Electricity Is the ‘New Fuel of Choice’ Says IEA

According to the International Energy Agency, “2018 is the year of electricity” and global electricity supply “is being transformed by the rise of renewables”.

“Electricity has been the fastest growing element of final demand and is set to grow much faster than energy consumption as a whole over the next 25 years,” said Dr Fatih Birol, the IEA’s Executive Director.

Speaking yesterday at the launch in London of the IEA’s annual World Energy Outlook (WEO), Birol noted that the power sector now attracts more investment than oil and gas combined – a major shift for the energy market.  And it also marks a similar shift for the IEA itself – for the first time, it devotes several chapters in the weighty WEO to electric power.IEA launches WEO and says “2018 is the year of electricity” 

The WEO states that global electricity supply “is being transformed by the rise of renewables, putting electricity at the centre of the response to a range of environmental challenges”.

It stresses that “increasing digitalization of the global economy is going hand-in-hand with electrification, making the need for electricity for daily living more essential than ever.  Electricity is increasingly the ‘fuel’ of choice for meeting the energy needs of households and companies.”

In what it calls its New Policies Scenario, the IEA forecasts that between now and 2040, nearly 90 per cent of electricity demand growth will be in developing countries, while demand in advanced economies will come on the back of policies promoting the electrification of mobility and heat.

In this scenario, it adds that by 2040, electricity demand in China will be more than twice that of the US, “with India a not-too-distant third”.

And the IEA notes that the potential for further electrification from today “is huge”:  65 per cent of final energy use could technically be met by electricity – today’s figure is 19 per cent.

Birol also confirmed that for the first time, the total number of people with no access to electricity has fallen below 1 billion, driven in large part by the rural electrification efforts of the India government.

And this kind of government intervention will increase, predicts the IEA.  It advises that governments will have a critical influence in the direction of the future energy system, far more so than in recent years.

“Over 70 per cent of global energy investments will be government-driven and as such the message is clear – the world’s energy destiny lies with government decisions,” said Dr Fatih Birol, the IEA’s Executive Director.

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