The demand for electricity in 2021 reached record levels, pushing up greenhouse gas emissions and putting strain on overwhelmed power grids.
According to the International Energy Agency (IEA), there will be more volatility and higher emissions in the next few years. Many governments want to transition from fossil-fuel-generated power to renewable-backed energy like electricity.
Global electricity demand rose 6% in 2021, helping to increase power-generated CO2 emissions by 7% to an all-time high level. Coal-fired electricity generation grew 9%, reaching an all-time peak, while natural gas-fired electricity generation rose by 2%. That made coal-fired power generation the leading cause of the emissions increase in 2021.
Coal in Demand and in Short Supply Across the World
Electricity demand grew by 10% in China and 7% in India. The United States and Europe saw levels climb to the pre-pandemic levels of 2019.
The steep rise in electricity use resulted in price increases for natural gas and coal to a lesser extent.
In the U.S. in 2021, coal’s relatively stable price meant it offered competitive electricity generation prices, augmenting its role in the energy mix. Coal delivered a more competitive price than natural gas, which doubled in the second half of 2021 compared to the previous year’s same period.
Low pricing contributed to an estimated 19% growth in cheaper coal-fired generation in the U.S., accompanied by a 3% drop in more expensive natural-gas-generated electricity.
However, coal’s success led to shortages across China and India. China suffered power cuts due to floods disrupting local coal supplies. Chinese industry, which consumes 60% of the country’s electricity, has led to a surge in businesses buying diesel generators in anticipation of further supply issues.
Coal provided 64% of China’s electricity production in 2021, however, that number is expected to fall to 59% by 2024. The country mined record amounts of coal last year, just over 4 billion tons, to maintain its position as the world’s largest coal producer and consumer.
Coal Flatlines in the Medium Term
The IEA estimates that fossil-fuel-generated electricity will grow around 0.2% annually until 2024. Its overall contribution to global electricity generation may fall from 62% in 2021 to 58% in 2024. Coal will provide 34% of global electricity generation by 2024, down 2% from 2021’s 36% share. This decrease is due to the addition of renewable energy sources worldwide.
New Renewable Capacity Brings Cleaner Electricity
Green shoots of optimism include a 6% increase in renewable electricity generation last year. The extra demand for electricity and fossil fuel’s flatlining role means the IEA expects renewables to become more significant players in the market. The report states that renewable energy additions will meet 90% of electricity’s forecasted 2.7% annual global growth.
Renewables will provide an extra 8% of capacity every year until 2024, assuming average weather patterns. That growth would give renewables a 32% share of the global electricity supply, up from 28% in 2021.
This underlying shift in the global electricity supply mix is anticipated to result in a 2% annual fall in CO2 emissions every year until 2024, from 2021’s record level.
Higher Emissions Bring More Than Global Warming
Fossil fuels’ contribution to global warming and extreme weather events has a secondary effect, too. Power grid infrastructure is increasingly susceptible to damage during adverse weather that delivers high winds, flooding, torrential rain, and structural damage. Droughts bring power surges as people turn on air conditioning and fans, which in turn can cause outages.
The U.S. is exposed to drought, hurricanes, floods, and extreme temperatures, putting it at medium-high risk of future grid disruption.
Net Zero Policies Lagging as Emissions Reality Bites
IEA executive director Fatih Birol said, “Emissions from electricity need to decline by 55% by 2030 to meet our Net Zero Emissions by 2050 Scenario, but in the absence of major policy action from governments, those emissions are set to remain around the same level for the next three years.
“Not only does this highlight how far off track we currently are from a pathway to net zero emissions by 2050, but it also underscores the massive changes needed for the electricity sector to fulfil its critical role in decarbonizing the broader energy system.”
Fossil fuels may have the appearance of becoming a lesser part of the electricity mix. The reality is that their use remains reasonably stable, and renewables growth is simply meeting additional demand.
Opinion writer: Tom Shearman
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