Building back badly

 From EMBER

This report provides a mid-year update to Ember’s annual Global Electricity Review.  It compares the first six months of 2021 (H1-2021) to the same period in 2019 (H1-2019), to show for the first time how the electricity transition has changed as the world rebounds from the impact of the pandemic in 2020.

We have researched monthly electricity data to June 2021 for 63 countries covering 87% of the world’s electricity production. We have made this data available in full for all to use.

Rising global electricity demand outpaced growth in clean electricity, which led to an increase in coal power, raising CO2 emissions. Global power sector emissions rebounded in the first half of 2021, increasing 12% from the lows seen in H1-2020, so that emissions are now 5% above the pre-pandemic levels of H1-2019. Global electricity demand also rose by 5% in the first half of 2021 compared to pre-pandemic levels, which was mostly met by wind and solar power (57%) but also an increase in emissions-intensive coal power (43%) that caused the rise in CO2 emissions. Gas was almost unchanged, while hydro and nuclear saw a slight fall. For the first time, wind and solar generated over a tenth of global electricity and overtook nuclear generation.

No country has yet achieved a truly ‘green recovery’ for their power sector, with structural change in both higher electricity demand and lower CO2 power sector emissions. Several countries including the US, EU, Japan and Korea achieved lower power sector CO2 emissions compared to pre-pandemic levels – with wind and solar replacing coal – but only in the context of suppressed demand growth. Countries with rising electricity demand also saw higher emissions, as coal generation increased as well as wind and solar. These ‘grey recovery’ countries are mostly in Asia: China, Bangladesh, India, Kazakhstan, Mongolia, Pakistan and Vietnam.

China needs to urgently expedite its electricity transition. China’s electricity demand rose by 14% from H1-2019 to H1-2021 and is approaching EU per capita levels. Over two-thirds (68%) was met by coal power and the rest by wind and solar (29%). China was responsible for 90% of the world’s increase in electricity demand and 43% of the world’s increase in wind and solar during this period. It added more coal power (+337 TWh) than the EU’s total coal generation in H1-2021. As a result, China’s share of global coal generation rose from 50% in 2019 to 53% in H1-2021.

But there is hope.  The growth rate of renewables is much faster than the growth rate in demand:

CO2 emissions rose because growth in clean electricity did not match the rise in demand. Wind and solar met 57% of the demand rise, but coal met the remaining 43%. The chart below shows an addition of 332 TWh of wind and solar and 254 TWh of coal was needed to meet the 5% rise in global electricity demand from H1-2019 to H1-2021. 

Wind generation rose by 26% and solar generation rose by 46%. Coal generation rose by 5.8%, picking up the rest of the electricity demand increase simply because the rise in clean electricity generation didn’t match the rise in electricity demand.

Wind and solar provided 10% of total global electricity demand.  If wind and solar combined growth by 25% (less than wind alone so far this year) then that increase will supply the first 2.5 percentage points of any increase in electricity demand.  So if electricity demand rises by say 5%, only half of increased demand will be provided by wind and solar.   But at a 25% growth rate,  the percentage that wind and solar make up of total electricity supply will surpass 20% of total electricity generation within 5 years.  At that point, a 25% increase in renewables generation will supply the first 5 percentage points of the increase in electricity demand.  From that point on, renewables will provide more electricity than the rise in electricity demand.  And, if electricity demand grows more slowly than 5% ― as it surely will after the post-pandemic rebound ― then that tipping point will come more quickly.  Already new-build wind and solar are now cheaper than the operating costs of fully-depreciated, paid-off coal power stations in half the world.  There is no reason for the growth in wind and solar to slow.   

We have lost this battle, but not the war.