IEA forecasts a slowdown in global electricity demand in 2022 and 2023

Electricity demand growth across the globe is slowing sharply in 2022 from its strong recovery last year as economic growth weakens and energy prices soar following Russia’s invasion of Ukraine, according to the International Energy Agency (IEA)’s latest report on Wednesday.

Global electricity demand is forecast to expand by 2.4% in 2022 after rising 6% last year, bringing its average growth rate over the five years before the Covid-19 pandemic. While energy demand is forecast to rise into 2023, the outlook is clouded by economic turbulence and uncertainty over how fuel prices could impact the generation mix, said the report.

In 2022, demand growth in the Asia-Pacific region is predicted to be 3.4%, down from the previous report’s forecast of a 4.0% increase.

Meanwhile, demand in China is likely to expand by 3% in 2022, but the outlook is still highly uncertain. In 2023, demand is expected to increase by 4%, supported by recovery from suppressed demand due to lockdowns the year prior.

“The world is in the midst of the first truly global energy crisis, triggered by Russia’s invasion of Ukraine, and the electricity sector is one of the most heavily affected,” said IEA Director of Energy Markets and Security Keisuke Sadamori. “This is especially evident in Europe, which is experiencing severe energy market turmoil, and in emerging and developing economies, where supply disruptions and soaring fuel prices are putting huge strains on fragile power systems and resulting in blackouts. Governments are having to resort to emergency measures to tackle the immediate challenges, but they also need to focus on accelerating investment in clean energy transitions as the most effective lasting response to the current crisis.”