Power sector

Electricity use grows rapidly, as emerging economies’ demand rises and all sectors electrify

Global electricity demand grows rapidly over the coming decade in Current Trajectory, rising to over 40,000TWh by 2035, more than 40% above the level in 2023. That is driven primarily by rising demand in the industrial and buildings sectors, which together comprise around 95% of current electricity use, and account for three-quarters of the increase in demand out to 2035.

New sources of power demand

Those existing sources of demand are supplemented in particular by two newer sources of power use: the increasing electrification of transport and the growing power needs of data centres. Higher data centre demand accounts for a tenth of the total increase in global power demand out to 2035, somewhat below the contribution from transport.

Electricity demand continues to grow strongly in the second half of the outlook in Current Trajectory, reaching almost twice its 2023 level by 2050. Industrial and buildings demand both continue to rise, but the largest single contributor to rising power demand between 2035 and 2050 is a tripling in electricity use in the transport sector (see Oil). The production of green hydrogen also begins to make a material contribution to demand, accounting for a little under 5% of total electricity use by 2050.

Demand from green hydrogen

Power demand rises at a similar rate out to 2035 in Below 2°, before accelerating more rapidly over the second half of the outlook. Industry and transport both electrify more rapidly than in Current Trajectory, together accounting for around 60% of the higher level of demand in 2050. But the biggest single contributor to higher electricity demand than in Current Trajectory comes from much higher production of green hydrogen, which alone accounts for almost 15% of total power used by 2050 (see Hydrogen and CCUS).

Regional pattern of growth

Most of the growth in power demand over the coming decade in Current Trajectory occurs in China and in other emerging economies. China’s electricity demand rises by around 5,000TWh between 2023 and 2035, accounting for 40% of the global increase in generation. Power demand in India also increases significantly, growing by more than 1,500TWh – an increase of around 85% relative to 2023. Together, China, India and other emerging economies account for more than three-quarters of the total increase in electricity demand between 2023 and 2035 in Current Trajectory.

After more than 15 years of broadly flat demand, power consumption also rises in developed economies, albeit by much less than in emerging economies, as electrification of industry, buildings and transport gathers pace.

US data centres

In the US, growing power demand from data centres plays a much more significant role than at a global level, accounting for around 40% of the total increase in electricity demand between 2023 and 2035 in Current Trajectory.

The global energy system continues to electrify

Electricity use by sector

The importance of electricity in global final energy use continues to rise over the coming decade in Current Trajectory, accounting for roughly two-thirds of the growth in TFC. That is led by the buildings sector, as the use of electrical appliances rises in emerging economies and heat pumps for space heating are more widely adopted, and by the industrial sector, as more processes are electrified. Electricity’s share in road transport also grows but remains less than 10% of the sector’s total energy consumption in 2035.

Electricity’s share of TFC continues to rise over the second half of the outlook in Current Trajectory, reaching around a third of global energy consumption by 2050. The sharpest increase occurs in road transport, as the composition of the global vehicle parc shifts more materially towards electric vehicles: by the end of the outlook, electricity accounts for almost 30% of energy consumption in road transport.

Electrification occurs at a much faster pace in Below 2°, reflecting greater policy support and incentives to decarbonize, with the share of electricity in TFC rising to over 50% by 2050. The greatest scope for electrification is in the buildings sector, where the share reaches almost 80%, with the additional growth relative to Current Trajectory driven by more rapid adoption of heat pumps and a greater phaseout of inefficient traditional biomass in emerging economies.

Electrification in different regions in Current Trajectory

The steady rise in electricity’s share of energy consumption masks different trends across countries and regions.

China begins the outlook with a significantly higher electrification share than many other countries, reflecting both the country’s desire to limit fossil fuel imports, and also the high share of manufacturing in the Chinese economy, which tends to be much more electrified than, for example, the transport sector. The share of electricity in China’s energy consumption continues to rise, increasing from 29% in 2023 to almost 40% by 2035.

The US, Europe and India’s pace of electrification has lagged that of China in the past, with electricity’s share in consumption in 2023 a little above 20% in all three. Those shares all rise over the coming decade, but more slowly than in China, such that the difference in the degree of electrification between China and these economies widens further.

Over the second half of the outlook, however, the pace of electrification in Europe picks up more rapidly, to reach levels similar to that in China, at around 45% of total consumption, by 2050. That is driven by very rapid electrification of European road transport, with the share of electricity rising from a little over 10% in 2035 to more than two-thirds by 2050. Electrification also accelerates in the US, but more slowly, with its share of TFC rising to a little below 40% by the end of the outlook.

Growing electricity demand is mostly met by rapid increases in wind and solar power

Wind and solar generation

Rapid growth in wind and solar power generation meets over 80% of the increase in electricity demand out to 2035 in Current Trajectory, with half of that occurring in China. Solar generation continues to grow more rapidly than wind power, reflecting faster declines in costs, shorter deployment timelines and greater policy support. This large expansion in wind and solar means that power systems need to enhance their resilience to increasing generation from variable sources. Delivering this resilience will require a range of measures including increased flexible generation and energy storage, greater demand-side responsiveness, more advanced grid technologies and enhanced interconnections. See pages 58-59 of the 2024 Energy Outlook for more discussion of these issues.

Low carbon power generation is further boosted by steady growth in hydropower, which rises by around 25% by 2035, and by some renewed growth in nuclear generation (see nuclear power generation). Generation from geothermal rises but remains a very small proportion of total power generation.

Decline in coal generation

The main counterpart to the rising share of low carbon generation over the coming decade is a marked decline in the share of coal power, which falls from around 35% of global generation in 2023 to a little above 20% in 2035, driven primarily by declining coal use in China (see Coal).

In contrast, the level of natural gas-powered generation rises by around 30% between 2023 and 2035, such that its share of total global generation falls only slightly. A third of that increase in gas-powered generation is in the US, with most of the rest in emerging economies.

Power generation post-2035

These trends largely continue over the second half of the outlook in Current Trajectory, with wind and solar power reaching over half of total global electricity generation by 2050. That reflects accelerating deployment across a range of emerging economies as financing challenges and infrastructure limitations ease. Natural gas generation rises further over the second half of the outlook, with that growth entirely accounted for by (non-China) emerging economies.

In Below 2°, coal is displaced much more rapidly than in Current Trajectory and natural gas generation declines from the late 2020s onwards. These declines are primarily driven by even more rapid deployment of wind and solar power, which accounts for 70% of global generation by 2050.

Power sector addition to substitution

An increasing number of countries are moving into ‘power sector substitution’, with rapid deployment of solar and wind power meaning that fossil-based generation is declining. That is already the case for regions accounting for around 40% of global electricity demand.

In Current Trajectory that share rises to around 60% of global power demand by 2035, as countries including China increase renewables generation sufficiently rapidly to more than meet their additional power needs.

By 2050, around 70% of global power demand is in countries or regions that are in this ‘substitution’ phase. That shift happens even more rapidly in Below 2°, so that all regions enter the substitution phase before 2050.

Nuclear power generation helps to meet growing demand for firm, low carbon electricity

Nuclear power in Current Trajectory

Nuclear power generation has been broadly flat over the past two decades, such that its share of global electricity generation has fallen from over 15% in 2000 to below 10% in 2023. Over the coming decade, however, nuclear generation begins to rise in Current Trajectory, growing by almost 30% by 2035, boosted by countries’ desire to produce firm, low carbon power that enhances their energy security needs and supports their climate goals. Given the rapid growth in electricity demand, however, nuclear power’s share of total generation nonetheless declines slightly, to around 8% in 2035.

Growth in nuclear generation out to 2035 in Current Trajectory is dominated by additional capacity coming online in China, which accounts for around 70% of growth in global nuclear generation. As a result, China surpasses the US as the world’s largest producer of nuclear power in the early 2030s. China’s nuclear expansion continues to be underpinned by long-term planning, streamlined state financing and an established delivery model, which together enable relatively cost-effective deployment.

The remainder of the growth in global nuclear generation over the coming decade in Current Trajectory takes place through new capacity coming online in India and a range of other emerging economies, together with some further restarts of plants in Japan. US nuclear generation is flat over the coming decade, sustained by lifetime extensions of most existing reactors and some limited restarts.

Nuclear generation rises at a similar pace over the second half of the outlook in Current Trajectory, with that growth continuing to be dominated by China. By 2050, China accounts for around 40% of global nuclear generation, compared with around 15% in 2023. Nuclear power’s share of global power generation is broadly stable over the second half of the outlook.

Nuclear power in Below 2°

Nuclear generation grows more rapidly in Below 2°, reflecting the greater pressure and support to decarbonize power systems in many economies. Given the lengthy lead times required to develop new nuclear plants, much of this growth is concentrated in the second half of the outlook. By 2050 generation has more than doubled from its 2023 level, although its share of total power does not rise above 10%.

The importance of nuclear power in both scenarios is limited by its relatively high cost compared to other low carbon energy sources, especially wind and solar. Moreover, the capital-intensive nature of nuclear energy means that it is most suited to being operated near continuously as baseload generation. As such, it may be challenging for nuclear to provide the more flexible generation that many grids could require as a complement to rapidly growing wind and solar power.

Emissions from the global power sector fall despite rising electricity demand

Power sector emissions in the two scenarios

Emissions from electricity generation currently account for around a third of total global energy system emissions. That share has been broadly flat throughout this century, with power system emissions rising by more than 50% since 2000, roughly in line with energy system emissions as a whole.

That past trend of rising emissions from electricity generation reverses around the start of the outlook period in Current Trajectory, despite further rises in power demand. This is enabled by rapid deployment of low carbon electricity outpacing total power demand growth. In other words, the global power system in aggregate moves from ‘energy addition’ to ‘energy substitution’ over the coming years (see electricity demand).

Global power system emissions decline by around a third over the outlook in Current Trajectory, even as electricity generation rises by over 90%. The average carbon intensity of electricity generation falls by around two-thirds between 2023 and 2050, driven by the sharply rising share of wind and solar generation and the falling role of coal generation (see electricity demand).

The fall in power systems emissions is larger still in Below 2°, despite even stronger electricity demand growth. Emissions from the sector fall to below 1Gt, a drop of around 95%, representing near total decarbonization of the world’s power systems.

Analysing the path of power sector emissions in Current Trajectory

The difficulty of decarbonizing power sector emissions depends on the growth in electricity demand.

Chinese and Indian power demand both increase strongly out to 2035 in Current Trajectory. And both begin the outlook period with relatively carbon-heavy generation mixes.

Despite that, China’s power system emissions fall over the coming decade in Current Trajectory, as wind and solar generation rapidly replace coal so that the average carbon intensity of generation falls by almost a half.

India’s carbon intensity also declines as renewables deployment rises, but not by enough to offset the 85% growth in power demand. As a result, Indian power sector emissions rise by 600MtCO₂, or around 40%.

Power demand returns to growth in the US and the EU over the next decade, rising by around 30% in each case. In the EU decarbonization of the sector accelerates, such that power sector emissions fall by more than half despite rising generation. The pace of falls in the carbon intensity of US generation slows somewhat, but is still sufficient to offset rising power demand, leading to broadly flat power sector emissions there.

Over the second half of the outlook in Current Trajectory, emissions from power generation fall in China, the EU and the US, partly due to slowing power demand growth as efficiency gains accelerate.

India, in contrast, sees a further 60% rise in power demand over this period. Despite that growth, emissions plateau and then begin to decline in the final years of the outlook, enabled by wind and solar power rising to half of total generation by 2050.