuedstrongexpansionofsolarPVandwindgeneration.Renewableenergysourcesareexpectedtomeetalmostalltheincreaseinelectricitydemandinourforecastperiodandstartdisplacingcoal-firedgenerationtogetherwithincreasingnucleargeneration.Asaresult,weforecastanaverageannualdeclineofaround1.5%incoal-firedgenerationover2024-2026,withcoal’sshareintotalgenerationcontractingfrom62%in2023to51%in2026.Theweatherandtheextentoftheslowdownindemandgrowthremainthemainsourcesofuncertaintyintheforecastperiod.Year-on-yearchangeinelectricitygenerationinChina,2019-20261000TWh20192020202120222023202420252026800600IEA.CCBY4.0.4002000-200CoalGasNuclearOthernon-renewablesRenewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.PAGE90Electricity2024RegionalfocusAnalysisandforecastto2026Coal’sroleischangingfromasourceofbulkgenerationtoamoreflexibleoperationtosupportrenewablesandensureenergysecurityOurforecastshowsadecliningtrendincoal-firedgenerationthrough2026,despiteawaveofnewcoalprojectsthathavebeencommissionedorpermittedsince2022.Weexpect40to50GWofnewcoal-firedpowerplantcapacitytobeaddedannuallyfrom2024through2026.Astheshareofrenewablesrises,theroleofcoal-firedplantsischangingfromprovidingbase-loadsupplytomoreflexibleoperation.Theaveragecapacityfactorofcoal-firedpowerplantsinChinahascomedownfrom61%in2010to53%in2023,andthistrendissettocontinue.Governmentauthoritiesannouncedanewcapacityremunerationmechanismforcoalpowerplants,startinginJanuary2024,whichaimstohelpthemrecoverpartoftheirfixedcostsaslow-carbongenerationmeetsanincreasingshareoftheload.Energysecurityremainsasignificantissue.Followingpoweroutagesin2021and2022,concernsemergedatthebeginningofthesummerof2023thatthecountrywouldstruggletokeepthelightsonamidrecordheatwaves.Summerpeakloadreachedhistorichighsof1340GW,up50GWcomparedtothepreviousyear.Droughtsandhigherthannormaltemperaturesfromwinter2022tospring2023resultedinexceptionallylowwaterreservoirlevels.Thegovernmentimplementedpoliciestoboostdomesticcoalproductionandimports.Whilethecentralgovernmentpledgedtostoppermittingcoalplantssolelyforbulkgeneration,provincescontinuetoapprovenewprojectsforeconomicstimulusand,amidenergysecurityconcerns,tomeetpeakloadandaddressalackofflexiblegenerationanddemand.BuildingcoalpowerfacilitiesnearlargewindandsolarbasesinwesternChinaisalsoastrategytoensurehigherutilisationratesonultra-high-voltage(UHV)linesexportingpowertoeasternregions.Morethan40GWofthermalplantswerecommissionedduringthefirsttenmonthsof2023,surpassinginstallationratesobservedoverthepast13years.Gas-firedgenerationisforecasttogrowatanaveragerateofaround4%overourforecastperiod.WhiletheeasingoftheLNGmarketfrom2025onwardduetomoreliquefactioncapacitycomingonlineisexpectedtoputdownwardpressureongaspricesandboostgas-firedgeneration,themassiveexpansionofrenewableswilltemperitsgrowth.WeexpectnucleargenerationinChinatogrowannuallyby4%onaverage,asnewreactorsstartcommercialoperations.RecordrenewablesuptakebringsnewchallengestothepowersectorIn2023,newlydeployedsolarPVcapacitybrokerecords,with130GWofsolarinstalledduringthefirstthreequarters–primarilyintheformofdistributedPAGE91IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026projects.ThenewcapacityisequivalenttotwicethecombinedsolaradditionsoftheEuropeanUnionandtheUnitedStatesin2022.Thiscapacitysurgeresultedinamassive29%increaseinsolargenerationin2023.SolarPVcontinuestodominaterenewablecapacityexpansionbutitwillstilllagbehindwind-generatedelectricityto2026.AsofDecember2023,grid-connectedsolarPVandwindcapacitywasclosetoreachingthesymbolicmilestoneof1000GWattheendof2023.Thisrapidinstallationpacewillenablethecountrytomeetthe14thFive-YearPlantargetofdoublingannualwindandsolarpowergenerationfrom2020byasearlyas2024.However,gridintegrationchallengesatthedistributionlevelcouldlimittherateofrenewablescapacitygrowthinsomeregions,asobservedineasternprovinceslikeHebei,ShandongandHenan.Gridsaturationhasledsomelocalitiestolimittheapprovalofnewdistributedrenewableprojectsuntilgridupgradesarecompleted.Moreover,fallingpricesacrosstheentiresolarPVindustrychain,drivenbyfiercecompetitionandmanufacturingovercapacity,couldalsohinderinstallationratesassomemajorsolarcompaniesarealreadyreportingdecliningprofits.Similarly,topChinesewindmanufacturershaveincurredlossesamidplummetingprices,despitethegrowthinnewlyinstalledcapacity.Ensuringadequateelectricitysupplyduringsummerandwinterdemandpeaksremainsatoppriorityforthegovernment.TheNationalEnergyAdministration(NEA)hasforecastatightpowersupplyanddemandbalanceforthe2023/2024winterperiodinsomeprovinces,withananticipatedpeakload140GWhigherthanlastyear.Policiesandpilotprojectsrelatedtopeakloadmanagementandvariablerenewableenergy(VRE)integrationarebeingpromoted,andanewmeasurenowrequiresdemand-sideresponsetocover3-5%ofthepeakloadofeachprovinceby2025.NewpoliciestofacilitategrowthinrenewablesunveiledMajorpoliciesimpactingthepowersectorwereintroducedin2023.TheGreenElectricityCertificates(GECs)marketisexpectedtosoarafteranannouncementthattheschemeisexpandedtocoveralltypesofrenewablesandthatGECsbecomethesolecertificationfortheproductionandconsumptionofgreenelectricityandtheonlyproofofenvironmentalattributes.SomerenewableprojectswillalsobeeligibletoissuecarbonoffsetsundertheChinaCertifiedEmissionReductions(CCER)scheme,whichisabouttorelaunch.Thereiscurrentlyalackofclarityonhowoverlapsbetweenthetwoschemeswillbemanagedtoavoiddouble-counting.Finally,althoughtheshareofelectricitytradedonspotmarketsremainslimited,progressonprovincial,regionalandinterprovincialpilotspotmarketsisongoing.InSeptember,theNEAreleasedthefinalversionofthespotmarketrules,markingthefirstnationalstandardsissuedforspotmarketdevelopment.PAGE92IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026IndiaCoal-firedsupplyremainsthemainstay,buttheshareofrenewablesinelectricitygenerationisexpectedtoreachthe25%markin2026Non-fossil-fuelledcapacityaccountedfornearly44%oftotalinstalledcapacityinQ32023,withcloseto21GWofrenewablesaddedduringtheyear.Renewablegenerationremainedrelativelystablewitha21%shareofelectricitygenerationin2023,withariseinsolarandwindlargelyoffsetbyreducedhydropoweroutput.India’selectricitydemandin2023washeavilyinfluencedbyvaryingweatherpatterns.ThecountryexperiencedthedriestAugustinover100yearsandpowerdemandsoared,surpassing240GWon1Septemberamidincreasedspacecoolingdemand.Thehigherdemandandlowavailabilityofhydropowerresultedinthegovernmentdirectingallgenerationcompaniesandindependentpowerproducers(IPPs)toextendthemandateofblendingaminimumof6%ofimportedcoalwithdomesticcoaluntilMarch2024toensureuninterruptedpowersupply.Electricitydemandrose7%in2023,withgrowthforecastatcloseto6.5%onaveragein2024-2026.Tomeetrisingdemand,about80GWofadditionalthermalcapacityisneededinthenextdecadeaccordingtothegovernment.Coal-firedgenerationwillremaindominantbutisexpectedtofallfrom74%oftotalelectricitygenerationin2023to68%in2026.Renewableenergygenerationisforecasttogrowfromaround21%ofthemixtoreacha25%sharein2026.Year-on-yearchangeinelectricitygenerationinIndia,2019-2026200TWh20192020202120222023202420252026150100IEA.CCBY4.0.500-50-100-150-200CoalGasNuclearOthernon-renewablesRenewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.PAGE93Electricity2024RegionalfocusAnalysisandforecastto2026Hydropower,nuclear,storageandincreasedpowersystemefficiencyarehighontheIndiangovernment’sagendaIndiasawamassive15%fallinhydropowergenerationin2023comparedtoayearearlier,whichresultedinshortagesandoutagesinseveralpartsofthecountry.Forexample,thestateofKarnatakahadpowershortagesofapproximately1500-2000MWlinkedtoinsufficientrain.Inadditiontopromotingwindandsolargenerationinthecountry,thereisrenewedfocusondevelopinglargehydroandnuclearpowerplantsforbaseloadandbalancingofthegrid.Tosupporthydropowerdevelopment,over12stalledhydroprojects(11.5GWtotalcapacity)thatwereawardedtoprivatesectorcompanies15yearsagoweretransferredinAugust2023tocentralpublicsectorentitiesundertheMinistryofPower,toenabletheprojectstoadvance.InamilestoneforIndia,itslargestdomesticallybuiltnuclearpowerplant,the700MWeKakraparUnit3reactor,commencedoperationsinGujaratinJune2023,andreachedfullcapacityinAugust.Basedonthecountry’sprojecttimeline,weexpectnuclearpowergenerationtoincreaserapidlyduring2024-2026,withnewplantstotallinganestimated4GWofcapacityenteringcommercialoperationovertheperiod.Indiacurrentlyhas23operablenuclearreactorsprovidingabout2%ofthecountry’selectricity.WeexpectIndia’sshareofvariablerenewableenergy(VRE)generation(windandsolarPV)toreach15%by2026.Inordertoensuresecureelectricitysupplyandadequatelyutilisehighsharesofrenewableenergy,thegovernmentannouncedseveralpolicymeasurestopromoteanddevelopenergystoragetechnologies.TheNationalElectricityPlan(NEP),releasedbytheCentralElectricityAuthority(CEA)inMay2023,estimatesanenergystoragerequirementof16.1GW(7.5GWpumpedstoragehydropowerand8.7GWofbatteries)by2026-2027.Relatedtothis,theMinistryofPowerannouncedthepreparationofanationalframeworkfortheplanningandestablishmentofenergystoragesystems.Followingthat,viabilitygapfunding(VGF)for4000MWhofbatteryenergystoragesystem(BESS)projectswasformalised.Inacurrenttariff-basedcompetitivebiddingprocess,thediscoveredcostforBESSisINR10.18/kWh(USD0.12/kWh).TheVGFschemetargetsareductioninthelevelisedcostofBESSrangingfromINR5.5/kWhtoINR6.6/kWh(USD0.066/kWhtoUSD0.079/kWh)by2030-2031.ToenablelocaldevelopmentoflongdurationstorageatacheaperratethanBESS,thegovernmentreleasednewguidelinesforpumpedstoragehydropowerprojectsinAprilthisyear,withinterstatetransmissionchargesbeingwaivedforpumpedstorageconstructionawardedbyJune2025.Distributedrenewableenergy(DRE)iscurrentlyfarbehindsettargetsbutislikelytoincreasewithdedicatedRenewablePurchaseObligations(RPO)introducedthatrequiredesignatedconsumerstomeetaminimumof2.7%oftheirtotalPAGE94IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026consumptionfromDREby2026-2027.Effortsarealsounderwaytoachievehigherefficienciesandtoreducethecarbonfootprintofthermalpowerplants,withabout94unitsoftotalcapacityof65GWoperatingwithsupercriticalandultra-supercriticaltechnologies.Whileseveralmeasureswereintroducedinthepastthatallowedreplacingthermalpowerwithrenewables,in2023thegovernmentintroducedminimumRenewableGenerationObligations(RGO)forcoal/lignite-firedpowerplantsof6%by2026and10%by2028.Thismeansthatadesignatedconsumerwhichisacoal/lignite-basedplantwillbeobligatedtosupplementitsfossil-firedgenerationwithaminimumsupplyofrenewableelectricitytofulfilitsRGO.Itcandothatviaeithersupplyingtherenewableelectricityitselforprocuringrenewablepower,e.g.throughapowerpurchaseagreement(PPA).GridsandelectricitymarketdesignsarereceivingattentiontosupportdecarbonisationIn2023,Indiaannouncednewplanstostrengthentheinterstatetransmissionsystemtoenablerenewableintegration.InOctober,theCabinetapprovedtheGreenEnergyCorridor(GEC)Phase-IIinterstatetransmissionsystemfor13GWofrenewableenergyprojectsinLadakh,withcentralfinancialassistanceofINR8.3billion(aroundUSD100million).Inordertoboostpowertradewithneighbouringcountries,Indiaalsoplanstobuy10GWofpowerfromNepalinthenext10years,whichwillmeanexpandingthecapacityofcross-borderpowerlines.ThemarketforhydropowerimportsfromNepalmaybefurtherboostedwithanadditionalclauseintroducedundertherenewablepurchaseobligationguidelinesannouncedinOctoberallowingobligationstobemetbyprojectslocatedoutsideIndia.TheG20NewDelhiLeaders’Declarationrecognisedtheroleofgridinterconnectionsandcross-borderpowersystemsintegration.InadditiontostrengtheninginterconnectionswithneighbouringcountriesinSouthAsia,thegovernmentannouncedplansinthesecondhalfof2023toestablishelectricityinterconnectionswithSaudiArabia,UAEandSingaporeaspartoftheOneSunOneWorldOneGrid(OSOWOG)initiative.In2023,thenewgridcodecameintoforcealongwithgeneralaccessnetworkregulations.Theseinitiativesprovideforrenewableenergygridintegration,reliabilityandadequacyofreserves,reactivepowerandinertiasupport,flexibilityforbuyerstooptimisetheirprocurementcost,andseveralaspectsofscheduling,dispatchandperformancemonitoring.AroadmaponredesigningtheelectricitymarketinIndiawaspreparedin2023byahigh-levelgroupundertheMinistryofPower,outliningshort-,medium-andlong-terminterventionstoenableintegrationofrenewableenergyintothegridandoptimisationofelectricitygenerationresources.TheCentralElectricityRegulatoryCommission(CERC)approvedaplanfortheIndianEnergyExchangeLimited(IEX)tointroducetradinginahigh-priceday-aheadmarket(HP-DAM).ThisPAGE95IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026separatemarketsegmentwillenableutilisingavailablepowercapacitywithcostofproductionhigherthanthepricecapofINR12/unit(introducedin2022torationalisepricesforbuyersattheexchange),withaceilingpriceofINR20/unit.TheHP-DAMcould,forexample,catertogas-firedpowerplants,importedcoal-firedpowerplants,andbatteryenergystoragesystems.CERCalsoapprovedpowerexchangeplatformstolaunchthetertiaryreserveancillaryservice(TRAS)marketsegmenttohelpmaintaingridfrequencylevelsandaccommodatehighersharesofVRE.InJune2023,Indiaannounceditscarboncredittradingscheme,whichaimstoreducegreenhousegasemissionforobligatedentitiesbypricingemissionthroughcarboncreditcertificates.Theannouncementincludesacomprehensiveoverviewoftheinstitutionalstructurefortheschemewithdetailsonrolesandresponsibilitiesforeachministryandagencyinvolved.Inourforecast,weexpectIndia’semissionintensitytoimprove,decliningby2.7%annuallyduring2024-2026.ThecarboncredittradingschemecouldsupportIndia’slong-termtargetsforreductioninemissionintensityby2030.JapanCoaluseinpowergenerationissettocontractasnuclearandrenewablesrampupIn2023,Japan'selectricitydemandfellby3.7%year-on-yearduetorisingelectricitypricesandconcertedenergyconservationefforts.Theimpactofweatheronelectricitydemandwasmixed.Thewintermonthsof2023weresignificantlymilder,with-12%heatingdegreedays(HDD)comparedto2022,reducingelectricitydemand.Atthesametime,summerwashotterat+10%coolingdegreedays(CDD),supportingdemandforspacecooling.Themanufacturingsectorcontractedin2023,accordingtopurchasingmanagersindex(PMI)trends,whileatthesametimeservicesexpandedyear-on-year.ThespikeinpricesforenergycommoditiesfollowingRussia'sinvasionofUkrainepromptedutilitiestoraisetheirrates.InJune2023,sevenmajorutilitiesincreasedtheirregulatedhouseholdratesbyaround30%frompreviouslevels.Inresponsetothecrisis,theJapanesegovernmentprovidedsubsidiesforelectricityandgasbillsinDecember2022,andlaterextendedthissupportuntilthespringof2024.Weforecastamodestelectricitydemandgrowthatanaverageannualrateofaround0.5%from2024through2026,supportedbyanassumedgradualrecoveryinthemanufacturingsectoraswellasEVuptake.In2023theMinistryofEconomy,TradeandIndustry(METI)publisheditspreliminaryguidelinesforEVchargers,PAGE96IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026increasingtheinstallationtarget,andalsodecidedtoexpandsupportforsemiconductorfactoriesundertheGX(GreenTransformation)programme,formalisedinFebruary2023.Gasandcoalaccountedfortwo-thirdsofJapan'stotalpowergenerationmixin2023.Nucleargenerationincreasedby54%,toreach8%ofthegenerationmixasaresultofmorereactorscomingbackonlinefollowingperiodicalinspectionsin2022whiletheTakahamaUnits1and2wererestartedinAugustandOctober2023,respectively.Renewablesalsocontinuedtogrow,upby6%withashareof24%.Thiscombinationofexpandinglow-carbonpowergenerationandfallingelectricitydemandledtoasignificant10.3%year-on-yearreductionintotalemissionsin2023.Highernucleargeneration,expectedoncetheOnagawaUnit2andShimaneUnit2reactorsarerestartedin2024,andasteadyincreaseinrenewablesofabout5%annuallyto2026,willreducecoal-andgas-firedgenerationbyaround3%and2%peryearrespectivelyandseeemissionsintensityimproveby4%peryearduringtheforecastperiod.AdditionalreactorsmaybebroughtbackonlineinthecomingyearsfollowingagovernmentannouncementinAugust2022thattherestartofnuclearpowerplantswillbeaccelerated.InDecember2023,theregulatorliftedtheoperationalbanontheTEPCO-ownedKashiwazaki-Kariwanuclearpowerplantfollowingsafetyimprovements.Approvalfromthelocalgovernmentsisalsorequiredbeforearestart.In2024,Japan’scapacitymarketisontracktobecomeoperational,andthebalancingmarketisexpectedtointroducetradingofnewproductsaspartofelectricitysystemreforms.Inaddition,thefirstauctionforlong-terminvestmentinpowersourcesfordecarbonisationisplannedforJanuary2024.TheseinitiativesaimtoeasesupplytightnessinJapan'selectricitysystembyensuringsufficientpowercapacityandflexibility.PAGE97IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Year-on-yearchangeinelectricitygenerationinJapan,Korea,andAustralia,2021-2026TWh806040200-20-40-60-80-100202120222023202420252026202120222023202420252026202120222023202420252026JapanNuclearKoreaRenewablesAustraliaCoalGasOthernon-renewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.KoreaPlansunveiledtoexpandandstrengthenKorea’spowersupplyandtransmissioninfrastructuretomeetgrowingdemandKoreaposteda0.8%declineinelectricitydemandin2023,primarilyduetoaweakerindustrialsector.However,weexpectaverageannualdemandgrowthofslightlybelow1%for2024to2026.Thepeakelectricitydemandfortheentirepowersystemsurpassed100GWforthefirsttimeinhistoryon7August,reaching100.8GW.In2023,thecountry’stotalpowercapacityincreasedby7GW.Thisincludednuclear(1.4GW)aswellascoal-fired(1.1GW),gas-fired(2GW),andrenewableenergy(3.8GW)capacity.In2024,furthercapacityadditionsareexpectedfornuclear(1.4GW),coal-fired(1.1GW),gas-fired(0.7GW)andrenewableenergy(4.1GW).CoalisthemainstayofKorea’selectricitysystem,accountingforaboutone-thirdofthetotalgenerationin2023.However,coalpowerplantcapacityisexpectedtograduallydecreaseto2026,withplanstoconvertsevencoal-firedpowerplantstogas-firedplants,withatotalcapacityof3.6GW.Nuclearcapacityisforecasttoincreasefromabout25GWin2022to29GWin2026,withnoplanstoretireanynuclearpowerplantsinthelatestplan.Theshareofrenewableenergyandnuclearpowerinthegenerationincheshigher,whilecoalandLNGpostmarginaldeclinesPAGE98IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026overtheforecastperiod.Coal’sshareisexpectedtoedgelowerfrom32%in2023to29%in2026whiletheshareofgasfallsfrom29%toaround26%.Bycontrast,theshareofrenewableenergyinpowergenerationwillremaincomparativelymodest,thoughgrowing,risingfrom8%in2023to11%in2026.Theyear2023sawawaveofannouncementsonpoliciesandplansfornewgenerationinstallations,majortransmissionlinesandsubstationfacilities,amongotherinitiationstoimproveandexpandtheelectricitysystemaspartofits10thBasicPlanforLong-termElectricitySupplyandDemand(BPLE),whichwasreleasedinJanuary2023.The10thpowertransmissionandsubstationfacilityplanwasunveiledinMay.Inaddition,inOctober,theSpecialActonExpansionoftheNationalPowerGridwasproposedintheNationalAssembly,whichaimstoreducetransmissionlinesconstructiontimeandsupportpowergridexpansion,includingtheestablishmentofanewlong-distancetransmissionnetwork,whichareessentialtoensurethecompetitivenessofhigh-techindustries.Reportedly,thereisacriticalneedforexpandingthepowergridtomeetgrowingelectricitydemandfromsemiconductorfactories,aswellastointegratenuclearandrenewableenergysourcesinthepowermix.ThisdraftlawaimstoincludeVariableRenewableEnergies(VREs)intheprocessofdecidingwhichpowerunitstooperate,knownasthe“unitcommitmentprocedure”.TheseVREswillbedispatchedbasedontheirmeritorder,meaningtheywillberankedandusedbasedontheirefficiencyandcost,alongwithothertraditionalenergyresources.Thedraftlawalsoaimstocreateareal-timemarket,whichwouldgeneratepricesignalsforalltypesoftechnologiesevery15minutes.TheKoreaPowerExchange(KPX)intendstoexpandthisnewmarketdesignacrossthemainlandbytheendof2025.Lastly,theSpecialActonthePromotionofDistributedEnergywasenactedinJune2023.ThegovernmentaimstoreducetheexistingcentralisedpowergenerationandraisetheshareofdistributedpowergenerationintheKoreanenergymarketupto30%by2040,withasetofmeasuresthat,inparticular,wouldpromotetheuseofsmallrenewableIPPsclosetodemandcentresandenablethemtosellelectricitygenerationdirectlytoconsumers.Tomanagetheenergycrisis,thegovernmentimplementedaSystemMarginalPrice(SMP)upperlimitsystemintheelectricitymarketstartingfromDecember2022.SincetheSMPneedstoexceedtheupperlimittobeactivated,thelimitwastriggeredforonlyfourmonths,spanningfromDecember2022toFebruary2023aswellasApril2023.ThepricecapconcludedinNovember2023.PAGE99IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026AustraliaSouthAustraliasurpassed75%windandsolarshareingeneration,markingamilestoneElectricitydemandinAustraliafellbyaround0.7%in2023,withmilderwinterandsummertemperaturescomparedtothepreviousyearcontributingtothedecline.Demandisforecasttorisebyjustover1%onaverageannuallyin2024-2026,withgrowthcomingprimarilyfromtheresidentialsectorandhigherEVdeployment.Efficiencyisexpectedtoplayanincreasingroleinlimitingdemandgrowth,withmultipleinitiativesimplementedin2023.Planstoimproveefficiencyincludenewinvestmentsforretrofittingcommercialpropertiesandgovernmentgrantsforsmallandmedium-sizedbusinesses.Consultationshavealsobeeninitiatedtoimprovetheefficiencyofelectronicscreens.Mostcapacityadditionsinthecomingyearsareanticipatedtocomefromrenewablesources,withasmallcontributionfromnewgas-firedcapacity.In2023,almost6GWofrenewablescapacitywasinstalled,includingover4GWofsolarPVandaround1.5GWofwind.Weexpectasimilarpaceofinstallationstobemaintainedovertheforecastperiod.Coalcapacitycontinuedtodecline,withtheLiddellcoalpowerstationclosingitsremainingthreeunits(1500MW)inApril2023.Multiplelarge-scalebatteryprojectswereconnectedtotheNationalElectricityMarketin2023,bringingutilitybatterycapacitycloseto1.5GWandexceedingthecapacityofpumpedstoragehydropower.Residentialbatterysystemshavebeenestimatedatalmost2GW.In2023,totalrenewablesgenerationreached35%oftheelectricitymix,consistingmainlyofsolar(15%),wind(12%)andhydropower(6%).Theshareofrenewablesisexpectedtoreach43%in2026,surpassingcoalforthefirsttimeanddrivingasteadydeclineinfossilfuelgeneration.Coalfellslightlyfrom49%ofthemixin2022to48%in2023andisexpectedtodeclineto41%in2026.Theshareofgasfellto16%in2023andisforecasttodroptoaround15%by2026.TheregionalSouthAustralianelectricitymarketsawtheshareofVREgenerationreaching75%in2023,whichrosefrom71%thepreviousyear,andupfromabout50%in2019.Duetotherisingcontributionofrenewablesanddecliningcoalshare,in2023Australiacontinuedtoseereductionsinbothtotalemissions(-5%)andemissionsintensity(-4%).Weexpectemissionsintensitytocontinuedecliningbyaround5%annuallyonaverageto2026,whiletotalpowersectoremissionsfall3%peryearonaverage.InDecember2023AustraliaopenedthefirstbidsinitsCapacityInvestmentScheme,whichwasestablishedattheendof2022toencourageinvestmentinPAGE100IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026dispatchablerenewableenergy.Emissionsreductionambitionsforelectricityarealsonowreflectedinlaw,withtheinclusionofanemissionsreductionobjectiveintheNationalElectricityObjective.SoutheastAsiaStrongeconomicgrowthdrivestheregion’selectricitydemandinthe2024-2026outlookperiodIn2023,electricitydemandgrewby4.6%inSoutheastAsia,downfrom7%in2022,andbelowtheaverage6%observedduringthepre-pandemicperiodof2015-2019.Electricitydemandgrowthisforecasttoacceleratetoanaverage5.3%from2024to2026,supportedbystrongeconomicgrowthintheregionviaexpandingindustriesandrisingelectricityconsumptionperhousehold.GrowthinIndonesia,thelargestelectricityconsumerinregionwithashareofjustbelow30%,willunderpinthegains,risingbyanannualaverageof6.3%in2024-2026.Year-on-yearchangeinelectricitygenerationinSoutheastAsia,2019-2026100TWh20202021202220232024202520268060IEA.CCBY4.0.40200-20-40-60-802019CoalGasNuclearOthernon-renewablesRenewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.About35%oftheadditionaldemandoutto2026isexpectedtobemetbygenerationfromcoal,40%fromrenewablesand25%fromnaturalgas.Coal-firedgenerationgrewin2023by7.5%andisforecasttocontinuegrowingby4%,butataslowerpacecomparedtoits2015-2019average11%.Gas-firedoutputrose4%in2023andisanticipatedtoincreaseonaveragebyaround5%peryear,wellabovethe1%growthobservedin2015-2019,drivenbyadditionalLNGavailabilityfrom2025onward.RenewablesareforecasttorecordanaveragegrowthrateofPAGE101Electricity2024RegionalfocusAnalysisandforecastto20267%through2026,buttheirshareingenerationrisesonlyslightly,from26%in2023to28%in2026.Emissionsfromelectricitygenerationaresettoincreasebyanannualaveragerateof4%through2026.Withahighshareoffossil-firedgeneration,whichisexpectedtoremainrelativelyconstant,theregionisexpectedtocontinuetoregisterasteadyCO2intensityofaround600gCO2/kWhthrough2026.IndonesiaCoalretainsdominancebutgrowthofrenewableelectricitygenerationontracktoriserapidlyto2026In2023,theshareofcoalintotalelectricitygenerationinIndonesiaroseto66%,upfrom65%in2022and61%in2021.Electricitydemandposteday-o-yincreaseofalmost7%,whichwasmetmainlybycoalpowergeneration.Gas-firedpowermadeup13%oftotalgeneration,whilerenewableenergytechnologiesaccountedfor20%ofthemix.Thistranslatedtoanincreaseintotalemissionsof6.8%y-o-yin2023,withemissionsintensityofgenerationreaching790gCO2/kWh.Hydropower,geothermalandbiomassmakeupalmostallrenewableelectricity,withsolarandwindstillcoveringlessthan1%ofthetotalgeneration.Inthecomingyears,weexpectthatelectricitydemandwillcontinueasteadyriseofabout6%forthe2024-2026period,inlinewiththestrongeconomicgrowthforecastinthecountry.Growthinrenewablesisforecastat8%peryearin2024-2026.Coalandgas-firedgenerationincreasebyaround5%and6%,respectively,overthesameperiod,andmaintainasteadyshareintheelectricitygenerationmix.Whilecurrentgenerationexpansionprogrammesstillshowacontinueddeploymentofgasandcoal-firedtechnologiesthrough2030,theComprehensiveInvestmentandPolicyPlan(CIPP),publishedattheendofNovember2023undertheumbrellaoftheJustEnergyTransitionPartnership(JETP),showsamoreambitioustrajectoryforrenewabletechnologiesinthecountry.Theplan,whichisconditionalonreceivingfinancialsupportfromtheInternationalPartnersGroup(IPG)andtheGlasgowFinancialAllianceforNetZero(GFANZ),laysoutapathwayfordecarbonisingtheon-gridpowersectorby2050.Itincludesarapidexpansionofsolarandwindtechnologies,reaching7.3GWofdeploymentby2025and72GWby2030.UndertheJETPscenario,theon-gridelectricitydemandincreasesbyarobust6.4%annuallyfrom2022to2030and5.8%from2022to2050.PAGE102IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Year-on-yearchangeinelectricitygenerationinIndonesia,VietNam,andThailand,TWh2021-202650403020100-10-20202120222023202420252026202120222023202420252026202120222023202420252026IndonesiaNuclearVietNamRenewablesThailandCoalGasOthernon-renewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.VietNamStrongelectricitydemandgrowththrough2026isexpectedtogohandinhandwiththeacceleratingeconomyVietNampostedelectricitydemandgainsofmorethan4%in2023,butweexpectstrongergrowthofanaverage7%from2024outto2026,ledbyanacceleratingeconomy.Around2.7GWofrenewablecapacitywasaddedin2023,fairlyevenlysplitbetweensolarPVandwind.Weexpectthistrendtocontinueinsimilaramountsoverourforecasthorizon,supportedbyVietNam'spowerdevelopmentmasterplan,whichwasapprovedinMay2023.Itincludesatargetforgenerationfromnon-hydrorenewablesourcesof20%ofthecountry’selectricityby2030,witheffortstoequiphalfoftheofficebuildingsandhomeswithrooftopsolarpanelsexpectedtoplayalargepart.Newrenewablecapacityadditionswillbringtheshareofnon-hydrorenewableelectricityintotalgenerationfrom16%in2023to19%in2026,justshyofthetarget.Theshareofgasintotalgenerationisexpectedtoincreasefrom9%to11%,whilecoalaveragesaround43%in2024-2026,downfrom46%in2023.Tomeetdemandgrowth,totalgenerationfromgas,coalandrenewablesareallexpectedtoriseuntil2026.PAGE103IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Demandgrowthin2023wasmainlymetbycoalgeneration.Renewablegenerationisestimatedtohavedeclinedbyaround5%y-o-y,fallingto44%oftheelectricitygenerationmix,largelyduetoadrought-inducedhydropowershortage.Thiscausedapowercrisisin2023,wherepeakloadinJulyexacerbatedbyaheatwavecouldnotbemetduetoreducedwaterlevelsinseveralhydropowerreservoirs.Generationfromgasisestimatedtohavedecreasedby6%.Duetoitshighrelianceondomestichydropowerandhighgasprices,Vietnamhadtosignificantlyrampupcoal-firedgenerationin2023,increasingitsaverageCO2intensityofelectricitygenerationby11%.Thislevelisexpectedtofallin2024by6%onanassumedreboundinhydroavailabilityaswellashigherPVandwindgeneration.Interconnectionisseenasakeymechanismtosmoothoutthesevariations.Duringthepowercrisis,NorthernVietNamsufferedrollingblackoutsandsuddenpoweroutages,withanestimatedpeakdemandandsupplydeficitof1.8GWandcostofUSD1.4billion.Duringthispowercrunch,VietNamreceivedsupportfromChina,whichresumedcross-borderelectricityexportstothecountryforthefirsttimesince2016.GiventhestructureoftheVietnamesepowergrid,theexposureofthenorthernregionisparticularlyacute.AccordingtotheMinistryofIndustryandTrade,in2024Vietnam’snorthernregionislikelytofaceapowershortageofupto1.8GW.Againstabackdropofastrongriseinannualpowerdemand,NorthernVietNammaycontinuefacingpowershortagesinthecomingyears.In2022,thestateutilityrecordedalossofVND20.7trillion(USD874.5million)duetorisingfuelproductionprices.Inthefirsthalfof2023,thelossesrosetomorethanVND35.4trillion(USD1.46billion),accordingtoareportbytheMinistryofPlanningandInvestment.ThailandEnergysecurityconcernssharpenthefocusonboostingdomesticnaturalgasproductiontosupportgas-firedpowergenerationElectricitydemandinThailandrosebyaround3%in2023.Naturalgas-firedgenerationincreasedbyalmost13%,whereascoal-firedoutputdecreasedby14%.Renewablegenerationgrewby3%.Asaresult,CO2intensityofthepowersectordeclinedfrom470gCO2/kWhin2022to452gCO2/kWh.Supportedbyeconomicgrowth,electricitydemandinThailandisforecasttoriseatanaverageannualrateof3%from2024outto2026.Growthisexpectedtobemetbyincreasedsupplyfromcoal,gasandrenewables.Currently,gassuppliesaround65%oftheelectricitymix,coal18%andrenewables17%.By2026,thePAGE104IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026shareofcoalisexpectedtorisebytwopercentagepointswhilegasdecreasesbytwopercentagepoints,andrenewablesgrowslightly.Thiscorrespondstogrowthinbothemissionsandintensitythroughtheforecastperiod.Thailandgetsmorethan60%ofitselectricityfromnaturalgasandhasbeenincreasingimportstomeetdemand.RecentincreasesinLNGpriceshavetriggeredconcernsofanothergasandpowercrisis.Despitethis,thecabinetdecidedinSeptember2023toreducetheelectricityrateasameanstolowerthecostofliving.Thereisacalltoexpandreservesandproductionatdomesticgasfieldstoboostthecountry’senergysecurity.State-controlledPTTExploration&ProductionplanstodoublegasproductionatErawan,itsbiggestfield,to800millioncubicfeetperdayinearly2024.ImportedLNGaccountedforabout29%ofthegasusedinpowergenerationin2022,morethandoublethesharein2018,accordingtodatafromtheEnergyRegulatoryCommission.Additionstothe3.4GWofsolarPVand1.5GWofwindpowerwerelimitedin2022whilesolarcapacityincreasedaround400MWin2023.ThelargestsourceofrenewablesinThailandisbioenergy,withamorethan50%shareofrenewableelectricitygeneration.Achievingthenationaltargetforcarbonneutralityrequiresrenewableelectricitytoreach68%ofpowergenerationby2040.Growthoutto2026isexpectedtocomepredominantlyfromsolarPV,withsomewind.Feed-intariffsareofferedforsmallpowerproducersinspecificpartsofthecountry,aswellasPPAsforcommercialscaleprojects,inordertoreachaquotaforrenewableelectricityprojects.However,theThaiEnergyRegulatoryCommissionhassaidthatthereispotentialforfastergrowthofrooftopsolarifthegovernmentenactspoliciestoencourageprivatesectoruptake.Thailand’sPowerDevelopmentPlan(PDP)istypicallyupdatedorrevisedeveryfewyears,withthemostrecentrevisionpublishedin2020(PDP2018Revision1).Theupcomingupdateremainsunderdiscussiontoensurethebalancebetweenaccelerateddeploymentofdistributedvariablerenewablesandmeasurestoensurethatgridintegrationcapabilitiesareadequatelycaptured.MalaysiaGas-firedpowergenerationisexpectedtoovertakecoalin2026,whilehydropowerdominatesgrowthinrenewablesIn2023,electricitydemandinMalaysiaisestimatedtohavegrownaround3%year-on-year.Whiletheeconomicgrowthsloweddownfromthe2022highsofaGDPgrowthofabove8%,economyisestimatedtohavegrownrobustlybyalmost4%,whichsupportedelectricitydemand.ThecompletionofseveralnewPAGE105IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026semiconductorplantsanddatacentreinvestmentsin2024areexpectedtoboostelectricitydemandinthefollowingyears.Weforecastaverageannualelectricitydemandgrowthof3.4%through2026.Coal-firedpowergenerationaccountedforaround46%ofMalaysia'sgenerationmixin2023.Thegovernment'sNationalEnergyTransitionRoadmap(NETR)aimstoreducerelianceoncoalbyincreasingtheuseofgasandrenewables.Weexpectthegrowthofcoal-firedpowergenerationtoalmostplateauby2026,whilegas-firedpowergrowssteadilyandovertakescoalgenerationin2026.Afterhavingincreasedby1%in2023,emissionsintensityisforecasttofallbyaround1.5%annuallyonaveragefrom2024to2026,duetothedecliningcoalshare.Growingfossil-firedgenerationisexpectedtoincreasetotalpowersectoremissionsbyabout2%peryearonaverage.TheMalaysiangovernmenthassetanewtargetof70%renewableenergyinthepowergenerationmixby2050.Effortstoacceleraterenewableenergyinvestmentincludeincreasingthegreenenergytariff,teninitiativesintheNETRandremovingbarrierstorenewableenergygrowth.Inaddition,thebanonrenewableenergyexportswasliftedin2023toencourageinvestmentinlocalrenewableresources.Malaysiaisdrivingelectrificationofitstransportsectorandstrengtheningco-operationwithneighbouringcountriesaspartoftheNationalEnergyTransitionRoadmap.TenagaNasionalBerhad,thecountry’slargestutility,isworkingwithvariousstakeholdersondeveloping500MWLarge-ScaleSolarParks(LSSP),2.5GWHybridHydro-FloatingSolar(HHFS),andco-firinghydrogenandammoniaprojectstodiversifyitsenergyportfolioandprogresstowardsnetzerocarbonemissionsby2050.PAGE106IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Year-on-yearchangeinelectricitygenerationinMalaysia,Philippines,andSingapore,2021-2026TWh141210202120228202362024420252202602021-22022-42023-62024-820252026202120222023202420252026MalaysiaNuclearPhilippinesRenewablesSingaporeCoalGasOthernon-renewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.PhilippinesRobusteconomicgrowthfuelshighercoal-firedpowergenerationtomeetstrongdemandforelectricityGDPgrowthinthePhilippinesisestimatedat5.3%in2023,despiteglobalmacroeconomicchallengesandhighinflation.Thegainslargelyreflecthighhouseholdconsumptionandpublicspendingoninfrastructureandsocialservices.Asaresult,electricitydemandpostedstronggrowthofabout4%in2023,andisforecastatahigherannualaveragerateof6%from2024-2026,underpinnedbycontinuedrobusteconomicactivity.In2023,coal-firedgenerationincreasedbyanestimated5%,andisforecasttocontinuetogrowatanannualaveragerateof3.4%from2024-2026.Theshareofcoalinthegenerationmixissettodeclinegradually,from61%in2023to58%in2026.Despitesomeeffortstograduallyphaseoutcoal,includingthemoratoriumonnewcoalplantsinplacesince2020andsigningthecoalexitatCOP26,thecountryrankssixthintheworldin2022fornewcoalcapacity.Coalgenerationwillcontinuetoincreaseduringtheoutlookperiod,withalmost3.5GWofcapacityinconstructioncomingonline.Nevertheless,coalcapacityadditionsareexpectedtofallinthefutureasnewprojectswillnotbeaddedtothepipeline.Ascoalgenerationincreases,totalemissionsrisearound4%annuallyduring2024-2026.PAGE107IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Emissionintensitydecreasesby1.5%peryearastheshareofcoaldeclineswithgrowingrenewablesandnaturalgas-firedgeneration.Gas-firedoutputisforecasttorisebyalmost9%onaveragefrom2024-2026,resultinginaslightincreaseinitsshareoftheelectricitymixfrom14%in2023,to15%in2026.VariouseffortsarebeingmadebythePhilippinestopromotetheuseofnaturalgasasatransitionfuel,includingtheproposedDownstreamNaturalGasIndustryDevelopmentAct,whichwouldoffertaxincentivesforgasdevelopment,aswellasadraftcircularclarifyingthepolicyframeworkfordevelopmentofgenerationfacilitiesintheLuzongrid.ThePhilippinesistargeting35%renewablesinitselectricitymixby2030.In2023,thesharesatataround23%,anditisforecasttogrowbycloseto8%peryearonaveragefrom2024-2026,bringingitsshareinelectricityto25%inthesameperiod.Thisincreaseismostlydrivenbysolarandwind,whoseshareintheelectricitymixmorethandoublesfrom3%in2023to7%in2026.MeasuresinplacetosupportgrowthinrenewablesincludetheGreenEnergyOptionProgram,whichenablesconsumerswithsufficientloadandmeteringtodirectlyprocurerenewables,andallowing100%foreignownershipofrenewableassets,sinceDecember2022.SingaporeSignificantprogressintheapprovaloftheplannedregionalinterconnectionprojectswasachievedSingapore’selectricitydemandrosebylessthan0.5%in2023,downfrom2%in2022.For2024-2026,weexpectdemandtoincreasebyanaverage2%,inlinewitheconomicgrowth.EVswillaccountforanincreasingshareofnewelectricitydemand,withthecountryplanningtophaseoutthepurchaseofcombustionvehiclesby2030.Naturalgasmadeuparound93%ofSingapore’sgenerationin2023anditsshareisexpectedtodeclineto92%inthecomingyearsascleansourcesincrease,despiteaverageannualgrowthofgas-firedelectricityaround1.5%.Renewablegenerationisforecasttoreach6%ofthegenerationmixin2025,mainlyfromsolarPVandbiomass.SolarPVgenerationseesnearly15%annualaveragegrowthfor2024-2026duetoongoingcapacityadditions.Newgas-firedcapacityisalsocomingonline,withconstructionstartedinJuly2023ona600MWadvancedcombined-cyclegasturbinepowerplantinJurongIsland,andexpectedtobecompletedinthefirsthalfof2026.Theplantwillinitiallyrunpurelyonnaturalgasbutisdesignedtoco-firewithupto30%hydrogenandcanbeconvertedtorunentirelyonhydrogen.PAGE108IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Singapore’semissionintensityfellby2.2%in2023,drivenbyincreasedrenewablesandadeclineinoil-firedgeneration,whichsawaspikein2022duetohighgasprices.Weexpectacontinueddecreaseinintensityovertheforecasthorizonataround0.7%peryear.During2023,theSingaporeEnergyMarketAuthority(EMA)announcedconditionalapprovalformultipleinterconnectionprojectsunderaRequestForProposalprocess,initiatedin2021,aimingtoreachanimporttargetof4GWoflow-carbonelectricityby2035.Theseincludeprojectsamountingto2GWfromIndonesia,targetedforcompletioninthenextfiveyears,1GWfromCambodiaandanother1.2GWfromVietNam,whichwouldtotalmorethanhalfofSingapore’scurrentpeakdemand.Thesesignificantregionalintegrationprojectsareexpectedtobuildonthesuccessoftheexisting100MWLaoPDR-Thailand-Malaysia-SingaporePowerIntegrationProjectthatallowsSingaporetoimporthydropowerfromLaosviaThailandandMalaysia,operatingsince2022.Duetothehighdependencyonnaturalgas,electricitypricesinSingaporehaveexperiencedsubstantialvolatilityduetospikesinglobalfuelpricesandgassupplydisruptions.InadditiontomeasuresincludingastandbyLNGfacilityandatemporarypricecap,inOctober2023Singapore’sMinisterforTradeandIndustryannouncedthatanentitywillbeestablishedtoundertakecentralisedprocurementofgasforthepowersector,whichtheEMAexpectstosetupin2024.PAGE109IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026AmericasStronggrowthinrenewablepowerincreasinglydisplacesfossil-firedgenerationElectricitydemandisestimatedtohavedeclinedby0.4%in2023,largelybecauseoffallinUSdemandduetomilderweatherbringingdowntheaverage.Bycontrast,BrazilandMexicopostedrobustdemandgrowth.From2024-2026,weforecastelectricitydemandtoincreaseonaverageby1.7%peryearintheregion.Renewablegenerationisforecasttogrowannuallyby7%onaverageovertheoutlookperiod.Theincreaseinrenewablesissettomorethanoffsettheadditionalelectricitydemandanddisplacecoal-firedgeneration,whichisexpectedtorecordasubstantial10%declineonaveragefrom2024-2026.TheUnitedStatesdominatesthesedevelopments,wherearoundtwo-thirdsoftheelectricityintheAmericasisproducedandconsumed.Duetostronggrowthinrenewables,theshareoffossilfuelsinelectricitygenerationisexpectedtofallfrom50%in2022to44%in2026.EmissionsofelectricitygenerationintheAmericasaresettodeclineby4%peryearonaverageovertheforecastperiod,anditsemissionsintensitywillfallto235gCO2/kWhin2026,downfrom280gCO2/kWhin2023.Year-on-yearpercentchangeinelectricitydemand,Americas,2019-202620%15%10%5%0%-5%-10%20202022202420262020202220242026202020222024202620202022202420262020202220242026AmericasUnitedStatesCanadaMexicoBrazilHistoricaldemandUpdatedforecastPreviousforecast(July2023)IEA.CCBY4.0.PAGE110IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026UnitedStatesMilderweatherledtolowerelectricitydemandin2023,butgrowthresumesaselectrificationacceleratesto2026DespitetheUSeconomygrowingatanannualisedrateofabove3%inthefirstthreequartersof2023,including4.9%inthethirdquarter,electricitydemanddeclinedby1.6%fortheyearcomparedtogrowthof2.6%in2022.Electricityusewascurbedduetomilderweatheracrossmanypartsofthecountrycomparedto2022inbothinthesummerandwintermonths,reducingheatingandcoolingdemand.Inaddition,manufacturingactivityfelldespitegrowthintheoveralleconomy,amidadrawdownofinventories,strikesintheautomotiveindustryandoverallinflationarypressures.Thenumberofheatingdegreedays(HDDs)inthefirstquarter,typicallythepeakperiodofheatingdemand,wasmorethan10%lowerin2023thanin2022,withtheNortheastandMidwestregionsparticularlybelowaverage.Inthethirdquarter,coolingdegreedays(CDDs)inthesepeakmonthsforcoolingdemandwere1.5%belowthelevelin2022.From2024to2026,weexpectareturntogrowthinelectricitydemandof1.5%onaverage,fuelledbyincreasedmanufacturingactivityandelectrificationinthetransportationandbuildingsectors.Aroundone-thirdoftheadditionaldemandoutto2026isexpectedtocomefromtherapidlygrowingdatacentresectoralone.ProjectssupportedbytheUSgovernment’s2022InflationReductionAct(IRA)andtheBipartisanInfrastructureLaw(BIL)throughspecialfinancialvehicles,grants,taxcredits,loanguarantees,amongotherincentives,areassumedtoaccelerateoverourforecastperiod.TheseinitiativesenablehouseholdsandcommercialbusinessestomonetiseIRAtaxcredits,loansandrebatesfortheinstallationofelectricheatpumps,waterheaters,andotherenergysavingelectricappliances.InSeptember2023,governorsfrom25states,undertheumbrellaoftheU.S.ClimateAlliance,andtheBidenadministrationannouncedplanstoquadruplethenumberofheatpumpsinUShomesby2030,from4.7millionto20million.TheIRAandBILsupportedsignificantinvestmentsinthepowersector,withUSD110billionforcleanenergymanufacturingprojects,ofwhichmorethanUSD70billionwasfortheelectricvehicle(EV)supplychainasofAugust2023.AfurtherUSD125billionhasbeenawardedforcleanenergygenerationprojects.AsofNovember2023,theBILawardedfundingfor44000majorinfrastructureprojectsacrossthe50states,includingspendingonelectricitygridreliabilityandresilience.TheIRAalsolaunchedtheEnergyInfrastructureReinvestment(EIR)Program(section1706)thatguaranteesloansforprojectsthataimtoretool,repower,repurpose,orreplaceenergyinfrastructureortoimprovetheefficiencyofexistingenergyinfrastructure.PAGE111IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Gasgainedattheexpenseofcoal,whilerenewableoutputwasbelowaveragein2023Gas-firedgenerationincreasedby6.4%in2023comparedto7.3%in2022,aspricestumbled.GaspricesdeclinedsteeplyatthebenchmarkHenryHubin2023,fromaroundUSD6/MBtuin2022(thehighestlevelsince2008)toalowofUSD2.15/MBtuinMay2023duetostronggrowthindomesticproductionandmildweather.Theriseingas-firedgenerationcamelargelyattheexpenseofcoal-firedgeneration,whichdeclinedby7.7%in2022and19%in2023asthedecreaseinthecostofgasencouragedfuelswitching.Capacityfactorsofcoalplantsdeclinedfrom52%to42%intheperiodwhilegascombined-cycleplantsincreasedfrom55%to59%.Inaddition,around30GWofcoal-firedcapacitywasretiredsincethestartof2022,owingtotheageingfleet(averageageof43years)aswellasmorestringentstateandfederalenvironmentalregulations.Theshareofgasintheelectricitymixreachedarecordof42%for2023,whilecoaldeclinedto17%.Thiscontinuesthelong-termtrendsforbothfuels,asgasandcoal’sshareswere24%and40%,respectively,in2011.Year-on-yearchangeinelectricitygenerationintheUnitedStates,2019-2026300TWh200IEA.CCBY4.0.1000-100-200-30020192020202120222023202420252026CoalGasNuclearOthernon-renewablesRenewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.Growthinrenewablesgenerationwasmutedbyunfavourableweatherconditions,particularlyforwind,despitesignificantnewinstallations.Windgenerationwasalmostthesamein2023asin2022despiteanincreaseofaround8GWofcapacity.Inaddition,outputfromhydropowerplantswasdown4.4%asrapidspringsnowmeltcausedbyrecordhightemperaturesintheNorthwestdepressedoutputintheregion,whichaccountsforaround50%ofUShydropowercapacity.PAGE112Electricity2024RegionalfocusAnalysisandforecastto2026SolarPVgenerationincreasedby16%,drivenbynewinstallationsatbothgrid-scale(26GW)anddistributedgeneration(8GW)levels.PowergenerationshareintheUnitedStatesinJulyandAugust,2021-2023100%Other80%SolarShareinpowermixWindOnshore60%Nuclear26%22%19%Hydro40%CoalNaturalGas20%40%43%45%0%202220232021IEA.CCBY4.0.Source:IEAanalysisbasedonofficialdatafromcountryandnationalregulatoryauthorities.NuclearoutputincreasedslightlyasPlantVogtleUnit3enteredcommercialoperationinJuly2023,tenyearsafterthestartofconstruction.Unit4isexpectedtofollowin2024.DevelopersUtahMunicipalandNuScalePoweragreedtocanceltheirsmallmodularreactor(SMR)projectthatwasplannedforconstructioninIdahoafternotmeetingthetargetsubscriptionlevelof80%oftheproject’soutput.SolarPVandwindgenerationaresettosurpasscoal-firedgenerationin2024,markingamilestoneInstallationsofwindandsolarareexpectedtoincreaserenewablegenerationbyaround10%annuallybetween2024to2026,althoughfinancingandsupplychainissuesarecausingdelaysandcancellationsofsomeprojects,particularlyforoffshorewind.Solarandwindgenerationareexpectedtosurpasscoal-firedgenerationin2024.Coaloutputisexpectedtofallbyalmost10%peryearoverthe2024-2026periodasretirementscontinue,althoughataslowerpacethanseenin2022-2023.Gasoutputwillbemostlyunchanged,asnewcapacityadditionswillreplaceretiringunitsandmoderatelylowgaspriceswillkeepthevariablecostofgas-firedgenerationcompetitivewithcoal.Asaresultoftheincreaseinrenewablesanddeclineofcoal,totalpowersectoremissionsandemissionsintensityareexpectedtodeclineatannualratesof4%and5%,respectively,between2023and2026.ReliabilityconcernsforwinterAlargeportionoftheUnitedStatesisatelevatedriskofinsufficientelectricitysupplyduringpeakwinterconditionsaccordingtotheNorthAmericanElectricPAGE113IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026ReliabilityCorporation(NERC),asreservemarginshavedeclinedinmanyareas.Areplayoftheprolongedcoldsnaps,likeWinterStormUriintheSouth-CentralstatesinFebruary2021andElliottinDecember2022,whichcausedsignificantloadshedding,threatentoreducegas-firedgenerationwhilealsocompromisingfueldelivery,particularlyinregionswherefacilitiesarenotdesignedforsuchconditions.Loadforecastsalsobecomehighlyuncertainandcomplex,andunderestimatingdemandiscitedasareliabilityrisk.WideareaeventslikeElliottwouldreducetransfersfromneighbouringregions.CanadaElectricitydemandreturnstogrowthinthe2024-2026outlook,withhighergas-firedgenerationtooffsetthefallinnuclearInCanada,amilderwinteroffsetawarmanddrysummer,contributedtoadeclineinelectricitydemandof1%in2023.Weexpectdemandwillincreasebyaround1%perannumoverthenextthreeyears.Hydropower,whichcontributesmorethanhalfofelectricitysupplyinthecountry,fellbyalmost7%duetoreducedsupplyfromsnowmeltasaresultofthemildwinter.ThisinturncausedCanadatoreduceelectricityexportstotheUSbyaround15%fromQuebecand30%fromBritishColumbiainthefirsthalfoftheyear.Nucleargenerationisexpectedtoincreasebyaround4%in2024beforefallingbyaround10%in2025and16%in2026asadditionalunitswillbetakenofflinefortheongoingrefurbishmentprogrammesatBruce(6.2GW)andDarlington(3.5GW)nuclearstations.Eachunitwillbeofflineforaroundthreeyearsforthework,whichwillextendtheunitslifetimesby30years.ThePickeringstation(3.1GW)isexpectedtocloseUnits1and4whentheiroperatinglicencesexpireattheendof2024,althoughtheOntarioprovincialgovernmenthadannouncedintentionstoseekalicenceextensionthrough2026forUnits5-8,citingtightreservemargins.Thedeclineinnuclearoutputisreplacedbyacombinationofgas-firedgenerationandrenewables.Asaresult,overallemissionsfromelectricitygenerationareexpectedtoriseby6%in2025-2026.InAugust,constructionbeganona1250MWconverterstationfortheChamplainHudsonPowerExpresstransmissionlinethatwillbringpowerfromQuebectoNewYorkCity.Itisexpectedtostartoperatingin2026.PAGE114IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026InNovember,PrimeMinisterTrudeau’sgovernmentexemptedhomeheatingoilfromthefederalcarbontaxprogramme(currentlyCAD65/tCO2)forthenextthreeyears,owinginparttoarecentdoublinginthepriceofoil.Thiswastwinnedwithadditionalincentivestoswitchfromheatingoiltoelectricheatpumps.Year-on-yearchangeinelectricitygenerationinCanada,Mexico,andBrazil,2021-2026TWh100806040200-20-40-60-80202120222023202420252026202120222023202420252026202120222023202420252026CanadaNuclearMexicoRenewablesBrazilCoalGasOthernon-renewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.MexicoHydropowergenerationfelltorecordlowsin2023duetodrought,pushingupoilandgas-firedoutputIn2023,electricitydemandinthecountrygrewatrateof3%y-o-y,closelyfollowingtheeconomicgrowthrateofanaverage3.2%.Stronggrowthintheindustrialsector,servicesindustryandagriculturalallcombinedtoboostpowerdemand.Weexpectthatelectricitydemandwillmaintainstablegrowthof2.5%fortheperiod2024-2026.ThisisaloweroverallannualgrowthratethanthatseeninthepasttwoyearsasthecountrywasreboundingfromtheeffectsoftheCovid-19pandemic,however,itwillstillcloselyfolloweconomicactivityinthecountry.Electricitydemandandeconomicgrowthwillbesupportedbyarequirementforahigherpercentageofregionallycommercialisedproductstobemanufacturedwithintheregion(regionalvalue-contentrequirements)intheUS-Mexico-CanadaTradeAgreement(USMCA),andnearshoring.Nearshoringisastrategyinwhichcompaniesmovepartoftheirproductionclosertothefinalconsumer,therebyPAGE115IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026reducingcostsandlogisticalsetbacks.Theimpactofnearshoringwilllikelyunfoldgraduallyincomingyears,andsteadilyincreaseelectricitydemandintheforecastperiod.Hydropowermakesupabout40%ofMexico’srenewableenergysupplyandisanimportantsourceofgenerationduringthepeaksummerseason,aswellasprovidingflexibilityandbackuppowerwhenothersourcesofgenerationaredisrupted.However,recentmulti-yeardroughtshavecompromiseditsavailability.Duringsummer2023,anoperationalalertwasissuedasaresultofaperiodoflowoperatingreserves(below6%)butCENACE,thenationalISO,laterclarifiedthatelectricitysupplywasnotatrisk.Thesituationwasduetoasuddenincreaseinpeakdemand–9%higherthanthatrecordedin2022(52.9GW)–andlowhydroavailability.Despitehigherelectricitydemand,thecumulativeannualhydropowergenerationin2023wasmorethan40%lowerthanthatfor2022and2021,and9%lowerthanthatof2019–theyearwiththelowesthydropowergenerationinrecenthistory.Theavailablealternativestocoverthereductioninhydrogenerationrequiremoreexpensivefuelsources,suchasnaturalgasthatismainlyimported,dieselorfueloil,whichcouldultimatelyresultinhigherelectricityproductioncosts.CumulativeyearlyhydropowerproductioninMexico,2018-202335Hydropowerproduction(TWh)30IEA.CCBY4.0.2520182019202020152021102022202350IEA.CCBY4.0.Source:IEAanalysisbasedondatafromSistemadeInformacióndeMercado.In2023,theemissionsintensityofthepowersectorrosebyabout4%y-o-y,reaching446gCO2/kWhduetolowerhydropowergeneration.Anincreaseinnaturalgas,nuclear,solarandwindproductioncombinedtosubstituteforthelossofhydropower.ThegrowthofsolarandwindinMexicoareexpectedtobelimitedPAGE116Electricity2024RegionalfocusAnalysisandforecastto2026tothoseprojectspreviouslycommittedinauctions,whichwerehaltedin2019.Theseprojectswillpushtheshareofsolarandwindintotalelectricitygenerationfrom10%in2023to13%in2026.Alongwithincreasedsolarandwindpower,gas-firedgenerationfallsfrom59%to57%whilecoal’ssharedeclinesfrom7%to6%,whichcombinedleadtoareductioninpowersectoremissionsintensityofalmost3%peryearfor2024-2026.BrazilSolarandwindoutputrisebyacombined50%in2026,andnewtransmissionlinesaresettotransformthepowersectorElectricitydemandinBrazilrosebyabout4%in2023,comparedto2.7%in2022,largelyreflectingrobusteconomicactivityandhigherconsumptioninthebuildingssector.Thelargestabsolutegrowthin2023camefromthenorthernsubsystem,duetohigheraveragetemperaturesandincreasedelectricityaccess.Notably,on13November2023thecountry’sinterconnectedsystemreachedrecord-highinstantaneousdemandabove100GW.Onthatday,aheatwavepushedupaircoolingneeds,particularlyintheSoutheast/Centre-Westsubsystem,whichreacheditsownrecordhigh(61GW).CapacityfactorsofhydropowerinBrazilhadfallenfromanaverage56%in1990-2021to42%in2017-2020,andtoarecordlow38%in2021–itslowestlevelatleastsince1990.Severedroughtsin2021hadcausedwatershortagesandpowercuts.In2022,hydropowergenerationrecovered,risingby17%year-on-year,andrecordinganaveragecapacityfactorof44%.In2023,hydrocapacityfactorwasagainabout44%,withgenerationincreasingby1%.Atthesametime,gas-firedgenerationdeclinedby10%,whereascoal-firedoutputincreasedby10%.ElectricitydemandinBrazilisforecasttoincreaseatanaverage2.5%peryearin2024-2026comparedto2.2%overthe2018-2023period.Growthissupportedbycontinuedbriskeconomicactivityandhigherresidentialconsumption.TheruralelectrificationprogrammeLuzParaTodos(LightforAll),whichhasbenefitedover18millionpeoplesinceitscreation,celebratedits20thanniversaryinNovember2023.Itwillincludeupto2millionmorepeopleby2026,providinganadditionalboosttoelectricitydemandgrowth.Outto2026,weexpectmostofnewelectricitydemandinBraziltobemetbywindandsolarPV.Inourforecast,combinedwindandsolarPVgenerationin2026willbealmost50%morethanthatof2022,reachingover200TWh,andachievingacombinedgenerationshareofalmost30%(upfromaround20%in2023).Withthis,totalrenewablegenerationinBrazilwillaccountforabout95%oftheelectricitymixin2026.ConsideringthegrowinghighshareofrenewablesinthePAGE117IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026system,whichincludesover20GWofdistributedpowercapacitycurrently,Brazil’sMinistryofMinesandEnergyopenedapublicconsultationinNovember2023tovalidateamechanismtoreducethermalplantcontractualinflexibilityintimesofexcesssupply.Themeasurewouldallowthermalpowerplantstomakeofferstothesystemtoreducetheirinflexiblegeneration.Complementarytogridexpansion,electricitystoragehasbeenconsideredanenablingsolutionforhigherwindandsolarPVintegration.Forinstance,inMarch2023,thefirstlarge-scalebatterysystem(30MW/60MWh)inBrazilwasdeployedintheStateofSaoPauloforgridreinforcement.InOctober2023,theelectricityregulatoropenedaconsultationonregulatorysolutionsforthegridconnectionofstoragesystems,withtopicsunderconsiderationsuchasthedefinitionofthegridcapacitytobecontractedbystoragesystemsandthenetworkusagetariffs.Otherannouncementsongriddevelopmentin2023aresettotransformBrazil’spowersectorinthecomingyears.InJune,thefirsttransmissionauctionoftheyearwasawardedforatotalBRL15.7billion(aroundUSD3billion),inlineandsubstationinvestments,withoneprojectexpectedtobecommissionedwithin36months.Asecondauction–thelargesteverbytheregulator–awardedthreelotsworthatotalBRL21.7billion(aroundUSD4billion)fortransmissionlinesinDecember2023.Thenewlineswillraiserenewablegeneratedpowerinthenortheast,whichhasbothabundantsunshineandwind,toincreasesuppliestothesoutherndemandregionofthecountry.China'sStateGridwasawardedthelion’sshareofthecontractsinlargest-everelectricitytransmissionlineauction,andalreadyholds24transmissionconcessions,19assoleoperatorandfiveinjointventures,andoveralloperatesmorethan16000kmofpowerlinesinBrazil.OtherAmericasElectricitydemandinChilein2023rosebylessthan1%year-on-year,mirroringflateconomicgrowth.Ahighlightin2023wastherecordshareofmorethan60%ofrenewablesintheelectricitymix.Thankstostrongrainfall,hydropoweroutputwasaround10%abovethe2018-2022average.Additionally,solarPVandwindprovidedaroundone-thirdofgenerationin2023,reachinghourlysharesofover70%inthenationalpowersysteminmorethan30hoursthroughout2023.Forthe2024-2026period,weexpectanaveragegrowthindemandof2.4%peryear.ThecorrespondingriseinelectricitydemandwillbemorethanmetbyincreasedsolarPVandwindgeneration,whichcombinedareexpectedtorisebyaround15%peryearonaverage,basedonthecurrentpipelineofprojects.Thiswouldpushbothgasandcoal-firedgenerationdownrapidly,toaroundone-thirdofthe2023levelin2026,bringingpowergenerationemissionsintensitybelow100gCO2/kWh.Chilehasacoal-powerphase-outplanby2040atthelatest.PAGE118IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026ThepublicagendaoftheChileanpowersectorin2023wascentredaroundelectricitytariffsandreformstoadvanceinfrastructuredevelopment.Thetariffsforconsumerswerefirstfrozenin2019,toavoidpriceincreasesagainstabackgroundofsocialunrest.In2023,thegovernmentabolishedthe“wintertariff”forcertainusersegments.Thismeansthatasurchargeonthepricewillnotbeappliedanymoreduringautumnandwintermonths,aimingtoreducehouseholdenergyexpenditureandtofosterelectrificationofheat.Ontheotherhand,inthecontextofthehighlevelsofVREcurtailment,thegovernmentproposedmeasurestoimprovemarketconditionsforrenewableprojects.Thesemeasuresincluderedistributionofcongestionincomeforrenewableprojectsaffectedbycongestion,atenderforadditionalbatterystoragecapacity(morethan500MWisunderconstruction),andupdatedtransmissionplanning.Theseactionsarepartofthe“InitialAgendafortheSecondPhaseoftheEnergyTransition”,whichismeanttobeimplementedby2024.Further,the2x1.5GWhigh-voltagedirectcurrent(HVDC)transmissionlineprojectKimal-LoAguirre,settoconnectsolar-richareaswithlargeloadcentres,startedtheenvironmentalpermittingprocess,andisexpectedtobeoperationalbeforetheendofthisdecade.InColombia,electricitydemandgrewbyaround3%year-on-yearin2023,belowthepost-covidreboundrateof4.7%in2022.TheimpactsoftheElNiñoSouthernOscillation,thecyclewhichbeganinMay2023,threatentoreducehydropowergenerationuntilaroundMay-June2024.InNovember,Colombia,whichreliesheavilyonhydropoweratabout70%ofitsannualelectricitygeneration,officiallyannouncedthestartofElNiñointhecountry,withthepotentialformuchhighertemperaturesanddroughts,warningthiscanpotentiallyleadtohigherelectricitypricesandstrongerelectricitydemandfromincreasedcoolingneeds.ThisweatherphenomenontypicallyreducesrainfallinColombia,leadingtodroughtconditionswhichcanseverelyaffectwatersupplies,impactinghydropowergeneration.For2024-2026,weexpectdemandtogrowbyaround3%peryear,andmostofthatadditionalsupplytobemetbyrenewables.WindandsolarPVstillonlyaccountforunder2%ofgeneration.TherewereseveralimportantdevelopmentstonoteintheColombianelectricitysectorin2023.DuetopoweroutagesinEcuadorinearlyOctoberasaresultofthedryperiodcausedbyElNiño,Colombiaagreedtoincreasecross-borderexports(comingfromthermalunits)toenhanceEcuador’selectricitysecurity.InJune,thegovernmentpublishedDecree0929,which,amongotheraspects,mandatestheregulatortodesignmarketmechanismsfordemandresponse,fortheremunerationofsmall-scalegenerationenergyexcessandfortheupdateofthewholesalepriceformationprocess.Thesemeasuresaimtopromoteefficiencyandcompetitionintheprovisionofpower.Althoughthedecreedoesnotdirectlymodifytheelectricitytariffstructure,itprovidesguidelinesfortheupcomingworkoftheregulator.Further,aftertariffswerefrozenduringtheCovid-19pandemic,PAGE119IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026whichhasputfinancialpressureonseveralelectricitysuppliers,thegovernmentenabledaCOP1billioncreditline(aroundUSD230million).Thisisaimedatguaranteeingthatthesecompaniescankeepprovidingpowertoendusers.CostaRica’selectricitydemandrosemorethan2%in2023,inlinewitheconomicgrowth.TheimpactsofElNiñoledtolowerhydropoweroutputovertheyear,resultinginthermalgenerationtoaccountformorethan5%ofthe2023electricitymix–movingCostaRica’spowersystemawayfromitstypicalrenewablessharecloseto100%.Concernsoverdemand-supplyimbalancesduringthesummersof2024-2026relatedtouncertaintyoverhydropoweroutputhaveemerged.Nearterm,inanticipationoftheimpactofcurtailedhydropoweroutputfromElNiñointhesummersof2024-2026,thenationalelectricitycompanyICEprocured140MWofadditionalthermalpower.Thismeasure,aimedatensuringsufficientelectricitysupply,hadatotalcostofCRC82million.In2023thegovernmentofCostaRicaalsofocusedonmarketandregulationreforms.InOctober,aproposedlaw(project23414)seekstoincreasecompetitionintheelectricitymarket,harmonisetheregulatoryframeworkandcreateanindependentsystemoperator,amongothermeasures.PAGE120IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026EuropeAslowdowninmanufacturingandindustrialactivityreducedelectricitydemandin2023ElectricitydemandinEuropedeclinedby2.4%y-o-yin2023,followinga3.6%fallin2022.InthemajorityofEUcountries,electricitydemanddecreasedamidthesluggishmacroeconomicenvironmentandweakmanufacturingandindustrialactivity.However,differentdemandtrendswereobservedacrosstheregion.Inthesouthernpartofthecontinent,Portugal,Croatia,Cyprus1andMaltasawincreasesintheirelectricityconsumption.Whereasthesummerof2023washotterinPortugalandCyprus1comparedto2022supportingdemandgrowth,itwascoolerinMalta,indicatingnon-weather-relatedfactorsdrovethedemandthere.Ireland,DenmarkandNorwayinthenorthalsosawsignificantgrowth,whichareseeingrapidexpansioninthedatacentresector.Nevertheless,whilethewinterwasmilderinIreland(aswellasinEuropeoverall),itwascolderintheNordiccountriesboostingspaceheatingneeds.Year-on-yearpercentchangeinelectricitydemandinEurope,2023vs20224%2%0%-2%-4%-6%-8%-10%IEA.CCBY4.0.1NotebytheRepublicofTürkiyeIEA.CCBY4.0.Theinformationinthisdocumentwithreferenceto“Cyprus”relatestothesouthernpartoftheIsland.ThereisnosingleauthorityrepresentingbothTurkishandGreekCypriotpeopleontheIsland.TürkiyerecognisestheTurkishRepublicofNorthernCyprus(TRNC).UntilalastingandequitablesolutionisfoundwithinthecontextoftheUnitedNations,Türkiyeshallpreserveitspositionconcerningthe“Cyprusissue”.NotebyalltheEuropeanUnionMemberStatesoftheOECDandtheEuropeanUnionTheRepublicofCyprusisrecognisedbyallmembersoftheUnitedNationswiththeexceptionofTürkiye.TheinformationinthisdocumentrelatestotheareaundertheeffectivecontroloftheGovernmentoftheRepublicofCyprus.PAGE121Electricity2024RegionalfocusAnalysisandforecastto2026Weexpectelectricitydemandtogrowby2.4%peryearonaverageoverthe2024-26forecastperiodinEurope,supportedbyagradualrecoveryintheindustrialactivity,furtherelectrificationoftheheatingandtransportsectorsandtheexpansioninthedatacentresector.WeakergrowthinEuropeanelectricitydemandin2023ledtoadeclineinfossil-firedpower,withgenerationfromgas(-16%)andcoal(-19%)downsubstantially.Atthesametime,renewablegenerationgrewby9%.HydropowergenerationintheEuropeanUnionroseby16%from2022,whichwasaffectedbydroughts.Bycontrast,Türkiyecontinuedtoseebelow-averagehydropowergenerationduetodroughtsinboth2022and2023,andfellbyafurther4.5%lastyear.WeexpectEuropeanrenewablegenerationtogrowby14%in2024,ledhigherbytheassumedrecoveryinhydropoweroutputinTürkiye,followedbyanaveragegrowthrateof6.6%overthe2025-26periodaswindandsolarPVcapacitiescontinueexpanding.ElectricitygenerationfromcoalinEuropeisforecasttocontinuedecliningbyafurther10%peryearonaverageandgasby6%.Powersectoremissionsareexpectedtofallonaverageby9%peryear,withCO2intensityofpowergenerationsimilarlydecliningatanaveragerateof11%,fromabout223gCO2/kWhin2023to157gCO2/kWhin2026.EuropewillremainamongtheregionswiththelowestCO2intensityofpowergeneration.Year-on-yearpercentchangeinelectricitydemandinEurope,2019-202610%8%6%4%2%0%-2%-4%-6%-8%2020202220242026202020222024202620202022202420262020202220242026202020222024202620202022202420262020202220242026EuropeanGermanyFranceItalySpainUnitedTürkiyeUnionKingdomHistoricaldemandUpdatedforecastPreviousforecast(July2023)IEA.CCBY4.0.PAGE122IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026EuropeanUnionCleanelectricityshareingenerationissettosurpass75%in2026,rapidlyreducingtheCO2intensityofelectricitysupplyFollowingtwoconsecutiveyearsofelectricitydemanddeclineintheEU(-3.1%in2022and-3.2%in2023),weexpectdemandtoreboundby1.8%in2024,followedbyanaverage2.5%growthduringthe2024-2026period.Demandisnotexpectedtoreturnto2021levelsuntil2026attheearliest.Ananticipatedgradualrecoveryintheindustrialsectoraccountsfor40%ofincrementaldemand,whilethegrowthinelectricvehicles,heatpumpsanddatacentresaccountsfor50%.Overtheoutlookperiod,renewablegenerationisexpectedtogrowatanaveragerateofaround9%,offsettingalloftheadditionalelectricitydemandanddisplacingfossil-firedgeneration.Coal-firedpowerfellbyaround26%in2023andissettodeclineatanaverage13%from2024to2026.Gas-firedgenerationfellby17%in2023,andisforecasttodeclinebyafurther7%annuallyto2026.Nuclearoutputrose1.4%lastyearandisforecasttogrowby2.2%annuallyto2026,asthemaintenancescheduleoftheFrenchnuclearfleetprogresses,andthereactorsFlamanville-3(France)andMochovce-4(Slovakia)commenceoperationsaccordingtoannouncedplans.Theshareofrenewablesingenerationissettorisefrom45%in2023to50%in2024andtoabout55%in2026.Theshareoflow-emissionssupply–renewablesandnuclear–isexpectedtoincreasefrom67%in2023to77%in2026.Year-on-yearchangeinelectricitygenerationintheEuropeanUnion,2019-2026200TWh20192020202120222023202420252026150100IEA.CCBY4.0.500-50-100-150-200-250CoalGasNuclearOthernon-renewablesRenewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.PAGE123Electricity2024RegionalfocusAnalysisandforecastto2026Emergencyinterventionsof2022-2023hadvaryingimplementationchallengesandeffectsInresponsetosurgingenergypricesfollowingRussia’sinvasionofUkraine,theEuropeanUnionadoptedanumberofemergencyinterventionstolowerconsumptionandreducehouseholdenergybills.TheCouncilRegulationpublishedinOctober2022includedbindingandnon-bindingdemandreductiontargets(fortheperiod1December2022–31March2023),arevenuecapofEUR180/MWhforinframarginalproducers(1December2022–30June2023),andallowedforbelow-costregulatedpricesforhouseholdsandsmallandmedium-sizedbusinesses(8October2022–31December2023).InJune2023,theCommissionreporteditsreviewoftheemergencyinterventions.Accordingly,thebindingtargetof5%electricitydemandreductioninpeakhourswasadoptedasproposed,howeverchallengesemergedinmanymemberstatesintheimplementationoftheindicativetargetofreducingtotalmonthlygrosselectricityconsumptionby10%(comparedtothelastfiveyears).Reportedly,theimplementationoftherevenuecapwasproblematicduetotheshorttimeframewithinwhichthemeasurehadtobeintroducedandbecauseofdifficultieswithdatacollectionandprocessing.ConcernswereraisedbyvariousstakeholdersthattherevenuecapmayhaveimpactedexistingPPAsandotherlong-termcontracts,aswellasdiscouragedthemfromtheinitiationofnewagreements.Adetailedanalysisoftheintroducedmeasuresareprovidedinthe2023MarketMonitoringReportbytheEUAgencyfortheCooperationofEnergyRegulators(ACER).AprovisionalagreementwasreachedontheEuropeanUnion’selectricitymarketreformNegotiationsontheEUelectricitymarketreformtookplacein2023,aftertheEuropeanCommissionhadadoptedtheproposalinMarchthesameyear.InOctober2023,theEuropeanCouncilagreedonaGeneralApproachreformoftheelectricitymarket.TheagreedgeneralguidelinesprovidedabasisforthepositionofthememberstatesinthesubsequentnegotiationswiththeEuropeanParliamentonthedetailsofthelegislation.InDecember2023,theEuropeanCouncilandtheParliamentreachedaprovisionalagreementonthereformofEuropeanEnergyMarkets,aimingtoprotecttheelectricitymarketagainstshocksinlightoftherecentenergycrisis,mitigatepricevolatilityandpreparetheenergysystemforincreasedrenewablepenetration.Onthedemandside,measurestoshieldconsumersfrompricehikesincludethepromotionofPPAsbyretailenergyproviders,establishingfreechoiceofenergyprovidersandgrantingtherighttoparticipateinenergysharingschemesforself-consumptionforallconsumers.Energyprovidersarefurtherobligedtohedgetheirpricerisksforallvolumessoldunderfixedpricecontracts.PAGE124IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Energy-poorcommunitieswillbeprotectedfromdisconnectionandmemberstateswillhavetoestablishsuppliersoflastresortensuringelectricitysupplytoallconsumersintimesofcrisis.Further,theproposedreformextendsthemandateofmembercountriestoapplyregulatedpricestosmallandmedium-sizedenterprises(SMEs)intimesofcrisis.Inadditiontomemberstates,theCouncilreceivestherighttodeclareanEU-wideenergycrisis,allowingtheabove-mentionedmeasurestobeimplementedbyallmemberstates.Onthesupplyside,thereformenablesmemberstatestointroduceremunerationschemesforprovidingback-upcapacityandmedium-tolong-termsecuredsupplyservicesmoreeasily,andagreesthatcapacityremunerationmechanismsshouldplayanintegralpartinthefutureelectricitymarketdesign.Therequirementfornetzeroemissionsforthesecapacityservicescanbederogateduntil2028.Membercountriesarealsograntedthepossibilitytointroducesupportmeasuresfordemandresponseandstorage.Further,accordingtothemarketdesignagreement,publicfundingandsupportschemesforrenewableandnuclearprojectsshouldbeincreasinglybuiltontwo-sidedcontractsfordifference(CFDs).ThishasbeenamatterofdisputebetweensomeEUmemberstates,includingGermanyandFrance,whenthesereformsweretabled.Thisdisputecentredaroundtheconcernthatwiththenewpowermarketreforms,Francewouldreceivesubstantialprofitsfromtheirexistingnuclearpowerfleet.SomeEUcountrieswereconcernedthatFrancecouldthenusetheseexcessprofits,estimatedintherangeofEUR7-20billiontosubsidiseitsindustry.ThisledGermanytorequestthatCFDsnotapplytoexistingnuclearpowerplants.ThecompromisereachedbyEUcountriesproposesthatwhileCFDsaremandatoryforsupportschemesfornewinvestmentsinrenewableandlow-carbonpowergeneration,CFDsareoptionalforexistinginfrastructure.ThisalleviatedtheconcernsofsomecountriesastheEuropeanCommission’scompetitionauthoritieswouldensurefaircompetitionthroughouttheprocess.Two-wayCFDsdistributeexcessrevenuestoconsumersifthemarketpriceisaboveapre-agreedstrikeprice,whileifthemarketpricesarebelowapre-agreedstrikeprice,thenthedifferenceisreimbursedtothegenerator.Theaimistohelpincreasethedeploymentofrenewablesbyprovidingaguaranteedreturnoninvestmentaswellasmorepredictablepricing.TheproceedsoftheCFDinstrumentsaresupposedtobedirectedbacktoconsumers,eitherdirectlyorviainvestmentstargetedtoreduceenergyprices.ThenewRenewableEnergyDirectivewasformallyadoptedandActionPlanforGridswaslaunchedTheEuropeanUnionhasformallyadoptedthenewRenewableEnergyDirective(REDIII),raisingthe2030targetfortheshareofrenewableenergyintheEU’sfinalenergyconsumptionfrom32%to42.5%,withanaspirationtoreach45%.APAGE125IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026centralelementoftheregulationareprovisionstospeeduptheapprovalofnewrenewableenergyprojects.Specifically,renewableenergyprojectswillbedefinedasof“overridingpublicinterest”,reducingthelegaloptionstoobjectagainstthem.Inthetransportsector,memberstatescommittoeitherreducetheemissionintensityby14.5%orestablishabindingshareof29%renewableenergyby2030.Therearealsominimalrequirementsforvarioussourcesofbiofuelsintroduced.Forindustry,thegoalistoincreasetherenewableenergyshareby1.6%everyyear,withanadditionalspecifictargettosource42%ofhydrogenfromrenewablesourcesby2030and60%by2035.Inthebuildingsector,atargetof49%renewableenergyby2030wasagreed,withaminimumannualincreaseof0.8%until2026,andsubsequently1.1%through2030.InitsEUActionPlanforGrids,publishedinNovember2023,theEuropeanCommissionreinforceditspositionconcerningthecentralroleofelectricitygridstosupportamoredecentralised,digitalisedandflexibleelectricitysystem.Theplanrecognisesthechallengeofincreasedcapacityneedsandageinginfrastructure.Variousmeasuresareproposedtoenablethenecessaryinvestments.TheseincludetheImplementationofProjectsofCommonInterestplan,improvetheincentivesforinvestmentthroughregulatoryclarity,fasterpermitting,andpromotingfundingprogrammesforsmartgridsanddistributionnetworks.Thelong-termplanningofgridsisproposedtobeimprovedthroughfacilitatingthecommunicationandexchangesbetweenTSOs,DSOsandgenerators.GermanyAfterplummetingin2023amidweakindustrialactivity,electricitydemandgraduallyrecoversthrough2026ElectricitydemandinGermanydeclinedbyaremarkable4.8%in2023despitewholesaleenergypricescomingdownfromtheirpreviousrecordhighs.Demandreductionisespeciallyprominentinenergy-intensiveindustry,whichfacedadecreaseinproductionof13%duringthefirstsixmonthsof2023.Weanticipateagradualbutslowrecoveryindemandforelectricityintheindustrialsectorin2024,givensubduedenergyprices.EVandheatpumpsalesarethenexpectedtoresultinelectricitydemandgrowthof2.2%in2024,followedbyanaverage2.6%annuallyuntil2026.Atthesametime,weforecastfossilgenerationtocontinueitsdownwardtrajectory,withcoalandgasplunging20%and8%,respectively,peryear.In2024,weexpectrenewablegenerationtoreachmorethan60%oftotalgeneration,andtohaveanaverageannualgrowthrateof11.5%overthe2024-2026period.PAGE126IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026FavourableweatherconditionsandacceleratingdeploymentofsolarPVpushedrenewablegenerationupduring2023,withSolarPVaccountingformorethanhalfofthegrowth.Forthefirsttime,theshareofrenewablegenerationsurpassedthe50%-markintotalpowergeneration.Germanywasanet-importerofelectricityin2023,withabout12TWhofnetimports.Intherenewablessegment,solarPVreacheditsexpansiontargetsfor2023alreadyinOctoberandisforecasttocontinuegrowingrapidlytoreach23%ofgenerationin2026.Incontrasttorapidsolardevelopment,winddeploymentsfellshortofinstallationtargetsin2023,aspermittingchallengeshamperedfasterdeployment.Basedonthecurrentprojectpipeline,weexpectgrowthofaround12%inwindgenerationduringtheforecastperiod,bringingitsshareto35%ingenerationin2026.Year-on-yearchangeinelectricitygenerationinGermany,France,andItaly,2021-2026TWh806040200-20-40-60-80-100-120202120222023202420252026202120222023202420252026202120222023202420252026GermanyNuclearFranceRenewablesItalyCoalGasOthernon-renewablesNetchangeIEA.CCBY4.0.Note:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.InApril2023,thelastthreenuclearreactorsweretakenoffline,markingtheendofGermany’snuclearpowergeneration.Againstthebackdropofthecompletednuclearandplannedcoalphaseout,thegovernmentannouncedin2023itsso-calledKraftwerksstrategie,whichseekstotendergas-firedpowerplants,andtoenabledecarbonisedgenerationfromdispatchableunits,whichwillcomplementincreasingsharesofrenewables.Thetenderedvolumeforthenextyearsaggregatestoatleast10GWofhydrogen-readycapacityby2026,temporarilyrunningonnaturalgas,andanother4.4GWofso-calledhydrogen-firedsprinterplantsuntil2028,runningonhydrogenfromcommissioning,and4.4GWofhybridPAGE127IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026powerplantstobebuiltinlocationsthatwouldbeconnectedtoahydrogennetworkatalaterstage.Thegovernmentprolongedthetemporaryparticipationof1.9GWoflignite-firedreservecapacityinthemarkettosavegasoverthe2023/2024winterperiodincaseofatightEuropeangasmarket.ToaddressgridcongestionbetweenGermany'sRESresource-richnorthandthedemandcentresinthewestandsouth,followingACER’sdecision,theTSOsarecurrentlyexaminingfourdistinctconfigurationsforGermanbiddingzonesfromatotaloftwelvepotentialoptions.FranceArecoveryinnuclearpowergenerationreversesthe2022-2023declines,andisexpectedtoresumeitsupwardtrajectoryto2026Followingadversesupply-sidedynamicsstartinginlate2021,theFrenchelectricitymarketsawapartialturnaroundin2023.Electricitydemandcontinueditsdownwardtrend,fallingby3.4%versus4.1%in2022.Atthesametime,areboundinnuclearpowerplantavailabilityandarecoveryinrenewablepoweroutputboostedoverallelectricitygenerationanddroveareturntonetexportstowardneighbouringmarkets.WhiletheFrenchgovernmentextendedtheelectricitytariffshieldputinplacetoprotectcustomersfromtheworstof2022powerpricehighstotheendof2023,theregulatedmarketpricecap(whichappliestohouseholds,smallenterprises,andlocaladministrationsunderacertainsize)wasincreasedontwooccasions.Thetwopricehikes–15%inFebruaryand10%inAugust–weighedonconsumerbillsandelectricityconsumptionhabits,contributingtotheyear-on-yearfallinpowerdemand,notablythroughthefirstthreequartersoftheyear.Electricitygenerationfollowedanoppositetrendin2023,recoveringfromtherecordlowsreachedin2022linkedtoextensiveplannednuclearmaintenanceandthediscoveryofcriticalcorrosionproblemsatanumberofreactors.Nuclearoutputrecoveredbyalmost15%year-on-yearin2023asreactorsprogressivelycamebackonline.Nevertheless,nuclearoutputremainedapproximately13%belowthe2017-2021average,returningtotypicalmonthlygenerationlevelsinSeptemberandOctoberbeforeadditionalunplannedmaintenanceissuesimpactedoutputinQ42023.PAGE128IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Frenchnuclearpowergenerationbymonth,2017-2023TWh452017-21range402017-21average3520223020232520IEA.CCBY4.0.15JanFebMarAprMayJunJulAugSeptOctNovDecSource:IEAanalysisbasedondatafromRTE,éCO2mix.ArecoveryinrenewablepowergenerationalsohelpedFrancetoreturntoitstraditionalelectricityexporterstatusin2023.Thankstoarecord5GWofsolarPVandwindcapacityadditionsin2022andmorefavourableweatherconditions,combinedwindandsolarproductionincreasedbyaround25%in2023,makingupforrelativelymodestgrowthinthepreviousyear.Hydropowergenerationrecoveredfrom2022lows.Totalrenewablepowergenerationgrewby16%in2023,helpingreducepowersectorgasburnbyabout30%anddrivethe9%growthinoverallpowergeneration.InMarch2023,theFrenchgovernmentpasseditsRenewableAccelerationBill,aimedatfacilitatingthedeploymentofrenewabletechnologies,notablythroughtheaccelerationofpermittingproceduresandgarneringmorecivilsocietybuy-inthroughincreasedparticipationoflocalactors.Nevertheless,thebillwasmetwithamixedreceptionfrommarketandpoliticalactorsandmuchofitsimpactislikelytobefeltonlylaterinthedecade.Electricitydemandissettogrowbyanannualaverageof2.6%overtheoutlookperiod,recoveringtopre-crisislevelsonlyby2026.Averageannualtotalgenerationgrowthof4%shouldensureastrengtheningexportmarginfortheFrenchmarketoverthecomingyears.Frenchrenewablepowerproductionisexpectedtoincreaseatanaveragerateofapproximately10%through2026,thankstomodestcapacityadditionsandarecoveryinhydropoweroutputtotypicallevels.Thisgrowthshouldleadtoa76%reductioningas-andcoal-firedgenerationfrom2022levels.By2026,30%ofpowergenerationissettocomefromrenewables,upfromabout24%in2022.PAGE129IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026ItalyGas-firedsupplywillcontinuetoplayanimportantrole,butitsshareintotalgenerationisexpectedtodeclinewithexpandingrenewablesElectricitydemandinItalydecreasedby2.9%in2023,followingthe0.8%reductionin2022.Despitewholesaleenergypricesfalling,thedecreaseindemandpersisted,amidaslowdownintheeconomyandsuccessesinenergysavings.Inthebuildingsector,thesuperbonusschemehashelpedreduceelectricityuse.AsofOctober2023,Italianhouseholdshadappliedformorethan400000energyefficiencyprojectsfortaxdeductionsunderthesuperbonusprogramme,withapproximately78%oftheseapplicationssubmittedin2022and2023.Someoftheslowdownineconomicgrowthisduetofactorssuchasweakdomesticdemandforgoodsandservicesandreducedindustrialactivity,particularlyinsectorswithhigherproductioncosts.Providedthemanufacturingsectorstartsrecoveringin2024,weexpectdemandtogrowby1.8%peryearonaverageoverthe2024-26period.Renewablegenerationincreasedby16%in2023.Hydropowerexperiencedarecovery,withhigherreservoirlevelsthanin2022,transitioningfromayear-on-yeardecreaseof38%in2022toanincreaseofaround35%in2023.Theannualgenerationfromvariablerenewablesalsoincreasedin2023,withwindpowergrowingby13%andPVgenerationbyaround7%.Thisgrowthwaslargelydrivenbyincentivesforresidentialphotovoltaicinstallations,whichrepresented47%ofthePVpowercapacityaddedinthefirsthalfof2023.In2024,theshareofrenewablesintotalgenerationissettosurpass50%.ThepositivetrendinrenewablepowerisexpectedtocontinuewiththenewNationalIntegratedPlanforEnergyandClimateproposedin2023.Coalfellto7%ofthegenerationmixin2023,a3percentagepointreductionfromtheyearbefore.Thedeclinewasinfluencedbyrestrictionsofcoal-firedpowergenerationtoaminimum,asthecountryscaledbackemergencymeasuresimplementedin2022duetorisksofgasshortage.Itwasalsoaresultofthecombinedeffectsoflowerdemandandhigherrenewablegenerationandimports.Despitea20%year-on-yeardeclinein2023,naturalgasremainsamajorfuelsourceforpowerinItaly,withanestimatedshareof43%ingeneration.However,renewablessurpassedgasin2023withashareof45%.Outto2026,weexpectgas-firedgenerationinItalytodeclinebyaround1.6%onaverage,itssharefallingto39%in2026.PAGE130IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026TheItaly-Austriainterconnector,constructionofwhichbeganinNovember2020,wascommissionedinDecember2023.Theinterconnectordoublesthecurrentimportcapacityofbothcountriesto300MW.SpainStrongsolarPVexpansionissettodisplacefossil-firedgenerationFollowinga2.3%declinein2022,electricitydemandinSpainfellbyafurther2.3%in2023,tobelowthe2020’sCovid-19low.Themaindriverhasbeenthedeclineofindustrialproduction.Despitegasandelectricitypricesfallingsignificantlyfromlastyear’slevels,industrialdemandcontinuedtodeclineduringthefirstthreequartersandrecoveryhasbeenslow.Onthegenerationside,PVexpansioncontinues,growingfrom15.3GWbytheendof2021to20GWbytheendof2022and22.7GWbytheendofSeptember2023.PVreachedaround16%ofthegenerationmixafterhavinggrownaroundmorethanone-third.Self-consumptionfromdistributedPVgenerationhasbeenincreasinginSpain.Windcapacityroseonlyslightly,from30.2GWin2022to30.4GWin2023.Theexpansionofrenewableshasgivenrisetoanincreaseintheutilisationofpumpedhydroofalmost50%comparedwith2022.Thedeclineintotalgeneration(around4.5%)washigherthanthedropindemand,aselectricityexportsdecreasedbyroughly30%followingthesurgethatoccurredin2022duetohighgaspricesandtheIberianExceptionmechanism.Mostofthedropwasincombined-cyclegeneration,whichisestimatedtohavedecreasedbyone-third.CoalpowergenerationinSpainwillcometoanendduringtheforecastperiodasthecountry’slastfourcoalplantsoperating(Aboño,SotodeRibera,LosBarrios,AsPontesandesMurterar)haveannouncedconversiontogas,alternativeuseslikehydrogenorclosure.Inthemeantime,theSpanishSupremeCourthasauthorisedNaturgytotemporarilyclosetencombined-cyclesafteralongjudicialcase.Atthetimeofthewritingofthisreport,thecompanyhadnotyetannounceditsfinaldecisionfortheplants,withimplicationsforthesecurityofsupplyandfutureregulationofcapacitymechanisms.TheIberianExceptionmechanismwasextendeduntiltheendof2023,despiteaneasinginthegaspricesfollowingthehighsin2022thatmotivateditsintroduction.Inthecomingyears,successfulintegrationofgrowingrenewablegeneration(particularly,solarPV),especiallyinmonthswithweakerdemandandstrongsunlight–typicallyAprilandMay–willbeimportant.Thescheduleofnuclearclosureisstillforeseentotakeplacefrom2027to2035.PAGE131IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Year-on-yearchangeinelectricitygenerationinSpain,UnitedKingdom,andTürkiye,TWh2021-202650403020100-10-20-30-40-50202120222023202420252026202120222023202420252026202120222023202420252026SpainNuclearUnitedKingdomRenewablesTürkiyeCoalGasOthernon-renewablesNetchangeIEA.CCBY4.0.Note:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.UnitedKingdomAscoal-firedgenerationisphasedoutby2024,gas-firedoutputisalsosettodeclineasrenewablescontinuetoexpandElectricitydemanddeclinedby3.4%in2023ashighenergypricesandsluggisheconomicgrowthslowedelectricityconsumption.2023sawlargeyear-on-yeardeclinesincoal(-36%),gas(-20%)andnuclear(-15%)powergeneration.Renewablegenerationdeclinedbyaround5%asgainsinwindandsolarrespectively,wereoffsetbyalargedecreaseofmorethan15%inbiomasspowergenerationduetomaintenanceoutages.Forthe2024-2026period,weforecastelectricityconsumptiontoincreasebyslightlybelow2%peryearonaverage.Coal’sshareintheelectricitygenerationmixissettodeclinetoalmostzeroin2024.Electricitygenerationfromnuclearisexpectedtoremainrelativelyconstantuntil2026,whena15%cutinnucleargenerationwilloccurasplantsaredecommissioned.Gas-firedgenerationisforecasttodeclinebyanannualaveragerateof8%.Renewablesareforecasttoincreasebymorethan14%peryearonaverage,withmostofthegenerationcomingfromwind.AportionoftheUK’sexistingsupplyofelectricityhasbeensecuredbyEDFextendingtheoperatinglifeoftwonuclearpowerplantsuntilMarch2026,whichprovide5%ofBritain’scurrentpowersupply.Coal-firedgenerationwasnecessaryPAGE132IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026toensureelectricitysupplyin2023.NationalGridESOwasforcedtocalluponreservecoalpowerplantsduetotightsupplyasacoldsnapinMarchincreaseddemandforheatingandaheatwaveinJuneraisedairconditioningdemand.Followingtheseeventstheplantsweredecommissioned,inlinewiththeUK’scommitmenttophaseoutcoal-firedelectricitygenerationby2024.In2022,theUnitedKingdombecameanetelectricityexporterforthefirsttimeascontinentalEuropeboughtcheaperUKelectricitytocompensatefornuclearplantoutagesandreducedhydrooutput.Thiswasreversedin2023whentheUK’snetimportsamountedtoabout25TWh.AresponseonhowtodeveloptheUK-ETSconsultationwaspublishedinJune2023.From2024,the2021-2030caponemissionswillbeloweredfrom1365MtCO2to936MtCO2.Othermeasureshavebeentodistributeallowancesequivalentto53.3MtCO2fromreservesbetween2024and2027aswellastoincreaseindustry’sfreeallocationofallowancesto40%oftheannualcapfrom37%.EmissiontradershavesuggestedthatthetighteningofthecaponemissionsisweakenedbythesemeasuresandiscontributingtotheUKcarbonallowancepricetradingatalowerpricethantheEUprice.TheCBAMislikelytoleadtoleviesonexportssuchassteelandaluminiumtotheEuropeanUnionasaresultofthelowercarbonpricingintheUnitedKingdom.TheDepartmentforEnergySecurityandNetZeropublishedtheirresponsetotheconsultationfortheReviewofElectricityMarketArrangements.Awiderangeofreformswereproposedtoincentivisedecarbonisation,increasesecurityandensureaffordableprices.Onesuchproposedreformistosplitthemarketintorenewableandnon-renewablepoolswherebycheaper,butmorevolatileprices,couldbeaccessedfromarenewablepowerpool.Anotherproposedreformistoswitchtoazonalornodalpricingsystemtousethenetworkmoreefficientlyandavoidgridcongestion.Whilethevastmajorityofthosewhoparticipatedintheconsultationagreedthatpowermarketreformisnecessary,thereisalackofconsensusonthedegreeandspeedatwhichthereformsshouldbeimplemented.IrelandBoomingdatacentresectorisdrivingupelectricitydemand,resultinginIrelandhavingthehighestgrowthrateinEuropeElectricitydemandrose2%in2023,makingIrelandoneofthefewcountriesinEuropethatrecordedanincreaseinelectricitydemandfortheyear.2023sawayear-on-yearfallincoal-firedgenerationof17%andamodestdeclineingas-firedoutputof1.2%.RenewablegenerationremainedrelativelystableasincreasesinPAGE133IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026solar,hydroandbiomasspowergenerationwereoutweighedbyadeclineinwind.IrelandisinPhase4oftheIEA’sphasesofsystemintegration,wherevariablerenewablesmeetalmostalldemandinsomeperiods.Thisismainlyduetowindpower,whichmadeupabout33%oftotalpowergenerationin2023.Forthe2024-2026period,weestimateelectricityconsumptiontogrowbyanaverageofalmost7%peryear,whichisthehighestdemandgrowthrateinEuropeinourforecast.Thisstrongincreasewillbedrivenbyarapidexpansioninthedatacentresector.Weforecastaverageyear-on-yeardeclinesingas-firedelectricityof0.5%outto2026,withstrongdemandgrowthpreventingmoresubstantialdeclinesdespitestronggrowthinrenewables.Weexpectrenewablestogrowfasteroverthisperiodatanannualaveragerateofaround13%,largelydrivenbywind.InIreland,datacentresareestimatedtohaveconsumedabout5.3TWhofelectricityin2022,upby31%comparedto2021.Thisaccountsfor17%ofIreland’selectricitydemand,equivalenttotheconsumptionofallurbandwellings.Consideringcurrentprojectionsandannouncedplans,weestimatethatthiscouldreacharound12TWhby2026,whenitwillmakeupmorethan30%ofnationalelectricitydemand.Thestate-ownedTSOEirGridhasimposedadefactomoratoriumondatacentresinGreaterDublinduetoarapidgrowthindatacentrestock,hencegridcongestionespeciallyinthatarea.Themoratoriumprohibitsthesubmissionofdatacentreplanningapplicationsfromlate2022to2028butdoesnotimpedecontractsthatarealreadyinthepipeline.SomedatacentreshaveinsteadconnectedtoDublin’sgasnetworktoproducetheirownpowerasanalternativetoconnectingtoIreland’selectricitynetworkbutthiswork-aroundwasalsoclosedbythegovernment.Ireland’selectricitysystemexperiencedanalertinJune,warningofthepossibilitythatsupplymayfallshortofdemand.Thiswasattributedtoacombinationofbothlowwindandsolarpower,andoutagesatseveralgenerators.ConcernsaroundpoweroutageshavepromptedtheMoneypointcoal-firedpowerstation,originallyplannedtobedecommissionedin2025,tobeconvertedfromcoaltooilandhaveitslifetimeextended.Furthermore,gas-firedpowerstationsarealsobeingbuilttooperateasemergencybackupgeneratorsforpeakdemand.IrelandcurrentlyhasasingleinterconnectiontotheUKmarketwithacapacityof500MWandwilldoublethiscapacityin2024withitsGreenlinkinterconnectiontoWales.By2027,itwillhaveitsfirstconnectiontocontinentalEuropethrougha700MWinterconnectiontoFrance,theCelticInterconnector.ThisprojecthasbeendesignatedaProjectofCommonInterestbytheEuropeanCommissionasitisaninfrastructureprojectthatlinkstheenergysystemsofEUcountries.Thisallowstheprojecttobenefitfrombetterregulatoryconditions,anacceleratedplanningprocessandfinancialsupport.PAGE134IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026DenmarkTotalshareofwindandsolarPVinelectricitygenerationissettoreachthe70%milestonein2024,upfrom63%in2023Electricitydemandincreasedbyapproximately1%in2023,makingDenmarkamongthefewcountriesintheEuropeanUniontohaverecordeddemandgrowthin2023.Coal-firedgenerationdeclinedby35%andadecreaseingas-poweredgenerationof10%wasobserved.Renewablegenerationgrewby5%withsolarpowergenerationaccountingforasignificantportionofthisgrowth,althoughwindcontinuestobethelargestcontributortotherenewablegenerationmix.Forthe2024-2026period,weestimateelectricityconsumptionwillgrowbyanaverageof3.3%peryear,largelysupportedbytheexpandingdatacentresectoraswellasnewelectricvehiclesandheatpumps.Weforecastsignificantgrowthinrenewables,increasingbyaround7%peryearonaverage,withlargeamountsofsolarandwindpoweredgenerationexpansionoverthistimeframe.In2024,Denmark’sVREshareintotalgenerationisexpectedtoreach70%.Denmarkisthecountrywiththehighestshareofvariablerenewableenergy(solarPVandwindpower)intheworldatanestimated63%ofelectricitygenerationin2023.DenmarkisinPhase5ofsystemintegrationofrenewablesandmaintainingpowersystemstability.Thishasbeenaddressedsofarthroughacombinationofelectricitytradethroughinterconnections,increasingpowerplantflexibility,demandflexibility,aswellasothermeasures.Denmarkhasexpandeditsinterconnectioncapacitywiththecompletionofthe1400MWVikingLinkInterconnector.Theworld’slongestlandandsubseainterconnectorconnectsDenmarktotheUnitedKingdominadditiontoexistinginterconnectionswithGermany,Sweden,theNetherlandsandNorway.ThisiskeyforDenmarkasitcanexportelectricityduringperiodsofsurpluswindpowergenerationandimportelectricityunderlowwindconditions.Denmarkpassedabilltoallowdirectelectricitylines,openingupthepossibilityofPower-to-Xprojectswhichconnectpowerproducerstopowerconsumersdirectly,bypassingthepowergrid.ThissetthefoundationforaworldfirstPower-to-Xtenderwherebystatesupportwouldbeprovidedforprojectsusingabundantandcheapelectricityfromwindfortheelectricity-intensiveprocessofproducinggreenhydrogen.DenmarkplanstoutiliseitsoffshorewindresourcestodevelopenergyislandsintheNorthSeathatwillgenerateupto10GWofelectricitywhenfullyexpanded.Atenderhasthusfarbeendelayedasconsultationiscurrentlyongoingtomaketheprojecteconomicallyviable.PAGE135IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026TürkiyeReducedhydropoweramiddroughtsresultedinincreasedcoal-firedoutputtomeetdemandElectricitydemandwaslargelyunchangedyear-on-yearin2023amidmoderateeconomicgrowth.Despiteasurgeindemandforairconditioningandagriculturalirrigationinthesummer,themilderwintertemperaturesof2023comparedtothepreviousyearputdownwardpressureonelectricitydemandgrowth.Theeconomygrewmoderately,withGDPgrowthfor2023estimatedatalmost4%bytheIMF,downfrom5.5%in2022.Weexpectanaverageannualincreaseinelectricitydemandofmorethan3%indemandfrom2024to2026alongsideacceleratingeconomicgrowth.Followingtherecoveryin2022,hydropoweroutputdeclinedby4.5%in2023duetoanextendeddrought.Windgenerationremainedatsimilarlevels,whilePVgenerationincreasedby24%.Thisyear'sinvestmentsinsolarpowerachievedasignificantmilestone,withthecountryreachingmorethan10GWofsolarpowercapacity.Overall,theshareofrenewablesintotalpowergenerationremainedstablecomparedto2022.Whilerenewablegenerationfellslightlyin2023comparedto2022duetoadeclineinhydropower,weforecastanupswingthisyeardrivenbyanassumedrecoveryinhydropowerandadvancementsinsolarandbioenergy.By2026,thesefactorswillcontributetorenewablescomprising53%oftheelectricitymix,upfrom42%in2023.Türkiye'seffortstoincreaselow-carbonenergyby2035includethedevelopmentofnuclearenergywithcommercialproductionofitsfirstreactorexpectedtostartin2025.Thecountryaimstoachieveaninstallednuclearpowercapacityexceeding20GWbythe2050s.Currently,thecountryisindiscussionswithRussia,China,SouthKorea,theUnitedStatesandtheUnitedKingdomregardingconstructionofitssecondandthirdnuclearpowerplants,aswellastheimplementationofsmallmodularreactors(SMRs).Gas-firedpowergenerationfellby8%in2023amidcontinuingspikesinnaturalgasprices,whilecoal-firedoutputrose3.7%comparedtothepreviousyear.InJune2023,TürkiyeemergedasEurope’slargestcoal-firedelectricityproducer.Nonetheless,weexpectdeclinesinbothcoalandgas-firedgenerationthroughouttheforecasthorizonasrenewablegenerationcontinuestogrow.Thisseescoal'ssharedecliningfrom36%ofelectricitygenerationin2023to25%in2026,andgasfalling4percentagepointsto17%overthesameperiod.PAGE136IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026UkraineTargetedattackscauseddamagestoenergyinfrastructure,limitingelectricitysupplyUkrainianpowersystemstakeholdershaveusedthesummermonthstorestoreinfrastructuredamagedbyRussia’sover1200droneandmissileattacksinthewinterof2022/23andtobolsterdefencesforthewinterseason,includingpurchasesofback-upequipmentlikegenerators,batteriesandspareparts.TheseattackscauseddamagesestimatedatUSD10billionandhavecausedthesystemtooperateinemergencymodewithlimitedsafetymargins.December2023sawaparticularlytightsupply-demandsituation,withnearly500settlementshavingfacedblackouts.Adverseweatherconditionsanddamagestothepowerplantsduetoshellinglimitedelectricitysupplyatatimewhenelectricitydemandsoaredduetoincreasedheatingneedsbecauseofcoldweather.Aroundhalfofthehigh-voltagetransformersontheUkrainegridhavebeendamagedordestroyed,whilepowercapacityhasbeenreducedbynearly50%ofitspre-2022levels,from37GWto19GW.Asaresult,electricitydemandinUkrainestayedroughly20%belowpre-2022levels,despiteincreasingslightlyin2023.Nuclearremainsthelargestsourceofelectricitygenerationataround60%oftotaloutput.Renewablessuppliedaround10%,mostlyhydro(6%),followedbysolarPV(2%).Forecastsforsupplyanddemandarehighlyuncertain,butitisanticipatedthatdemandwillincreaseslightlyoverthenextthreeyears.Themostlikelysourceofsupplyincreasewouldbefromnuclearpower,followedbyrenewables.UkrainesynchroniseditsgridwiththeEUelectricitygridinMarch2022andhashaltedpowerexchangeswithRussiaandBelarus.ImportsfromMoldovahaveincreasedwhileoveralltradehasdecreased,leavingabalancedexternalposition.PAGE137IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026EurasiaFossilfuelsremainthedominantsourceofsupplyfortheregion’selectricitygenerationCountriesinEurasiapostarecoveryinconsumptionlevelsin2023despitethedepressedeconomicclimate.Followinganannualaveragegrowthrateof1.5%in2015-2019,Eurasia’selectricityconsumptiongrowthslowedto1%in2022.Preliminarydatasuggeststhattheregion’selectricitydemandgrowthreboundedtoaround1.5%in2023.Russiaaloneaccountedforabouthalfofincrementalelectricitydemandin2023.Theregion’sdemandgrowthisexpectedtoremaindepressedcomparedtothepre-warperiod,atanannualrateof1.2%overthe2024-2026period.Fossil-firedgenerationissettocontinuetodominateEurasia’selectricitymixatashareofaround66%overtheforecastperiod.Whilethepaceofrenewablesdeploymentremainsslow,improvingnuclearavailabilityinRussiaisexpectedtoreducetheCO2intensityofpowergenerationfrom388gCO2/kWhin2023to382gCO2/kWhin2026.Year-on-yearpercentchangeinelectricitydemand(left)andyear-on-yearchangeinelectricitygeneration(right),Eurasia,2019-20266%TWh1205%1004%803%602%401%200%0-1%-20-2%-40-3%-602019202020212022202320242025202620192020202120222023202420252026HistoricaldemandCoalGasUpdatedforecastNuclearOthernon-renewablesPreviousforecast(July2023)RenewablesNetchangeIEA.CCBY4.0.Note:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.PAGE138IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026RussiaElectricitydemandisestimatedtohaveincreasedbyaround1%in2023,butsignificantuncertaintyremainsRussianelectricitydemandisdifficulttoestimate,givenitsongoingwaragainstUkraine.Russia’selectricitydemandisestimatedtohavegrownbyaround1%in2023,similartoits2022growthrate,despitethedepressedindustrial,manufacturingandcommercialactivitycomparedtothepre-warperiod.Russia’soverallelectricitygenerationincreasedby0.8%y-o-yinthefirstelevenmonthsof2023.Fossil-firedthermalgenerationroseby2%andaccountedfor63%oftotalpowersupplyduringthisperiod.Higherfossil-firedgenerationwasduetolowernuclearoutput,downby3.5%y-o-y.Hydropowergenerationincreasedby0.7%y-o-y.Solarandwindpowergenerationcontinuedtogrowstrongly,bothupbyaround10%.Russia’selectricityexportstoChinadroppedbyover25%y-o-yinthefirstelevenmonthsof2023amidstlowerelectricitygenerationinRussia’sFarEast.TheregionsufferedfromextremeheatwavesandlowerhydroavailabilitywhichdepresseditsabilitytoexportelectricitytoChina.Electricitydemandgrowthisforecastataslowergrowthrateof0.7%onaveragein2024-2026.Nevertheless,thereissignificantuncertaintysurroundingRussia’seconomicdevelopmentanditsstructure,whichcanimpactelectricitydemandtrendsinthecountry.Theshareoffossil-basedthermalgenerationinthecountry’spowermixissettomarginallydecline,tojustabove60%onaverageinthemediumterm.Thebuild-upofwindandsolarcapacityremainsslow.Unit1oftheKurskIInuclearplantisexpectedtobecommissionedin2025.KazakhstanPowerdemandmovesapacewitheconomicgrowth,withgas-firedgenerationrisingtomeettheadditionalconsumptionElectricityconsumptioninKazakhstanreturnedtogrowthandincreasedbymorethan2%y-o-yinthefirsttenmonthsof2023,followingadeclineof1.4%in2022amidstslowereconomicgrowth.Fossil-basedthermalgenerationaccountsfornearly90%ofthecountry’sgenerationmix,withcoalproviding60%whilegas-firedpowerhasashareof27%.Theshareofcoalisexpectedtodecreaseto56%by2026,whilethatofgasrisesto32%.Hydropowergenerationdeclinedby4.6%y-o-y,whilefossil-basedthermalgenerationfellby1%comparedtothesameperiodof2022.ThegapbetweendemandanddomesticgenerationwasbridgedbyhigherelectricityimportsfromPAGE139IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Russia,whichsurgedby75%y-o-yinthefirsttenmonthsof2023.Domesticpowergenerationwaslargelysupportedbystrongerwindpoweroutput,whichincreasedsubstantiallyby35%y-o-y.PowerdisruptionsandscheduledcutoffshavebeenongoinginmajorcitiesandadjacentregionsoftheinterconnectednationsofKazakhstan,Kyrgyzstan,andUzbekistansince2022,primarilyattributedtogridimbalancessuchassystemoverloads.In2023,WesternKazakhstanexperiencedfrequentcontrolledpoweroutageslastinguptofivehourswhiletheregionalauthoritiesdevelopedastrategytoprioritizeelectricitysupply.Kazakhstanhasrecentlybeenmakingeffortstomodernizeitsoutdatedelectricitygridinfrastructureaftergasexportswereinterruptedbyenergycrisesinthecountry.Kazakhstan’selectricitydemandisforecasttogrowbyaround2.2%peryearbetween2024-2026,largelytobemetbyexpandinggas-firedpowergeneration.TherearealsoplansforRussia’sInterRAOtoconstructthreecoal-firedpowerplantsinKazakhstan,whichwouldberelevantoutsideourforecastperiod.OtherEurasiaFollowingthestrongreboundin2021of4%,electricitydemandgrowthslowedinotherEurasianmarketstoanaverageof3%peryearin2022and2023.InUzbekistan,preliminarydataindicatesthatthecountry’selectricityoutputroseby3%inthefirstelevenmonthsof2023comparedtothesameperiodayearbefore.Uzbekistancontinuedtoexpanditspowergenerationcapacitiesin2023.Gas-firedgenerationaccountedforjustover80%ofpowergeneration.TheShirinthermalpowerplant(1.5GW)startedoperationsinOctober2023andisexpectedtoramp-uptofulloperationsinQ12024.AccordingtotheMinistryofEnergy,around1.5GWofwindandsolarcapacitywastargetedtobeinstalledin2023.ThecontinueddeclineinnaturalgasproductioninUzbekistan(downby9.5%y-o-yinthefirstelevenmonthsof2023)continuestoweighonelectricitysupplysecurity.Ingas-richTurkmenistan,electricitygenerationrosebyanestimated2.7%y-o-yinthefirstelevenmonthsof2023.TurkmenistanexportselectricitytoAfghanistan,Iran,KyrgyzstanandUzbekistan.TurkmenistanstartedelectricityexportstoKyrgyzstaninAugust2021anddeliveriesreached1.6TWhin2023.InOctober2022,TurkmenistanandUzbekistanagreedtorampupelectricitysuppliesto4TWh/yr,whichcouldimproveelectricitysupplysecurityinUzbekistan.InAzerbaijan,electricitydemandgrowthisestimatedtohaveeasedto1%in2023frommorethan4%in2022,markingafurtherslowdowncomparedtothe7%reboundrecordedin2021.Thecountry’selectricitysystemisalmostexclusivelygas-firedpowered.Fossil-firedthermalgenerationremainedstablein2023,asrenewablescontinuedtoincrease.Hydropoweroutputroseby15%,whilewindPAGE140IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026generationfellby30%.Solarpowergenerationroseby30%.Overall,theshareofrenewablesinAzerbaijan’spowerremainedbroadlystableataround6%.ElectricitydemandinEurasiaexcludingKazakhstanandRussiaisexpectedtoriseatanaveragegrowthrateof3.5%peryearinthe2024-2026period.Thiswillbelargelysupportedbytheregion’srisingpopulationandeconomicexpansion,althoughthemacroeconomicoutlookhasworsenedsinceRussia’sinvasionofUkraine.PAGE141IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026MiddleEastNaturalgas-firedgenerationcontinuestogrow,butrenewablesgatherpaceMiddleEastelectricitydemandgrowthisestimatedtohaveincreasedby2%in2023,downtwo-thirdsfromthe3.3%observedin2022amidweakereconomicactivityanddespitehighertemperaturesboostingcooling.Forthe2024-2026outlookperiod,weforecaststrongergrowthofanaverage3%,ledhigherbyeconomicgrowth.Fossilfuel’sshareinelectricitygenerationisexpectedtodeclinefrom93%in2023to90%by2026.Inparallel,theshareoflow-emissionssourcesrisesfrom7%to10%.Nuclearpowergenerationincreasedby50%in2023versus2022,andisforecasttoriseby29%in2024and14%in2025,beforeplateauingin2026.Atthesametime,renewablegenerationrosebyabout20%in2023,andissettoincreasebyasimilar23%in2024beforeeasingto11%onaveragein2025-2026.Year-on-yearpercentchangeinelectricitydemand,MiddleEast,2019-202610%8%6%4%2%0%-2%201920202021202220232024202520262019202020212022202320242025202620192020202120222023202420252026MiddleEastSaudiArabiaUnitedArabEmiratesHistoricaldemandUpdatedforecastPreviousforecast(July2023)IEA.CCBY4.0.Annualpowergenerationemissionsremainedlargelyunchangedin2023,asincreaseduseofnuclearandrenewablesinpowergenerationoffsethigherfossilfueluse.However,from2024to2026,electricitygenerationemissionsaresettoincreasebyanaverageannualgrowthrateof1%,asnaturalgas-firedgenerationgrowsby2.4%peryear.Oil-firedoutputisexpectedtodeclineonaveragebylessthan1%peryear.CO2intensityofpowergenerationintheMiddleEastdeclinedPAGE142IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026by2.3%to552gCO2/kWhin2023,amidtherisingshareofnucleargenerationledbyintheUAE.Overthe2024-2026outlookperiod,CO2intensityisforecasttofallfurther,byanaverageannual1.7%to497gCO2/kWh,astheshareofnuclearandrenewablesriseintheregion’selectricitygenerationmix.SaudiArabiaCoolingandwaterdesalinationisexpectedtosupportelectricitydemand,asrenewablesmakesignificantgainsSaudiArabia'selectricitydemandrosebyamodest1%in2023,downfrom2.5%in2022amidweakereconomicgrowth.Thecommercial,governmentandindustrialsectorsdominateddemandgains,withcoolingandwaterdesalinationtheprimarysourcesofconsumption.Coolingalonerepresentsaround70%ofSaudiArabia'selectricitydemand.Waterdesalinationwillalsodrivedemandgrowthintheforecasttime-frame.2Thecountryisthelargestproducerofdesalinatedwaterglobally,with70%ofSaudiArabia'sdrinkablewaterproducedbydesalination.For2024-2026,weexpectastronger2.6%boostinelectricitydemand,supportedbyeconomicgrowthandincreasedelectrification.SaudiArabia'stotalgeneratingcapacitystoodat82GWattheendof2022.Naturalgas-firedpowerprovidedmorethan60%ofgeneration,theremainingcominglargelyfromoil-firedplants.Althoughthecountrycurrentlydoesnothavenuclearpowercapacity,itestablishedtheNuclearEnergyHoldingCompanytoactasthenationalnucleardeveloper.On28September2023,thecountryannouncedplanstoinitiallybuildtwo1.4GWreactors,withagoaltoincreasecapacityto17GWby2040.Furthermore,thecountryislookingtodevelopelectricityinterconnectionswithitsneighboursandbeyond.TheIndia-MiddleEast-Europe(IMEC)corridorinvolvesinfrastructureprojectsthatwouldenabletransportofelectricitybetweenAsiaandEuropethroughSaudiArabia.Inaddition,InSeptember2023SaudiArabiaandtheUnitedStatessignedanMOUtodevelopaprotocolforestablishinggreentransitcorridorsthroughtheKingdom.SaudiArabiaaimstoreach50%ofrenewablesinitsgenerationmixby2030.In2023,thecountryshortlistedcontractorsfor1.5GWofsolarPVprojectstobe2Whilethereisnocleardesalinationcapacitytargetinthecountry,keyactorssuchasthestate-ownedSalineWaterConversionCorporation(SWCC),whichisthecountry'slargestoperatorbycapacity,maderecentannouncementssayingthat8ofits13thermaldesalinationplants(94%ofitsproductionfromthermaldesalination)areeitherbeingreplacedwithreverseosmosisorunderconstruction.Inaddition,SWCCaimsfor30%ofitsproductiontocomefromrenewablesources,includingsolarPV,whichsignalsanincreaseinpowerdemandinthecomingyears.PAGE143IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026commissionedby2026.Inaddition,throughtheNeomGreenhydrogenproject,theKingdomexpectstoproduce600t/doflowemissionhydrogenand1.2Mt/yofgreenammoniapoweredby3.9GWofrenewableenergyoverthesametimeframe.Theprojectreachedafinalinvestmentdecision(FID)in2023.Renewablegeneration,thoughgrowingrapidly,isexpectedtoaccountforonlyaround4%ofSaudiArabia'stotalgenerationin2026,upfrom1%in2023.Year-on-yearchangeinelectricitygenerationintheMiddleEast,2021-2026TWh6050403020100-10-20-30202120222023202420252026202120222023202420252026202120222023202420252026MiddleEastSaudiArabiaUnitedArabEmiratesCoalGasNuclearOthernon-renewablesRenewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.UnitedArabEmiratesTheshareofrenewablesinelectricitygenerationissettoreach12%in2026,morethandoublethe2022levelIntheUAE,electricityconsumptionrosebyanestimated3%in2023,followinganincreaseof4%in2022.Weanticipatetotalelectricitydemandtoexpandatanannualaveragerateofaround2.6%overthe2024-2026period.Thecountryisaimingtoachieveatargetof50%ofelectricvehiclesontheroadby2050.Whileanofficialfederal-levelmedium-termtargetforEVpenetrationhasnotbeenannounced,thereareambitiousplansmappedouttoinstall70000chargingpointsthroughoutthecountryby2030.Atthesametime,DubaiincreaseditsannualgovernmentprocurementtargetforEVsandhybridvehiclesto20%in2025and30%in2030.Anotherkeysectoriswaterdesalination.AbuDhabiisexpectingtomeetover90%oftotalwaterdemandthroughreverseosmosisdesalination.PAGE144IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Thetotalshareofrenewableenergyinthegenerationmixincreasedsignificantly,from5%in2022to8%in2023.TheEmiratesWaterandElectricityCompany(EWEC)intendstoincreaseAbuDhabi'stotalsolarpowercapacityto7GWby2030.Currenttotalpowerdemandisestimatedat7.7GW.Moreover,AbuDhabiaimstoproduce60%ofpowergenerationfromnuclearandrenewablescombinedby2035.Atthefederallevel,thistargetreaches50%by2050.Afterfinaltestinginlate2023,theUAEisgettingreadytobringonlinethefourthreactoroftheBarakahnuclearplantinearly2024.Withthisnewestaddition,theplantisexpectedtomeetover25%ofthecountry'spowerdemand.Whilenucleargenerationgrewbyabout70%in2023,thebiggestshareinelectricitygenerationremainsgas,accountingformorethan70%oftotalsupply.Theshareofnaturalgasinthecountry'spowermix,however,isexpectedtodeclineto64%by2026asnucleargenerationrisesandrenewablesdeploymentaccelerates.Duetothelargeincreasesinbothrenewableandnucleargeneration,poweremissionsfellby11%in2023.Weexpectafurthersharpdecreaseof9%in2024asthefourthunitoftheBarakahnuclearpowerplantbecomesoperational,followedbyagradualincreaseasrenewablesonlypartiallymeetsdemandgrowthto2026.Therenewableshareinelectricitygenerationissettoriseto12%in2026,whiletheshareoflow-emissionssources(nuclearandrenewablestogether)reaches36%.Onthedemandside,theAbuDhabiDistributionCompany(ADDC)committedtoinvestingAED20million(aroundUSD5.4million)inair-conditioningoptimisation,whichwouldcoveraround850mosquesintheAbuDhabi,includingthemassiveDhafraregionthatcoversnearlytwo-thirdsoftheemirate.Thecompanyestimatesemissionssavingstoreach26GWhand4600tonnesofCO2annually.Thismeasurefeedsintothecountry’sDemandSideManagement(DSM)andEnergyRationalisationStrategy,whichaimtoreduceoverallelectricityconsumptionby22%andwaterconsumptionby32%by2030.OtherMiddleEastKuwait’sinstalledpowercapacityisjustover20GW,ofwhichover99%areoil-andgas-firedpowerplants,withonly70MWofrenewablecapacityattheShagayasolarcomplex.Kuwait'scapacityinstallationshavestagnatedsince2020.Atthesametime,demandincreasedby2%in2023duetostrongpopulationgrowth,risingdemandforwaterdesalinationandhighsummertemperatures.Thiswasslightlybelowthe2018-2023CAGRof2.6%.Kuwait'sexistingpowergenerationfleethasbeenunderaheavystrainsincethestartof2023,withproductionsettingmonthlyrecordsevenoutsidethepeaksummermonths.Kuwait’speakelectricityloadhitanewall-timehighof17.6GWinAugust2023,upalmost5%onthepreviousyear’shigh.TheseverityofthesituationhasledtoPAGE145IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026powershortages.Withnonewcapacitysettocomeonlinebeforesummer2025,theMinistryofElectricity,WaterandRenewableEnergylaunchedinMay2023anationalawarenesscampaigntosaveelectricityandwater(Weffircampaign).Inouroutlookto2026,weforecasttotalelectricitydemandtogrowatanaveragepaceof2.5%peryear.Electricitywillcontinuetobegeneratedmainlyfromoil(40%)andgas(60%).Overthelongerterm,Kuwait’sgovernmenthasreneweditslong-standingtargetfor15%ofitsgenerationcomingfromrenewablesby2030,correspondingtosome14GW.ThisobjectiveisexpectedtobemetbytheexpansionoftheShagayasolarproject,whichaimstoreach4.5GWby2027-2028,forwhichtheRequestforQualificationwasrecentlyissued.Atthesametime,theGulfCooperationCouncilInterconnectionAuthority’sledGulfElectricityInterconnectionExpansionProjectwouldenableKuwaittoincreasethecapacityofitselectricitynetworkby2.5GW.In2023,electricitydemandinIsraelgrewbyanestimated2%,aslowdowncomparedto4%thepreviousyear.Outto2026,weanticipateaverageannualgrowthof2.5%.Productionfromrenewablesrosesignificantlyin2023,upby43%year-on-year,increasingitsshareto14%oftheelectricitymix.Despitetherapidgrowth,capacityadditionswouldneedtoacceleratetomeetIsrael’sgoaltogenerate40%ofitselectricityfromrenewablesby2030.AccordingtotheroadmapreleasedinFebruary2022bytheMinistryofEnvironment,Israelwouldhavetoinstallbetween18GWand23GWofsolarprojectsalongwith5.5GWstorage(with33GWhenergycapacity)tomeetthetarget.Theroadmapalsorecommendsthecreationofaregulatoryframeworkformanagingdistributedrenewableenergyandstoragesystemsandforvirtualpowerplants(VPPs)tomanage100MWofrenewablesand50MWofstorage.PlansforrenewablesreceivedaboostwhentheMinistryofEnergyannouncedon10September2023thatongoinggridmodernisationplanswouldadd2GWofrenewablesfromwindandsolartothegrid,althoughnotimetablewasprovided.Weseerenewablegenerationrisingto23%ofthemixby2026,mostlycomingfromsolarPV.Gas-firedgenerationalsoincreasesbyaround6%peryear,whilecoaldeclinessharply,leadingtoannualemissionreductionsofaround10%outto2026.Qatar’selectricitydemandincreasedbyanestimated3%in2023,andweexpectasimilargrowthof3.1%forthe2024-2026period.PriortotheopeningofQatar'sfirstmajorsolarpowerplant,the2TWh/yearAlKharsaah,inOctober2022,allpowercapacitywasbasedonfossilfuels,mainlyfromgas.TheQatarNationalVision2030aimstogenerate20%ofelectricityfromrenewableenergysourcesby2030,withafocusonsolarPVtomeetthatgoal.TwonewsolarplantsintheMesaieedandRasLaffanindustrialcitiesareexpectedPAGE146IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026tobeoperationalbytheendof2024.Thiswilldoublethecountry’srenewableenergyoutputoncecompletedandbringrenewablesto5%ofthepowermixin2025-2026.InSeptember2023,QatarEnergy,theworld'slargestLiquefiedNaturalGas(LNG)producer,announcedthatitwasexpandingitstargetsforinstallingphotovoltaicpowercapacityfrom4GWto5GWby2035,toliquefynaturalgasusingrenewableelectricity.Thecompanyhasamajorexpansionprojectunderconstructionthatwillleadtoa64%increaseinQatar’sLNGproductionfrom2021to2030.Oman’selectricityconsumptionincreasedbyanestimated2.5%in2023,andweanticipateanannualgrowthrateofaround3%forthenextthreeyears.Omanhasonlyoneoperatingutility-scalesolarfacility,the500MWIbriIIsolarPVplant,whichcameonlinein2021,andone50MWwindfarm.Twoadditionalsolarphotovoltaicpowerplants,ManahIandII,withacombinedcapacityof1000MW,areduetostartoperationsin2025,whichwouldnearlytripletheexistingcapacityfromrenewables.Weexpectrenewablestoreachnearly8%ofthegenerationmixin2026,whilegas-firedelectricityfallsfrom93%currentlyto88%.Tosupportthedevelopmentofnewproductioncapacities,OmanisconnectingitsnorthandsouthstandalonegridswiththeRabtproject.AsignificantmilestonewasreachedinAugust2023withthecommissioningoftheUSD49millionSuwayhatgridstationbytheOmanElectricityTransmissionCompany(OETC).InSeptember2023,acompetitivetenderwaslaunchedfora132/33kVgridstationonMasirahIsland,whichwouldbeconnectedtothemainlandbyasubseacable,reducingtheisland’sdependencyondiesel-firedpowergeneration.Theenergycrisispromptedthegovernmenttoincreaseelectricitysubsidiesby15%in2022and2023.However,Oman’senergysubsidyreformsarestillongoing,withtheaimtograduallyraiseutilitytariffsuntilthetotaleliminationofsubsidiesby2025.PAGE147IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026AfricaInsufficientpowercapacityandinfrastructureissuescontinuetocurbgrowthElectricitydemandinAfricaincreasedby2%in2023,marginallyhigherthantheyearbefore.ThelacklustregrowthprimarilyreflectsasharpcontractionindemandinSouthAfrica,thecontinent’slargestelectricityconsumer,duetochronicpowercapacityconstraints.EgyptandAlgeria,theregion’ssecondandthirdlargestconsumers,areestimatedtohaveseengrowthof1.5%and5%,respectively.Combined,thesethreecountriesmakeup60%ofdemandinAfrica.OurforecastforAfricaanticipatesmuchfastergrowthforthe2024-2026period,withaverageannualelectricitydemandrisingbymorethan4%.ThehighergrowthratesalsoreflectareboundinSouthAfricanpowerdemandfollowingtherestartofshut-incapacity.WeexpectpercapitaelectricityconsumptioninAfricatorecovertoits2010-2015levelsbytheendof2026attheearliest.Inourforecast,two-thirdsofadditionaldemandgrowthinAfricaisexpectedtobemetbyexpandingrenewables,withnaturalgassupplyingmostoftherest.Emissionintensityofelectricitygenerationisexpectedtofallfrom520gCO2/kWhin2023to490gCO2/kWhin2026.Year-on-yearpercentchangeinelectricitydemand,Africa,2019-202615%10%5%0%-5%-10%202020222024202620202022202420262020202220242026202020222024202620202022202420262020202220242026AfricaSouthAfricaEgyptAlgeriaMoroccoNigeriaHistoricaldemandUpdatedforecastPreviousforecast(July2023)IEA.CCBY4.0.PAGE148IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026SouthAfricaDemandsupressedbyever-worseningpowergenerationshortagesin2023,andtheoutlookremainsprecariousElectricityconsumptioninSouthAfricadeclinedsharplyin2023,droppingmorethan4%y-o-yduetoincreasedloadshedding.Thisextendsthedownwardtrendindemandobservedsince2018,whenthecurrentpowercrisisstarted–withtheexceptionof2021whendemandreboundedfromtheCovid-19shock.Thepowersectorcontinuestobeplaguedbyloadsheddingduetoashortageofpowercapacityastheavailabilityofitsageingcoalfleethasdegradedfurther.Atthesametime,much-needednewpowercapacityhasstruggledtocomeonlinetoreplacethisfleet.Mostnotably,threeunitsofthenewlycommissioned4800MWKusilepowerstationsufferedcriticaldamagewhenhalfofitsunitsweretakenoutofservicewhenachimneycollapsedtowardstheendof2022.ThishasbeenfurtherexacerbatedbyongoingmaintenanceattheKoebergnuclearplant,whereoneofthetwounitswasrestartedinNovember2023afteralmostayearoutofservice,beforetheotherunitwastakenoutofoperationforsimilarmaintenanceamonthlater.Meanwhile,thetimelyprocurementofnewpowercapacitythroughauctionssincetheCovid-19pandemichasprovenlargelyunsuccessfulduetoanumberofissues.Escalatingcostsasaresultofinflationhavepreventedsuccessfulprojectsfromreachingfinancialclose.LoadsheddinginSouthAfrica,2017-2023GWh18360days163201420182019202020212022202328012240102001608120680440200IEA.CCBY4.0.2017LoadsheddingDaysofloadshedding(right-axis)Source:Eskom(2023),EskomDataPortal.Asaresultofthesechallenges,2023willbetheworstyeartodateforloadshedding,withthetotalvolumeofloadsheddingupuntiltheendofSeptemberalreadyexceedingthetotalinthepreviouseightyearscombined.PAGE149IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Thelatestrenewableauctionhasfarednobetter.DuringevaluationofthebidsitemergedthatthegridhostingcapacityintheEasternandWesternCape(whereallwindbidshadbeenreceived)hadbeenreducedtozeroandsoonly860MWofsolarcapacity(outof5200MWrenewablestendered)wasprocured.Thiswillfurtherhamperthesuccessofthelatestplansforprocurement.ThegovernmentofSouthAfricaannouncedseveralnewauctionsinDecember2023forasuiteoftechnologies,including5000MWofwindandsolarPVcapacity,2000MWofgas-firedprojectsand615MWofbatterystoragecapacity.Thelattercomesafterthesuccessfulprocurementofaround500MWofbatterystoragecapacitylastyear,thefirstauctionofitskindinSouthAfrica.Inaddition,thegovernmentannouncedplanstoprocure2500MWofnuclearcapacity.Inanattempttosolvetheongoingpowercrisis,alsoapprovedanupdatedintegratedresourceplan,althoughthisisyettobereleasedforpubliccomment.Despitethesecriticalissuesaroundpowercapacity,demandisexpectedtogrowby5%.onaverageovertheforecastperiod.Thisisasharpreversalofthe-2%averageforthe2018-2023timeframe.ThisisbasedonthereturntoserviceofnucleargenerationanddamagedunitsattheKusilecoal-powerplant.Additionally,weexpectrenewablecapacitytocontinuetocomeonlinefrompreviousauctionsthroughdirectprocurementviaPPAsintheprivatesector.Thiswillresultintheemissionintensityofthesystemdecreasingbyaround2%y-o-yonaverageovertheforecastperiod,reachingjustunder800gCO2/kWhin2026.Despitethelackofcapacitydeliveredbytheprocurementprogrammes,strongpolicyisopeningupnewpossibilitiesfortheprivatesectortorespondoutsidethetraditionalprocurementchannels.Followingtheeasingoflicensingrequirementsforprivategenerators,therehasbeenasignificantincreaseinthenumberofapplicationsforlicensesascommercialandindustrialconsumershavestartedtoinvestinrenewablegenerationfortheirownconsumption.Thistrendisclearfrompubliclyavailabledataofprivateprojectsregisteredwiththeregulator.ItisequallysupportedbyanalysisfromEskom,whichestimatesthataround4.4GW(andanincreaseof3.5GWoverthecalendaryearfromJune2022toJuly2023)ofdistributedsolarPVwasconnectedtothesystem.PAGE150IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026RegisteredprivategenerationfacilitiesinSouthAfrica,2017-20234500MW5004000numberofapplications37535002503000125250002000202315001000500020182019202020212022CogenerationGasHybridHydroSolarWindApplications(right-axis)Source:NationalEnergyRegulatorofSouthAfrica(2023),RegisteredGenerationFacilities(06/11/2023)IEA.CCBY4.0.Theincreaseinprivategenerationprojectsmaysoonbeequallyaidedbyanewregulationthatallowsforthewheelingofpowerfromprivateprojectstomultiplecustomersviapowerpurchaseagreements(PPAs).ThiswillbefurtherenabledthroughthedevelopmentofanewdigitalplatformbyEskomthatcancircumventstructuralconstraintsaroundbillingandallowforthewheelingofpowerfromprivategeneratorstodirectofftakersatthedistributionlevel.Theso-calledVirtualWheelingPlatformhasrecentlypassedfromconcepttoimplementationasVodacom,thelargesttelecommunicationsproviderinSouthAfrica,signedanagreementwithEskomwherebytheywillbeabletopurchasepowerfromrenewableenergyprojectsdirectlytopowertheiroperationsthroughtheplatform.Upuntilnow,privateprojectsforwheelinghavebeenrelativelyslowtoreachfinancialclosure,andsothespeedatwhichtheycancontributetothegenerationmixmaybequitelimited.PAGE151IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026Year-on-yearchangeinelectricitygenerationinSouthAfrica,Egypt,Algeria,andTWhMorocco,2021–20262520151050-5-10-15-20202120222023202420252026202120222023202420252026202120222023202420252026202120222023202420252026SouthAfricaNuclearEgyptAlgeriaMoroccoCoalGasOthernon-renewablesRenewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.EgyptGovernmentsupportenablesgrowthinrenewableenergyelectricitygenerationElectricitydemandinEgyptrosebyanestimated1.5%in2023.Gas-firedgenerationisestimatedtohaveincreasedbyaround2%.Adeclineintheshareofgenerationfromoilproductsversusthepreviousyearinfavourofgasresultedina1.2%annualdecreaseintheemissionsintensityoftheenergymix.Since2018,theEgyptiangovernmenthastakensignificantstepstosupporttheelectricitysector,attractforeigninvestmentsandexpandtheinfrastructureforelectricitytransmissionanddistribution.Asaresult,thesectorhasbecomemorecompetitive,withnumerousinternationalcompaniescompetingformarketshareandsubstantiallyraisedinvestmentinthecountry.Weanticipatesustainedgrowthinelectricitydemandofanaverage2%peryearuntil2026,supportedbyhigherdemandforairconditioning.Inaddition,EgypthascommittedtodrasticallyreduceitsenergysubsidiesaspartofafinancialsupportprogrammewiththeIMF.ElectricitypriceswillremainunchangedforconsumersuntilJanuary2024,howeverafterthis,risingpricescouldputdownwardpressureondemandgrowth.PAGE152IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026GrowthinrenewablecapacitywillbesupportedbytheEnergyPillarofEgypt’sCountryPlatformfortheNexusofWater,FoodandEnergy(NWFE)Program,launchedbythegovernmentatCOP27inNovember2022.NWFEaimstodeployanadditional10GWofrenewableenergycapacity(solarandwind)between2023and2028.Italsoincludesthedecommissioningof5GWofinefficientfossilfuelcapacityfrom2023onward.Continuedgrowthofrenewableswillraiseitsshareinthegenerationmixfromaround11%todayto13%in2026.Weforecastpowergenerationemissionstoremainrelativelystablefor2024-2026,asexpandingrenewablesrestrainthegrowthinnaturalgas-firedpower.Egypt'sVision2030plan,whichwaslaunchedin2022,targetsa10%reductioninGHGemissionsintheenergysector,includingoilandgas,by2030comparedwith2016levels.Launchedin2023,theRedSeaWindEnergyproject,supportedbytheEuropeanBankforReconstructionandDevelopment(EBRD),willcontributetoEgypt’sgreentransitionwiththedevelopmentofa500MWonshorewindfarmintheGulfofSuezregion.AlgeriaThecountry’sbountifulnaturalgasreservesprovidealmostallofpowergenerationbutrenewablesmakinginroadsElectricitydemandinAlgeriarosebyabout5%in2023,largelyunchangedfromtheyearbefore.Overthe2024-2026forecastperiod,weanticipatetotalelectricitydemandtoexpandatanaverageannualrateof5.2%,mainlydrivenbyeconomicgrowth,alongwithadditionalconsumptioncomingfromwaterdesalinationandelectricvehicles.Althoughtheelectrificationofthetransportsectorremainslimited,thiswillincreaseovertime,withthegovernmentaimingtoreach1000electricvehiclesontheroadand1000chargingstationsby2024.Algeria'sinstalledpowerpowercapacityiscurrentlyaround25GW.Thepowermixisheavilydominatedbynaturalgas,representing99%ofgenerationin2023.Thegovernmentistakingstepstoacceleratethedeploymentofrenewableenergysourcestomeetitstargetof22GWofrenewablesby2030.FollowingatenderlaunchedinDecember2021for1GWsolarPVthatdidnotresultinanycontracts,inAugust2023thegovernmentissuedanewtenderaimingforatotalsolarPVcapacityof2000MW.Ofover100bids,73frombothinternationalandlocalapplicantswereacceptedasmeetingtherequirements.Twoadditionaltenderstookplaceinthefollowingmonths,thefirstfor1GW–reopeningtheoriginaltenderfrom2021–andasecondfor3GW.PAGE153IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026However,bytheendof2023nowinnershadbeenannouncednorprivatecontractssignedforanyofthetenders.Intheabsenceofalate-stagedevelopmentprojectpipeline,theforecastisconservativeregardingtheamountofutility-scaleprojectsthatwillbecommissionedby2026andthereforeweexpectgaswillcontinuetoaccountforthemajorityofgeneration(99%).Thiswouldresultinpowersectoremissionsgrowthofaround4.5%CAGRduring2024-2026amidincreasingpowerdemand.Algeria'sinterestinrenewableenergyisalsolinkedtothecountry'swaterdesalinationprogramme.InMarch2023,thegovernmentsignedoffonthecreationofanindependentnationalagencyforwaterdesalinationwithaviewtoensuringwatersecurityandreaching50%ofdrinkingwaterfromdesalinationby2030.Sixmonthslater,theAlgerianEnergyCompany(AEC)announcedthatthenew80000m3plantatCorsohadhitfullcapacity.Allseawaterdesalinationplantscombinedareexpectedtohaveacapacityof3.6millionm3/dby2024.Theadditionalelectricityusecouldbeintherangeof1-4%ofAlgeria’scurrentelectricitydemand,dependingonthetechnologiesemployed.Todevelopgridinfrastructure,thegovernmenthasannouncedaninterconnectionprojectlinkingthesoutherngridtothenationalgrid.Theconstructionofthis700kmdouble400kVhighvoltagetransmissionlinewouldhelpboosttheelectricitysupplytothecountry'ssouthernprovinces.MoroccoDiversifyingelectricitygenerationmakingsignificantprogress,withafocusonrenewablesandflexibletechnologiesElectricityconsumptioninMoroccorosebyaround2%in2023andisexpectedtogrowatanaverageannualrateof3.1%overtherestoftheforecastperiod.Moroccohasbeenstrivingtodiversifyitspowersupplyandincreasetheshareofrenewablegeneration,withatargetofreachingatleast52%by2030.Aseriesofsuccessfultendershaveresultedinagrowingshareofwindandsolar(includingPVandCSP)generation,aswellasflexibletechnologiessuchasbatteriesandpumpedstoragehydrotosupporttheintegrationofthesenewresources.Thermalgenerationaccountedforalmost80%ofgenerationin2023,consistingofprimarilycoal-firedelectricity(73%),whichhassteadilyincreasedoverthelastfiveyearsattheexpenseofgas-firedgeneration.ThiscomesaftergasimportsfromAlgeriaceasedinNovember2021followingthebreakdownofdiplomatictiesbetweenthetwocountries.Asaresult,increasingdemandinMoroccooverthe2024-2026forecastperiodisexpectedtobemetbygrowthinwindandsolarPVproduction,alsoreducingtheshareofthermalgenerationintheenergymix.InJuly2023,a300MWwindplantPAGE154IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026wascommissioned,whiletheMoroccanMinisterofEnergyTransitionandSustainableDevelopment(METSD),recentlyannounceditsInvestmentPlanfor2023–2027,whichenvisagesthedeploymentof7GWofnewrenewablecapacity.Additionally,inAugust2023,followingthesuccessfulcallfortenderfortheconstructionofa400MWsolarPVplantwithtwohoursofbatterystorage,anewcallfortenderwasissuedforanadditional400MWsolarPVplantwithonehourofbatterystorage.Thishighlightsnotonlytheaccelerationtowardsthepowercapacitytargetbutalsoinflexibilitytosupporttheintegrationofthesenewresources.ThisisequallydemonstratedbytherecentMoUconcludedbetweenMoroccoandChina'stelecommunicationscompanyHuawei,withtheaimofharnessinginnovativeelectricitystoragetechnologiesforthesystemintegrationofrenewablegeneration.MoroccoalsoadoptedlegislationinOctober2023that,whenimplementedintoitsregulatoryframework,willbothpermitandencouragethebroaderdeploymentofdecentralisedgeneration.Whilethefocusofgrowthonthesupply-sidehasbeeninrenewables,MoroccoalsosignedanLNGsupplyagreementwithShellfor0.5bcmofLNGuntil2035,whichtheMETSDhasstatedwouldbeinlinewithitsdecarbonisationgoals.ThiswouldlooktoreplacethelossofgassupplyfromAlgeria.NigeriaDeteriorationofpowerinfrastructureincreaseddependencyonbackupgeneratorsfor40%ofelectricityconsumptionIn2022,73%ofNigeria’spopulationhadaccesstoelectricity,anincreaseofmorethan70millionpeopleduringthepastdecade.Althoughthecountryhasatotalinstalledcapacityofabout13GW,averageavailablecapacityremainedaround4.5GWin2023duetoacombinationoffactorssuchasdeterioratingunits,poormaintenanceandliquidityconstraints.Unreliablepowersupplyduetolimitedgridinfrastructure,underinvestmentandineffectiveregulatoryframeworkshasresultedinanestimated40%ofalltheelectricityconsumedinthecountrybeingproducedfrombackupgenerators.Tomeetincreasingdemand,theperformanceoftheNigerianElectricitySupplyIndustry(NESI)isbeingreviewedandelectricitysupplyremainsapriorityofthefederalgovernment.The240MWAfamThreeFastPowernaturalgas-firedplantaswellasthegas-fired50MWMaiduguriEmergencyThermalPowerPlantwerecommissionedin2023.Similarly,the700MWZungeruhydropowerplantwascommissionedinQ42023,boostingtherenewablegenerationofthecountry.Thecountry’slargestthermalpowerplantwasannounced,a1900MWexpansionofEgbinPowerPlc(commercialoperationby2025).The1350MWgas-firedPAGE155IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026GwagwaladaIndependentPowerPlantiscurrentlyunderconstructioninthreephases,thefirstofwhichistobecompletedin2024.Onceoperational,itisexpectedtoprovidearound11%ofthecountry’selectricity.Gas-firedgenerationinthecountryisestimatedtohaveincreasedby6%in2023withnewplantsbecomingoperational.Weestimatethatelectricitydemandroseby9%in2023asavailablegenerationincreased.From2024-2026,electricitydemandisforecasttorisebyanannualaverageofaround7%,asnewgas-firedcapacitiesenteroperationaccordingtoplan,supportinganaverage6%growthrateingas-firedgenerationin2024-2026.Nevertheless,delaysincommissioningoftheplantsandcontinuedproblemswithinfrastructurearesourcesofuncertaintyinourforecast.Year-on-yearchangeinelectricitygenerationinNigeria,KenyaandSenegal,2021-2026TWh4.03.53.02.52.01.51.00.50.0-0.5-1.0202120222023202420252026202120222023202420252026202120222023202420252026NigeriaNuclearKenyaRenewablesSenegalCoalGasOthernon-renewablesNetchangeIEA.CCBY4.0.Notes:Othernon-renewablesincludesoil,wasteandothernon-renewableenergysources.Thefiguresfor2024-2026areforecastvalues.Naturalgasaccountedforaround75%ofelectricitygeneratedonthemaingridin2023.NaturalgasisexpectedtocontinuetoplayanimportantroleinenergysupplyandgridstabilisationforNigeria’spowersectoruntil2030,anddeclineby2050,accordingtothecountry’sEnergyTransitionPlan(ETP).Renewablesarealsoforecasttoincreaseoverthe2024-2026period,ataCAGRofaround8%,andapositivespilloverintermsofGHGemissionreduction(-1.8%).Hydropoweraccountsformostoftherenewablesgenerationduring2024-2026,largelyduetothecompletionoftheZungeruproject,withanestimatedgenerationof2.6TWhperyear.Hydropowerisforecasttorisefurtherinthefuture,thankstothecompletionofthe1650MWMakurdiHydropowerPlant.PAGE156IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026SolarPVisexpectedtogrowrapidly,withanaveragerateofabove50%peryearoverthenextthreeyears,althoughremainingataround1%ofgenerationin2025.Theoff-gridspace(includingmini-grids,solarhomesystemsandsolarlights)representsasignificantportionofsolarPVelectricitysupplyinthecountry,whichisestimatedtohavereached93MWofinstalledcapacityin2021,andcoulddrivemuchofthegrowthinthecomingyears.InMay2023,PresidentBolaTinubuannouncedtheendofNigeria’sfossilfuelsubsidies.Thisdecisioncouldjump-starttheuseofsolar-basedsolutionstoreplaceexpensivedieselgenerators.TheNigerianRuralElectrificationAgency(REA)isresponsibleforpromotingandco-ordinatingruralelectrificationprogrammesandhasimplementedtheEnergizingEconomiesInitiative,whichaimstosupporttherapiddeploymentofoff-gridelectricitysolutionsineconomicclustersthroughprivatesectordevelopers.Stronggrowthofoff-gridsolutionsinNigeriaisthedriverofabroadergrowthtrendinWestAfrica.InJune2023,NigeriaadoptedanewElectricityAct2023,whichaimstoprovideacomprehensivelegalandinstitutionalframeworkforaprivatisedcontractandrule-basedcompetitiveelectricitymarket,withaviewtoattractingprivatesectorinvestmentsacrossthepowersector.Whiletheactstrengthenstheroleofregulatorybodies,asitintroducesconsumerprotectionmeasuresandprovidesforatransparenttariff-settingprocess,italsoopensupthepossibilityofmultiplelicensingregimesbyenablingregulationatstatelevel.Althoughregulationatthefederallevelremainstherulewherenostateregulationisspecified,carefulco-ordinationandstreamliningofregulatoryapproachesacrossstateswouldberequiredtominimisetheuncertaintyofdifferentregimes.OtherAfricaInKenya,over700000newcustomerswereconnectedtothenationalgridin2022and75%ofthepopulationhadaccesstoelectricity(bothnationalgridandoff-gridsolutions),asubstantialgrowthcomparedto47%in2015.Electricitydemandisestimatedtohaveincreasedbyaround4.5%in2023,andweexpectannualdemandgrowthof5.7%onaveragefrom2024to2026.Kenyahasatotalinstalledcapacityofabout3.3GWandgeneratedabout13TWh,ofwhichmorethan90%wasfromrenewablesources.TheKenyangovernmenthasanambitionofreachinga100%shareofrenewablesinelectricitygenerationby2030.Weestimatethatin2023morethan44%ofgenerationinKenyacamefromgeothermal,withtheremainderofrenewablescomingmainlyfromhydropowerandwind.Kenya’sLakeTurkanaWindFarmisAfrica’slargest,with365turbinesat850kWhcapacityeach.Weanticipatethecountry’srenewablegenerationtogrowbyaround7%peryearin2024-2026.ThelargestgrowthisanticipatedinPVandwind,with25%and13%annualaveragegrowth,respectively.ThePAGE157IEA.CCBY4.0.Electricity2024RegionalfocusAnalysisandforecastto2026governmentisconsideringtheintroductionofgrid-scalebatteryenergystoragesystemstosupportincreaseduptakeofrenewableenergyanddisplacethermalgenerationatpeak.Kenyaalsoaimstodiversifyitsgenerationsourcestoincludenuclearpowerinthefutureandhaveitsfirstnuclearpowerplantupandrunningby2038.TheKenyangridisinterconnectedwiththeEthiopiangridthrougha1058kmlineenergisedin2023.TheKenyaPowerandLightingCompany(KPLC)startedimportingelectricityatlowertariffslastyearundera27-yearpower-sharingagreementsignedbythetwogovernments.FurtherregionalinterconnectionswillbeachievedthroughaninterconnectorwithTanzania,whichisunderconstruction,andasecondlinewithUganda,whichisunderimplementation.Theseprojectswilleventuallyfacilitatethecreationofaregionalpowermarket.AccordingtoIEAanalysis,SenegaliswellontracktoachieveSustainableDevelopmentGoal7(SDG7)ofuniversalaccesstoelectricityby2030.Withsomeadditionaleffortsandbydeployingoff-gridsolutions,itcanalsoreachits2025target.In2022,75%ofthepopulationhadaccesstoelectricity,representinganincreaseof17percentagepointsoverthepastdecade.Despitethisrapidprogress,disparitiesremainbetweenurbanandruralareas,whereaccessratesare97%and55%,respectively.Adequacyandaffordabilityofelectricitysupplytomeetgrowingdemandisakeyconcernforthecountry.Electricitydemandrosebyanestimated8%in2023andisforecasttogrowataslightlystrongerpaceof9.%in2024-2026.Supplyismostlydominatedbyfossilfuels,particularlyimportedheavyfueloil(HFO).In2021,totalinstalledpowercapacityamountedto1.62GW,withfossilfuelsaccountingfor72%(1.16GW).In2022,renewablesaccountedforaround25%oftotalelectricitygenerationandfor30%ofinstalledcapacity,inlinewithgovernmenttargets.Hopingtoleveragedomesticnaturalgasresourcesunderdevelopment,Senegalispursuingagas-to-powerstrategytoswitchfromimportedHFOtonaturalgastoreducecostsandemissions,aswellastoincreasesecurityofsupply.A300MWgas-firedcombined-cyclepowerplantatCapdeBichesisexpectedtocomeonlinein2024.Anewelectricitycode(Lawno.2021-31)approvedin2021ispavingthewayfortheunbundlingofthepowersector.Underthisnewframework,thegovernmentofSenegalisdevelopinganIntegratedLow-CostPlan(PIMC)toenhanceplanninginthesector.In2023,SenegalenteredaJustEnergyTransitionPartnership(JETP)withFrance,Germany,theEuropeanUnion,theUnitedKingdomandCanada.UndertheJETP,theinternationalpartnersareundertakingtomobiliseuptoEUR2.5billiontosupportthecountryinacceleratingcleanenergydeploymentforsustainabledevelopment.Senegalincreaseditsrenewableenergytargetsto40%ofinstalledcapacityby2030.PAGE158IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026AnnexesSummarytablesRegionalbreakdownofelectricitydemand,2021-2026TWh2021202220232026GrowthGrowthCAAGR2024-raterate20262021-2022-202220234.4%1.9%1.7%Africa7537657808871.6%1.5%-0.4%4.6%Americas62196382635366772.6%4.9%41704277420844042.6%-1.6%1.3%ofwhich131931373314394164594.1%2.4%UnitedStates4.8%2.3%2.9%AsiaPacific6.4%3.4%ofwhichChina830786159164105733.7%1.5%Eurasia13021316133513861.1%-2.4%Europe3813367435863845-3.6%-3.2%2736265125682749-3.1%ofwhich11721210123513473.3%2.1%EuropeanUnion2.2%MiddleEastWorld264532708027682306012.4%Notes:Datafor2023arepreliminary;2024-2026areforecasts.Differencesintotalsareduetorounding.CAAGR=Compoundedaverageannualgrowthrate.FortheCAAGR2024-2026reported,endof2023dataistakenasbaseyearforthecalculation.FortheentireperiodEuropeanUniondataisforthe27memberstates.PAGE159IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026Breakdownofglobalelectricitysupplyandemissions,2021-2026TWh2021202220232026GrowthGrowthCAAGR2023-raterate20262021-2022-202220232.6%-1.7%Nuclear2809266827412959-5.0%2.7%0.7%-3.4%Coal102841044210613100881.5%1.6%10.7%3.2%Gas65566609663967850.8%0.5%8528577827050.6%-8.8%Othernon-792585498959121587.9%4.8%renewablesTotalrenewablesTotalGeneration284262912429734326942.5%2.1%MtCO22021202220232026GrowthGrowthCAAGR2023-Totalemissions13263134481357513111raterate20262021-2022-20222023-1.2%1.4%0.9%BreakdownofAsiaPacificelectricitysupplyandemissions,2021-2026TWh2021202220232026GrowthGrowthCAAGR2023-raterate20262021-2022-202220235.0%-0.5%Nuclear7277467929162.6%6.1%2.8%-6.7%Coal80008196867585422.5%5.8%13.9%4.3%Gas1517148114711600-2.4%-0.7%203198155126-2.2%-21.9%Othernon-355439464155613611.0%5.3%renewablesTotalrenewablesTotalGeneration140011456815248173214.0%4.7%MtCO22021202220232026GrowthGrowthCAAGR2023-Totalemissions8420858990118929raterate20262021-2022-20222023-0.3%2.0%4.9%PAGE160IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026BreakdownofAmericaselectricitysupplyandemissions,2021-2026TWh2021202220232026GrowthGrowthCAAGR2023-raterate20262021-2022-202220230.0%-9.9%Nuclear942924924924-1.8%0.0%0.0%-3.6%Coal11101025844618-7.7%-17.7%7.2%1.7%Gas22042291242124223.9%5.7%206205200179-0.4%-2.8%Othernon-226424902521310110.0%1.2%renewablesTotalrenewablesTotalGeneration67266934690972443.1%-0.4%MtCO22021202220232026GrowthGrowthCAAGR2023-Totalemissions2107205719381709raterate20262021-2022-20222023-4.1%-2.4%-5.8%BreakdownofEuropeelectricitysupplyandemissions,2021-2026TWh2021202220232026GrowthGrowthCAAGR2023-raterate20262021-2022-202220232.5%-10.4%Nuclear889750769827-15.6%2.5%-6.3%-9.1%Coal6466865584026.2%-18.6%9.1%2.4%Gas843796665547-5.6%-16.4%8695896710.1%-6.3%Othernon-15891588172922470.0%8.9%renewablesTotalrenewablesTotalGeneration4053391538114090-3.4%-2.7%MtCO22021202220232026GrowthGrowthCAAGR2023-856649raterate2026Totalemissions100010332021-2022-20222023-8.8%3.3%-17.1%PAGE161IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026BreakdownofEurasiaelectricitysupplyandemissions,2021-2026TWh2021202220232026GrowthGrowthCAAGR2023-raterate20262021-2022-202220231.9%-0.4%Nuclear225211208220-6.3%-1.4%1.2%5.3%Coal2612792892856.8%3.6%1.6%1.1%Gas6666786877121.8%1.3%rOentheewranbolne-s18121214-33.6%-0.7%Totalrenewables2842892933081.8%1.4%TotalGeneration14541469148915391.0%1.4%MtCO22021202220232026GrowthGrowthCAAGR2023-565578589raterate2026Totalemissions5482021-2022-202220230.6%3.3%2.2%BreakdownofMiddleEastelectricitysupplyandemissions,2021-2026TWh2021202220232026GrowthGrowthCAAGR2023-raterate20262021-2022-2022202313.6%-38.3%Nuclear1326395795.3%51.6%2.4%-0.7%Coal2118174-14.6%-4.2%18.2%2.6%Gas956985100410783.0%2.0%rOentheewranbolne-s284278261256-1.8%-6.1%Totalrenewables4349599814.4%21.1%TotalGeneration13161355138114933.0%1.9%MtCO22021202220232026GrowthGrowthCAAGR2023-725721741raterate2026Totalemissions7162021-2022-202220230.9%1.2%-0.5%PAGE162IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026BreakdownofAfricaelectricitysupplyandemissions,2021-2026TWh2021202220232026GrowthGrowthCAAGR2023-raterate20262021-2022-2022202315.2%1.2%Nuclear1210913-20.7%-11.5%2.8%-1.2%Coal246238229238-3.0%-4.0%10.0%4.0%Gas3713793914252.2%3.3%rOentheewranbolens-5669666322.7%-4.4%Totalrenewables191187201268-2.0%7.6%TotalGeneration87688389610070.8%1.5%MtCO22021202220232026GrowthGrowthCAAGR2023-479471493raterate2026Totalemissions4732021-2022-202220231.5%1.3%-1.6%PAGE163IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026RegionalandcountrygroupingsAfrica–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,6Czechia,Denmark,Estonia,Finland,France,Germany,Gibraltar,Greece,Hungary,Iceland,Ireland,Italy,Kosovo7Latvia,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,6Czechia,Denmark,Estonia,Finland,France,Germany,Greece,Hungary,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,Netherlands,Poland,Portugal,Romania,SlovakRepublic,Slovenia,SpainandSweden.PAGE164IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026MiddleEast–Bahrain,IslamicRepublicofIran,Iraq,Israel8,Jordan,Kuwait,Lebanon,Oman,Qatar,SaudiArabia,SyrianArabRepublic,UnitedArabEmiratesandYemen.Nordics–Denmark,Finland,Norway,Sweden.NorthAfrica–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.6NotebytheRepublicofTürkiyeTheinformationinthisdocumentwithreferenceto“Cyprus”relatestothesouthernpartoftheIsland.ThereisnosingleauthorityrepresentingbothTurkishandGreekCypriotpeopleontheIsland.TürkiyerecognisestheTurkishRepublicofNorthernCyprus(TRNC).UntilalastingandequitablesolutionisfoundwithinthecontextoftheUnitedNations,Türkiyeshallpreserveitspositionconcerningthe“Cyprusissue”.NotebyalltheEuropeanUnionMemberStatesoftheOECDandtheEuropeanUnionTheRepublicofCyprusisrecognisedbyallmembersoftheUnitedNationswiththeexceptionofTürkiye.TheinformationinthisdocumentrelatestotheareaundertheeffectivecontroloftheGovernmentoftheRepublicofCyprus.7ThedesignationiswithoutprejudicetopositionsonstatusandisinlinewiththeUnitedNationsSecurityCouncilResolution1244/99andtheAdvisoryOpinionoftheInternationalCourtofJusticeonKosovo’sdeclarationofIndependence.8ThestatisticaldataforIsraelaresuppliedbyandundertheresponsibilityoftherelevantIsraeliauthorities.TheuseofsuchdatabytheOECDand/ortheIEAiswithoutprejudicetothestatusoftheGolanHeights,EastJerusalemandIsraelisettlementsintheWestBankunderthetermsofinternationallaw.PAGE165IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026AbbreviationsandacronymsACEREuropeanUnionAgencyfortheCooperationofEnergyRegulatorsAEMOAustralianEnergyMarketOperatorAIartificialintelligenceBESSbatteryenergystoragesystemBILBipartisanInfrastructureLawBMWKFederalMinistryforEconomicAffairsandClimateActionBNetzABundesnetzagentur-GermanFederalNetworkAgencyCAISOCaliforniaEnergyMarketOperatorCBAMCarbonBorderAdjustmentMechanismCCRGcompoundaveragegrowthrateCERCCentralElectricityRegulatorCommissionCFDscontractsfordifferenceCO2carbondioxideCSPconcentratedsolarpowerDREdistributedrenewableenergyDSOsdistributionsystemoperatorsERCOTElectricReliabilityCouncilofTexasEU-ETSEUEmissionTradingSystemFERCFederalEnergyRegulatoryCommissionFFRfastfrequencyresponseGDPgrossdomesticproductGECGreenElectricityCertificatesHFOheavyfueloilHP-DAMHigh-PriceDay-AheadMarketHVDChigh-voltagedirectcurrentIAEAInternationalAtomicEnergyAgencyICTInformationandCommunicationsTechnologyIMFInternationalMonetaryFundIPPindependentpowerproducersIRAInflationReductionActJETPJustEnergyTransitionPartnersMETDSMoroccanMinisterofEnergyTransitionandSustainableDevelopmentNERCNorthAmericanElectricityReliabilityCorporationNETRNationalEnergyTransitionRoadmapNISNetworkandInformationDirectiveNPKNitrogen,PhosphorusandPotassiumNZENetZeroEmissionsby2050ScenarioPDPPowerDevelopmentPlanPPApowerpurchaseagreementPPPpurchasingpowerparitySHSSolarhomesystemsSIRSynchronousInertiaResponsePAGE166IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026SMPSystemMarginalPriceSMRsmallmodularreactorsSTEPSStatedPoliciesScenarioTSOstransmissionsystemoperatorsVGFViabilityGAPFundingVREvariablerenewableenergyPAGE167IEA.CCBY4.0.Electricity2024AnnexesAnalysisandforecastto2026Unitsofmeasurebblbarrelbbl/dbarrelsperdaybcmbillioncubicmetresbcm/yrbillioncubicmetresperyearcm/scentimetrespersecondgCO2grammeofcarbondioxidegCO2/KWhgrammesofcarbondioxideperkilowatthourGJgigajouleGt/yrgigatonnesperyearGWgigawattktkilotonnesMWmegawattMWhmegawatt-hourMtmilliontonnesMtCO2milliontonnesofcarbondioxideMtCO2/yrmilliontonnesofcarbondioxideperyearGWgigawattGWhgigawatthourTWhterawatt-hourPAGE168IEA.CCBY4.0.InternationalEnergyAgency(IEA)ThisworkreflectstheviewsoftheIEASecretariatbutdoesnotnecessarilyreflectthoseoftheIEA’sindividualmembercountriesorofanyparticularfunderorcollaborator.Theworkdoesnotconstituteprofessionaladviceonanyspecificissueorsituation.TheIEAmakesnorepresentationorwarranty,expressorimplied,inrespectofthework’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thework.SubjecttotheIEA’sNoticeforCC-licencedContent,thisworkislicencedunderaCreativeCommonsAttribution4.0InternationalLicence.Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Unlessotherwiseindicated,allmaterialpresentedinfiguresandtablesisderivedfromIEAdataandanalysis.IEAPublicationsInternationalEnergyAgencyWebsite:www.iea.orgContactinformation:www.iea.org/contactTypesetinFrancebyIEA-January2024Coverdesign:IEAPhotocredits:©Shutterstock

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