Global Demand for Fossil Fuel Electricity Has Peaked

This report is a sign of how fast and how far things can shift in a relatively short period of time.

fossil fuels

 John W Banagan / Getty Images

A few years ago, we started seeing headlines about the United Kingdom achieving Victorian-era carbon dioxide emissions thanks to the collapse of coal. While not quite as pronounced, U.S. coal retirements also pointed to a lower carbon future for electricity supply. Yet encouraging as these signs were, they were tempered by the big question of what would happen as the countries often referred to as ‘emerging markets’ connected more of their citizens to the electricity grid. 

Today, however, there appears to be some tentative good news on this front too. A new report from India’s Council on Energy, Environment and Water (CEEW) and the financial think tank Carbon Tracker, entitled "Reach for the Sun," suggests we are about to see a significant and historic "leap frog" by many emerging markets.1 That means they are going to largely bypass the need to build out expensive and soon-to-be-obsolete fossil fuel generation capacity, increasingly opting instead for the cheap-and-becoming-ever-cheaper option of renewables. So much so, that the report predicts that global fossil fuel-based electricity production may now have peaked.

Meanwhile Arunabha Ghosh, CEO of CEEW and report co-author, pointed to the report as a reason not to sit around and wait for the inevitable, but rather as yet another proof point for investing heavily in universal access to clean, zero carbon electricity: 

“Around 770 million people still lack access to electricity. They are a small share of forecast growth in electricity demand but the international community has a moral obligation to support universal electricity access as the basis for achieving many other sustainable development goals.”

There will, of course, be roadblocks and setbacks. And the report finds that vested interests in countries that export fossil fuels may well hold back the pace of change.1

They won’t, however, be able to stop it—they’ll just end up being the “laggards of the energy transition,” according to the report’s authors.

And given that 82% of current emerging market electricity demand, and 86% of expected demand growth, comes from countries that are net importers—not exporters—of coal and gas, the overwhelming majority of these nations have a powerful motivation for not getting trapped in a high carbon development model.1 

Whether exporters or importers, all nations run the risk of significant stranded assets if they don’t heed the warning signs of what’s coming. China alone could face more than $16 billion in stranded assets by 2030 if coal plants continue to be built. (The electricity sector in Europe wrote down $150 billion of losses after fossil fuel demand peaked in 2007.)

It’s some welcome good news amidst the extreme and even unprecedented heatwaves, but it should not be taken as a sign that we are out of the woods. In addition to electricity consumption, all nations—regardless of their current infrastructure or levels of wealth—are going to also have to decarbonize transportation, heavy industry, and agriculture/land use too. 

This report is a sign, however, of how fast and how far things can shift in a relatively short period of time. 

Sami Grover, July 2021 
https://www.treehugger.com/global-demand-for-fossil-fuel-electricity-peaked-report-5192717?utm_campaign=treehugger&utm_medium=email&utm_source=cn_nl&utm_content=24465372&utm_term=