Despite reducing electricity demand due to COVID-19, the Asia-Pacific region maintained positive yearly growth rates in electricity demand
Electricity has played a key role in uplifting economies and forms a crucial component in bridging the economic divide.
In a recently released report by the International Energy Agency, demand for electricity in the Asia-Pacific region is expected to have grown by 8% in 2021, from a low of 2% in 2020. This growth is led mainly by China and India, both registering a significant increase of 10% each.
With the exception of Japan, most countries in the region are expected to witness continued demand growth up till 2024.
Exhibit 1: Asia-Pacific’s electricity demand growth stabilises after a rebound in 2021
What’s happening in China?
Demand for electricity in industrial and commercial sectors have recovered strongly from the pandemic in 2021. Meanwhile, demand for electricity is expected to grow to pre-pandemic levels in all sectors in the country between 2021-2024.
In terms of electricity supply, China’s electricity mix continues to be dominated by coal. In 2021, coal made up 64% of the overall power generation. But by 2024, coal’s dominance is expected to slide down.
Exhibit 2: Electricity generation mix in China, 2015-2024
It is expected that by 2024, renewable energy will meet over 70% of the additional electricity demand, while coal will only fill 25% of that increment in China.
Exhibit 3: Change in electricity generation in China, 2015-2024
What about India?
A similar trend in electricity demand is being witnessed in India. The demand has even broken pre-pandemic records. In 2021, demand was expected to grow by 10%, while expectedly remaining around 6.5% each year between 2022-2024.
Exhibit 4: Monthly electricity supply in India, 2019-2021
And in terms of supply, coal continues to dominate the electricity generation mix. In 2021, coal made up 74% of the overall power generation, with renewables occupying one-fifth of the mix. But renewables are catching up soon, and are expected to increase by 30% by 2024.
Exhibit 5: Change in electricity generation in India, 2015-2024
Renewals set to meet a large share of the new demand
A significant decrease in coal as a source for electricity generation is forecasted by 2024. In all of Asia-Pacific, renewables is expected to dominate the electricity generation mix.
Exhibit 6: Change in electricity generation, 2015-2024
This large shift will result in substantial reductions in emissions intensity. Emissions are expected to slide down to low levels in countries such as Japan and Korea.
Exhibit 7: Development of emissions intensity, 2015-2024