Page 6 - AsiaElec Week 29 2022

AsiaElec COMMENTARY AsiaElec

Green output rises faster than

power demand in 2022

COMMENTARY Renewable power generation has grown faster prices in Europe were four times as high as in the
than sluggish electricity demand so far in 2022, same period in 2021 while coal prices were more
driven by strong capacity additions, IEA data than three times as high, resulting in wholesale
showed, dragging gown global power sector electricity prices more than tripling in many
CO2 emissions slightly despite rising coal use in markets.
Europe. The IEA’s price index for major global electric-
Strong capacity additions are set to push up ity wholesale markets reached levels that were
global renewable power generation by more than twice the first-half average of the 2016-2021
10% in 2022, displacing some fossil fuel gener- period.
ation. However, renewables have not proved
completely able to replace fossil fuels, and tight Coal’s recovery
natural gas markets are currently favouring coal- In the first half of 2022, many electricity markets
fired power plants. continued to experience skyrocketing prices,
Global electricity demand growth has slowed particularly in Europe, reflecting deep uncer-
sharply so far in 2022, following its rapid recov- tainties over both fossil fuel supplies and the
ery in 2021. The IEA blamed weakening eco- economic outlook. Russia’s invasion of Ukraine
nomic growth and soaring energy prices caused shattered any hope of energy prices declining in
by Russia’s war against Ukraine. the near term following the strong increases seen
Global electricity demand is expected to grow in the second half of 2021.
by 2.4% in 2022 after last year’s 6% increase, the In Europe, the situation prompted heightened
IEA said in its latest Electricity Market Report. ambitions and strengthened policies to advance
This 2.4% increase returns 2022 growth to clean energy transitions and reduce dependency
the five-year average seen in the five years prior on fuel imports. But in the short term, it also
to the Covid-19 pandemic, suggesting that the resulted in a partial return to coal-fired electric-
immediate impact of the pandemic on power ity generation.
demand – a rapid fall followed by a major spike Globally, coal use for power is expected to
– has not passed. increase slightly in 2022 as growth in Europe is
However, the report warned that while the balanced by contractions in China, due to strong
IEA currently expected electricity demand to renewables’ growth and only a modest rise in
continue on a similar growth path into 2023, electricity demand, and the United States, due
the outlook was clouded by economic turbu- to constraints on supply and coal power plant
lence and uncertainty over how fuel prices could capacity.
impact the generation mix. Gas power is expected to fall by 2.6% as
declines in Europe and South America outweigh
Behind the data growth in North America and the Middle East.
Strong capacity additions are set to push up “The world is in the midst of the first truly
global renewable power generation by more global energy crisis, triggered by Russia’s inva-
than 10% in 2022, displacing some fossil fuel sion of Ukraine, and the electricity sector is one
generation. of the most heavily affected,” said IEA Director of
Despite nuclear’s 3% decline, low-carbon Energy Markets and Security Keisuke Sadamori.
generation, including nuclear, is set to rise by 7% “This is especially evident in Europe, which is
overall, leading to a 1% drop in total fossil fuel- experiencing severe energy market turmoil, and
based generation. in emerging and developing economies, where
As a result, carbon dioxide (CO2) emis- supply disruptions and soaring fuel prices are
sions from the global electricity sector are set putting huge strains on fragile power systems
to decline in 2022 from the all-time high they and resulting in blackouts. Governments are
reached in 2021, albeit by less than 1%. having to resort to emergency measures to tackle
IMF data showed how manufacturing and the immediate challenges, but they also need to
the oil and gas sectors had caused carbon diox- focus on accelerating investment in clean energy
ide and other greenhouse gases to rise by 6.4% transitions as the most effective lasting response
in 2021. to the current crisis.”
In the first half of 2022, average natural gas

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