IEA Report Forecasts Influx in Global Fossil Fuel Use

After more than a year of COVID-19 related lockdowns and industrial slowdowns, energy demand is rebounding, and in a big way. A report by the Paris-based International Energy Agency (IEA) analyzes the current trend in demand, and predicts a significant ramp-up fueled primarily by fossil fuels for the next year-and-a-half.


According to the report, global electricity demand fell by one percent in 2020 as the global response to the pandemic slowed consumption in both industrial and residential use. Now, as the world’s major economies begin to operate at full capacity again, energy demand is expected to grow beyond pre-pandemic levels. The report states that there is an expected 5 percent rise in global energy demand in 2021. The trend is predicted to carry into 2022, which is predicted to see an additional four percent rise in global demand. While the United States is the second-most electricity intensive country, the bulk of the rise in demand is expected to come from the Asia-Pacific region, more specifically China and India. The report states that China will account for “more than half” of the global energy demand growth, with India responsible for nine percent.


Contrary to action taken in the United States and other countries that have made major efforts both legislatively and socially to curb fossil fuel use, the IEA anticipates that coal will be the primary fuel source for the growth in demand. Fossil fuels will make up 45 percent of the additional demand in 2021 and 40 percent in 2021. This will lead to a five percent increase in global coal-fired generation in 2021, and three percent in 2022, a major rebound exceeding pre-pandemic levels of use. Last year saw a 3.5 percent reduction in global carbon emissions, which is expected to be nullified in 2021, followed by a 2.5 percent additional rise in 2022.


Renewable energy is partially to blame for the current and coming uptick in coal’s use. Though growing in global usage, renewable energy sources, such as solar photovoltaic and wind-powered generation, cannot meet the rising demand. According to the IEA report, renewables are expected to “serve only around half of the projected growth in global demand in 2021 and 2022.”


It is important to note that the rise in coal is not from domestic use. In fact, a recent report by the Institute for Energy Economics and Financial Analysis (IEEFA) shows a “surge” in coal-fired generation retirements in the US, which is being accelerated by growth in renewable energy.


Though large segments of major economies of the world are shifting their focus, and energy mixes, away from fossil fuels, the push for decarbonization via electrification and effects of exiting the pandemic are increasing energy demands. The uncertainty is how and when renewable energy sources can be made economically viable at the scale needed to meet future energy demand.


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