Electricity Market Report
January 2022

Abstract

Electricity Market Report – January 2022

Abstract
The year 2021 placed exceptional demands on electricity markets
around the world. Strong economic growth, combined with more
extreme weather conditions than in 2020, including a colder than
average winter, boosted global electricity demand by more than 6%– the largest increase since the recovery from the financial crisis in
2010. The fast rebound in overall energy demand strained supply
chains for coal and natural gas, pushing up wholesale electricity
prices. Despite the impressive growth of renewable power,
electricity generation from coal and gas hit record levels. As aresult, the global electricity sector’s annual carbon dioxide
emissions leaped to a new all-time high after having decreased forthe previous two years.

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Building on our analysis of these recent events, the January 2022
edition of the IEA Electricity Market Report presents our forecasts
for demand, supply and emissions in global electricity markets
through 2024. While renewables are set to meet the vast majority of
the increase in global electricity demand in the coming years, thistrend would only result in a plateauing of emissions from electricity
generation. That is insufficient for the power sector to fulfil its criticalrole as a leading force in the decarbonisation of economies aroundthe world.

Table of contents

Electricity Market Report – January 2022

Table of contents
Executive summary ......................................................................................... 5
Global overview ............................................................................................... 7
Demand, supply and emissions ................................................................ 8
Economic recovery .................................................................................. 15
Fossil fuels ............................................................................................... 18
Wholesale prices ..................................................................................... 27
Climate protection policies and impact .................................................... 30
Regional perspective.....................................................................................39
Asia Pacific .............................................................................................. 40
Americas .................................................................................................. 59
Europe ..................................................................................................... 68
Eurasia .................................................................................................... 80
Middle East .............................................................................................. 87
Africa ....................................................................................................... 94

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Annex ............................................................................................................103

Executive summary

Electricity Market Report – January 2022

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Executive summary

Executive summary

Electricity Market Report – January 2022

Executive summary
During 2022-2024, we expect rapidly growing renewables toalmost match moderate demand growth. We anticipate averageannual electricity demand growth of 2.7%, but the Covid-19
pandemic and high energy prices add uncertainty to this. Recordbreaking renewables growth (up 8% per year on average) is set toserve more than 90% of net demand growth during this period. We
expect nuclear-based generation to grow by 1% annually during thesame period (meeting 4% of global demand growth).

After small drop in 2020, global electricity demand grew by 6%
in 2021. It was the largest ever annual increase in absolute terms(over 1 500 TWh) and the largest percentage rise since 2010 after
the financial crisis. Around half of the global growth took place in
China, where demand increased by an estimated 10%. Global
electricity demand was boosted by a rapid economic recovery,
combined with more extreme weather conditions than in 2020,
including a colder than average winter. The industrial sector
contributed the most to demand growth, followed by the commercial
and services sector and then the residential sector.

Fossil fuel generation is set to stagnate over the next three
years. As a consequence of slowing electricity demand growth andsignificant additions of renewable power capacity, fossil fuel-based
generation is seen broadly flat in the coming years. We expect coalfired generation to fall slightly as phase-outs and declining
competitiveness relative to natural gas in markets like theUnited States and Europe are offset by growth in China and India.
Gas-fired generation is forecast to grow annually by around 1%.

Coal met more than half of the increase in global demand.
Coal-fired electricity generation reached an all-time peak, growing
by 9%, the fastest since 2011, propelled by the exceptional demandand coal’s cost competitiveness in some markets compared to gas.
Renewables grew strongly, by 6%, despite growth being limited byunfavourable weather conditions (in particular for hydropower).
Gas-fired generation grew by 2%, while nuclear increased by 3.5%,
almost reaching its 2019 levels. In total, CO2 emissions fromelectricity rose by close to 7%, taking them to a record high.
The increased demand for fossil fuels combined with supply
constraints resulted in scarcities and high energy prices. Due toparticularly high prices for gas in Europe and its 20% share in thegeneration mix, average wholesale electricity prices in the
fourth quarter of 2021 were more than four times as high as
their 2015-2020 average.

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Today’s policy settings are insufficient to cut emissions. In our
forecast, power sector emissions remain around the same levelfrom 2021 to 2024, whereas they need to start declining sharply tomeet the IEA’s Net Zero Emissions by 2050 Scenario. This
underlines the massive changes needed in terms of energy
efficiency and low-carbon supply for the electricity sector to fulfil its
critical role in decarbonising the broader energy system.

Global overview

Electricity Market Report – January 2022

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Global overview

Global overview

Electricity Market Report – January 2022

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Demand, supply and emissions

Global overview

Electricity Market Report – January 2022

After a strong increase in 2021, demand growth slows in the coming years
After small drop in 2020, global electricity demand grew by around
6% in 2021. It was the largest ever annual increase in absoluteterms (over 1 500 TWh) and the largest relative rise since therecovery from the financial crisis in 2010. A rapid economic
recovery, combined with more extreme weather conditions than in
2020, including a colder than average winter, boosted demand. We
estimate that the industrial sector contributed the most to demand
growth, followed by the commercial and services sector and thenthe residential sector.

The majority of supply growth in the years 2021 to 2024 is expected
in China, accounting for around half of the net total increase,followed by India (12%), Europe (7%) and the United States (4%).
China faced some supply difficulties at the beginning of the fourth
quarter of 2021 due to coal shortages. After demand in the first
three quarters of the year increased by almost 11% compared to thesame period in 2020, we expect close to 10% growth for the full
year. For the years 2022-2024 we expect demand growth to slow to
an average of 4.5% (we refer to the compound average annual
growth rate (CAAGR) when talking about average growth) due toefficiency improvements and slower economic growth.

Due to the fast recovery in 2021, we have revised our expectations
for electricity demand growth in 2022 down from 4% to 3%. This issimilar to the average growth rate for the 10 years before theCovid-19 pandemic. Demand growth continues strongly for threemajor reasons. First, we expect a continued economic recovery.
Second, rebound effects will continue in 2022 because healthprotection measures in place at times in 2021 dampened demand.
And finally, the expected easing of the energy crisis, which resulted

Demand in India declined by 7% from April to May 2021 due tosurging Covid-19 cases. Consumption quickly recovered in Juneand reached new all-time highs in July and August. Temporary coalsupply shortages, peaking at the beginning of the fourth quarter of2021, did not prevent strong annual growth overall, estimated at
10% year-on-year.

in supply shortages and prohibitively high energy prices in the fourth
quarter of 2021, will support growth. However, the development ofenergy prices and the Covid-19 pandemic are the main
uncertainties for the demand outlook. We expect a slowdown inglobal electricity demand growth during 2023 (2.6% increase) and
2024 (slightly above 2% increase) as rebound effects run out andenergy efficiency measures start showing effects.

In Europe and the United States, demand in 2021 recovered to

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reach similar levels to those seen in 2019 before the pandemic –supported in both regions by higher weather-driven demand. For the
coming years we expect slow average growth, with energy
efficiency measures countering increasing electrification.

Global overview

Electricity Market Report – January 2022

Global demand growth is concentrated in emerging and developing Asia

Change in electricity demand (TWh)Global change in electricity demand, 2015-2024
2 000
1 500
1 000
500
0
- 500
-1 000

2015

China

2016

2017

2018

United States

2019

India

2020

Europe2021

2022

Others2023

2024

Net change

IEA. All rights reserved.

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Source: IEA analysis based on data from IEA (2022), Data and statistics.

Global overview

Electricity Market Report – January 2022

Coal came back in 2021, but renewables dominate medium-term supply growth
The year 2021 was exceptional for electricity markets due to thestrong growth in electricity demand, unfavourable renewableconditions and increasing gas prices.

provide more than 32% of the world’s electricity supply (from 28% in2021).
Nuclear electricity generation is forecast to grow on average by 1%
between 2022 and 2024, mostly supported by nuclear generation
growth in the Asia Pacific region. In total, we expect the low-carbon

Total thermal electricity generation increased by almost 6%(980 TWh) in 2021, the highest growth since 2010. After declining in2019 and 2020, coal-fired electricity generation increased by around
9% and reached a new all-time high. Coal served more than half of
the additional demand in 2021, growing in absolute terms fasterthan renewable energy for the first time since 2013. Gas-fired

share of total generation to increase to 42% (from 38% in 2021).
Although almost stagnating from 2022 to 2024 (growing on averageby 0.2% annually), we expect fossil fuels still to produce 58% of
total electricity generation in 2024, down from 62% in 2021.

electricity, hampered by high gas prices, increased globally by 2%,
offsetting the decline in 2020.

Despite a growing number of zero emissions pledges and phase-out
plans for unabated coal, we expect coal-fired electricity generation
to provide 34% of global generation in 2024, down from 36% in
2021. After the steep increase in 2021, we anticipate coal-fired
generation to remain flat until 2024.

Low-carbon generation increased by 5.5% (555 TWh) in 2021, with
83% of it being renewable. Despite unfavourable weather
conditions, absolute growth in renewable electricity generation in
2021 was the highest ever in absolute terms (up 6%). Nuclear grewby around 3.5% to reach almost the level of 2019.

After reaching around pre-pandemic 2019 generation levels in 2021,
we see gas-fired electricity growing at an average 1% annual pace
until 2024. The majority of this growth, however, is expected in
2023, when current forwards indicate a return of gas prices to lower

The outlook for 2022 to 2024 shows a quite different picture fromthat seen in 2021. Assuming weather conditions return to long-term
averages, we expect renewables to be responsible for the vast
majority of the supply increase in the coming years, growing on
average by 8% per year. By 2024 renewable electricity could

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levels.

Global overview

Electricity Market Report – January 2022

Of all electricity sources, coal-fired power saw the largest annual growth in 2021

Change in electricity generation (TWh)Global change in electricity generation, 2015-2024
2 000
1 500
1 000
500
0
- 500
-1 0002015

Nuclear

2016

2017

Coal

2018

Gas

2019

2020

Other non-renewables

2021

2022

Renewables

2023

2024

Net change

IEA. All rights reserved.

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Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Global overview

Electricity Market Report – January 2022

Global power system emissions jumped in 2021; expected to plateau during 2022-2024
Regional evolution of global power system emissions intensity,
2015-2024
CO₂ intensity (g CO₂/kWh)After declining in 2019 and 2020, global electricity sector emissions
grew by close to 7% and reached a new all-time peak in 2021. Coal
was the main driver of this increase in 2021, accounting for over
800 Mt of CO2 emissions growth.
The slower demand growth and continued increase of low-carbon
generation after 2021 limits emissions growth to significantly lessthan 1% annually from 2022 to 2024, as combined gas- and coalfired generation emissions increase slowly. By 2024 emissions frompower generation reach over 13 Gt of CO2.
In our forecast, power sector emissions remain around the samelevel from 2021 to 2024, whereas they need to start declining
sharply to meet the IEA’s Net Zero Emissions by 2050 Scenario.
This underlines the massive changes needed in terms of energy
efficiency and low carbon supply for the electricity sector to fulfil its
critical role in decarbonising the broader energy system.

900
800
700
600
500
400
300
200
100
0
2015

The emissions intensity of global power generation grew by 1% in
2021, the first growth since 2011. We expect it to decline annuallyon average by 2% during 2022 to 2024, as low-carbon sources
cover the majority of additional demand during that time. Although
the emissions intensity between 2021 and 2024 declines in 78% of
all countries, representing 95% of global consumption, the

2017

2019

2021

2023

OthersEuropeIndia

United States

China

World

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magnitude of reductions varies widely across different regions.
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Source: IEA analysis based on data from IEA (2022), Data and statistics.

Global overview

Electricity Market Report – January 2022

Coal-fired power generation was the main cause of the emissions increase in 2021

Change in emissions (Mt CO₂)

Change in electricity generation emissions by source, 2015-2024
1 000
800
600
400
200
0
- 200
- 400
- 600

2015

2016

2017
Coal

2018
Gas

2019

2020

Other non-renewables

2021

2022

2023

2024

Net change
IEA. All rights reserved.

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Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Global overview

Electricity Market Report – January 2022

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Economic recovery

Global overview

Electricity Market Report – January 2022

Diverging economic recovery expected for 2021
The global economy recovered significantly in 2021 after a steep
decline in 2020. In October 2021, the International Monetary Fund(IMF) estimated global GDP growth of 5.9% for 2021, followed by
4.9% in 2022, 3.6% in 2023 and 3.4% in 2024. Compared with its
April 2021 estimate, this corresponds to slightly lower growth for2021 (down 0.1 percentage points) and higher growth in 2022 (up0.5). The downward adjustment of the growth estimate for 2021 hadsurrounding the national debt ceiling. For 2022, a 5.2% increase
followed by on average 2% growth in 2023 to 2024 is expected.
The euro area’s economy was estimated to grow by 5% in 2021
and 4.3% in 2022 (before slowing down to below 2% in 2023 and2024), as activity continues to rebound in parallel with the vaccineroll-out. However, supply shortages, among other factors, havenecessitated downward revisions to 2021’s growth estimates forsome countries, compared with the April 2021 forecast. The United
Kingdom follows a similar pattern than the euro area.

several reasons, including Covid-19 surges in low-income countries
and supply disruption in advanced economies. Varying vaccine rollouts and fiscal support levels affect the anticipated levels of
economic growth in individual countries.

China and India are still showing strong signs of recovery, with anestimated GDP increase of 8% (China) and 9.5% (India) for 2021,
and above 5% (China) and above 6% (India) in the following years.
However, the full economic impact of energy and supply shortages
is yet to be seen. The IMF expects Japan’s GDP to return to about
the 2019 level by 2022 and economic growth to decline from above
3% in 2022 to below 1% in 2024

High energy prices could also have impacts on macroeconomic
indicators in several countries. In October the World Bank issued analert on the near-term risks of global inflation and the adverse effecton growth, particularly for energy-importing countries. The IMF also
warned that energy prices as high as in October 2021 could imply a
global economic growth reduction of 0.3 percentage points in 2021
and 0.5 percentage points in 2022.

Sub-Saharan Africa continues its economic recovery, with forecast
GDP growth rates of 3.7% for 2021, 3.8% for 2022 and around 4%

For the United States, the IMF expected 6% GDP growth in 2021,

in 2023 and 2024, related to the positive outlook for commodity
exporting countries. However, some countries are facing upward

lower than the uplift assumed in the April 2021 edition of this report.
The downward adjustment relates mainly to supply disruptions,decreased consumption in the third quarter and uncertainties

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inflationary pressure related to food supply shortages.

Global overview

Electricity Market Report – January 2022

The economies of China and India are expected to grow strongly in the coming years
35%
30%
25%
20%
15%
10%
5%
0%
-5%

2020
2021
2022
2023
2024

2020
2021
2022
2023
2024

2020
2021
2022
2023
2024

2020
2021
2022
2023
2024

2020
2021
2022
2023
2024

2020
2021
2022
2023
2024

2020
2021
2022
2023
2024

-15%

2020
2021
2022
2023
2024

-10%

2020
2021
2022
2023
2024

Real GDP, annual change (bars) and accumulatedchange relative to 2019 (dots)

GDP assumptions by country and region, 2020-2024

UnitedStatesEuro area

UnitedKingdom

Japan

China

India

RussiaBrazilSouth Africa

Advanced economies

Emerging and developing economies
GDP relative to 2019
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Notes: The bars represent annual changes in GDP relative to the previous year. The dots show accumulated changes relative to 2019.
Source: Based on International Monetary Fund (October 2021), World Economic Outlook Database.

Global overview

Electricity Market Report – January 2022

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Fossil fuels

Global overview

Electricity Market Report – January 2022

Gas and coal prices surged in the second half of 2021, raising thermal generation costs
Natural gas and coal prices surged to multi-year highs in the second
half of 2021, caused by a tight supply–demand situation. Gas andcoal demand were higher than expected, as unforeseen weatherrelated events contributed to higher consumption, alongside thestrong economic recovery. On the supply side, both gas and coal
faced constraints, including heavy maintenance and unplanned
outages. The tight summer market in the northern hemisphere led tosluggish build-up of gas and coal inventories, which provided further
upward pressure on prices in the second half of 2021.

of early January 2022. Nonetheless, coal-based generation remains
more competitive than gas, compared to the 2018-2020 period.
In Europe, gas prices on the TTF soared to all-time highs in thesecond half of 2021 as supply struggled to keep up with highdemand. Coal prices followed suit, although rising less sharply.
Despite record high carbon prices in both the European Union andthe United Kingdom, high gas prices supported gas-to-coalswitching. Forward curves as of early January 2022 suggest gas
prices averaging 5% below their 2021 levels during the 2022-2024
period, improving the cost-competitiveness of gas vis-à-vis coalfired power plants. The high gas, coal and emission allowance
prices in the European Union and the United Kingdom drove up thegeneration costs of thermal power plants and placed upward

In the United States, Henry Hub natural gas prices more thandoubled compared to 2020 to average USD 4.6/MBtu in the second
half of 2021 – their highest level for this period of the year since2008. Total system demand (including exports) outpaced production
growth, supporting gas prices. Coal prices remained more stable:
fuel costs for coal-fired generation increasing by less than 6% in thesecond half of 2021 compared to the same period in 2020. This
increased the cost-competitiveness of coal-fired generation vis-à-vis
gas-fired power plants, resulting in substantial gas-to-coal switching.
During the 2022-2024 period, improving supply availability is
expected to put downward pressure on gas prices, with Henry Hub
averaging 12% below its 2021 levels according to forward curves aspressure on electricity prices.
In Japan and Korea, oil-indexed LNG prices rose less strongly thanin other regions in the second half of 2021, while coal prices surged
to all-time highs. This improved the competitive position of gas-fired
power plants. According to forward curves as of early January 2021,
coal-fired power generation is set to regain its cost-competitive
position over the medium term, coal prices averaging 10% below

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their 2021 levels during 2022-2024.

Global overview

Electricity Market Report – January 2022

Improving supply availability is expected to ease gas and coal prices in the medium term
Fuel costs of coal- and gas-fired power plants including emission costs, 2018-2024

Japan and Korea

European Union
300

90

250

80
70

200

60

150

50
40

100

10

30
20

50

Coal

Gas

Coal

10

Gas

Historical

0

2024

2023

Outlook

2022

2021

2024

0

2020

Historical

2019

Outlook
2023

2021

2020

2018

0

2019

Historical

2022

5

Coal

Outlook
2024

15

2023

20

2022

25

2021

30

2020

35

2019

40

100

2018

45

2018

Fuel costs (USD/MWhel)

United States

Gas

Notes: Coal range reflects 33-45% efficiency; gas range reflects 43-55% efficiency. Due to the large geographic areas covered in each region, costs can differ between and even withincountries and should therefore be interpreted as general trends. United States: natural gas prices increased significantly (exceeding USD 15/MBtu) in February 2021 due to constraint
supply. The y-axis is cut to increase the clarity of the long-term trend.
Sources: United States: based on EIA (2021), STEO December 2021, price trends beyond 2021 for natural gas based on Henry Hub and for coal based on Appalachian coal.
European Union: natural gas prices TTF; coal prices CIF ARA; emission costs EU ETS. Japan and Korea: natural gas prices are oil-indexed LNG prices; coal prices are Japan marker
prices. Latest update: 5 January 2022.
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Global overview

Electricity Market Report – January 2022

Demand growth and tight coal supply led to power shortages in China and India
Responding to the exceptionally rapid global economic recovery,
industrial electricity demand grew strongly in both economies. For
example, it grew by 12% during the first three quarters of 2021 in
China. The industrial sector represents 60% of China’s electricity

The first half of 2021 saw multiple electricity security events,
including the Texas power crisis in February, supply shortages inJapan and China, and large-scale outages in Pakistan and Chinese
Taipei. Subsequently, Lebanon suffered a complete blackout inearly October 2021 due to a diesel supply shortage for the country’s
thermal power plants, after having suffered reduced power
availability for several months.

demand and almost 40% of India’s.
China experienced higher summer temperatures than usual,particularly in September, when the monthly cooling degree days
exceeded average values for 2010-2020 by 30%. Increased coolingdemand added pressure to an already stressed system.

China and India were both subject to electricity supply shortages in
September and October of 2021, mainly affecting industrial
consumers. The principal factors behind these shortages wererapidly growing demand and interruptions to coal supply, both
domestic and international. Industrial consumption in China wasfurther affected by power cuts initiated to meet the government’s“dual control” targets that limit the emissions intensity and energy
intensity of GDP at the province level, and by the economic losses
incurred by coal generators due to high fuel prices in combination
with electricity price limits. Towards the end of 2021, supply issues

In total, electricity demand in both countries grew by about 10% in
2021, reaching historical monthly demand peaks in July (China) andAugust (India).
Coal markets tightened domestically and globally
China has seen a surge in businesses purchasing diesel
generators, seeking alternatives to provide the missing electricity. In
India some distribution companies and industrial consumers, which
had already contracted to buy power directly from generators thatthen shut down due to lack of coal stocks, resorted to buying
electricity on the power exchange instead, at peak prices that
introduced further financial stress. Additionally, since coal supply
has been prioritised for power plants, industrial coal consumers

in both countries eased.
Strong economic recovery and high temperatures boosted
demandElectricity demand in China and India increased significantly in 2021
as their economies recovered from the Covid-19 pandemic. It was

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have faced further limited supply and increased prices.

further amplified by high summer temperatures.

Global overview

Electricity Market Report – January 2022

Power cuts mainly affected industrial demand

The tightness on coal markets has strongly affected both China andIndia, which as of 2020 relied on coal for more than 60% and morethan 70% of their electricity generation respectively. Domestic coalproduction was affected by the rainy season in 2021, when heavy
rain in coal-producing provinces like Shanxi in China and aparticularly heavy monsoon period in India affected both theoperation of local mines and the transport of coal to power plants.
Domestic production in China has been further affected by earlier

Due to the fuel shortages, power supply did not match the steep
demand growth, leading to supply interruptions in China and India in
September and October.
Industrial consumers faced rolling blackouts in several provinces
and states of both countries. In China’s northeast, the province of
Liaoning issued a level two shortage alert on several consecutive
days, indicating power shortage equivalent to 10-20% of total
demand. Similar shortages were registered in southern Guangdong,mine closures.
Global factors have exacerbated the situation. High gas prices
internationally have caused gas-to-coal switching in several power
markets around the globe, pushing up coal demand and prices inthe second half of 2021. Additionally, meteorological events such as
floods in Indonesia have limited the availability of coal imports.
Together, high coal prices and limited imports increased thedependency on local coal sources.

China’s second-largest province by electricity consumption. While
supply to residential consumers was prioritised, in certain provinces
such as Liaoning, shortages affected residential consumers as well.
In India, Punjab experienced rolling blackouts of up to nine hours at
a time due to the shutdown of three power plants from a lack of fuel.
The state of Rajasthan was forced to introduce load shedding forindustrial and residential consumers even in urban areas like Jaipur
and Jodhpur, with some remote areas undergoing up to 12 hours of
supply disruption. Bihar experienced power cuts of more than
10 hours per day. Other states such as Gujarat, Tamil Nadu andAdditionally, coal stocks at power plants were not adequately built
up before the monsoon season in India. This resulted in extremely
low stocks, with more than 80% of India’s coal-fired power plants
reaching critical levels in October, with less than a week of coalHigh fuel prices, combined with regulated tariffs for power, led
several Chinese power plants to stop operations, as electricity

The supply shortage in India registered as a Category 3 event on
the IEA Electricity Security Event Scale (ESES), which is based on
the share of customers affected multiplied by the duration of the

production was no longer profitable.

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Karnataka have also been threatened by load shedding due toinsufficient generation from thermal power plants.

supply remaining.

Global overview

Electricity Market Report – January 2022

the supply shortage, and rated as Category 4.

Electricity Security Event Scale ratings for 2021 electricity
shortage events

Rapid responses by authorities

100

event. India’s Northern Region was the most severely affected by

To alleviate shortages and stabilise power supply, in the second halfof October the Chinese government authorised several previously
closed coal mines to reopen and new mines to start production. It
also increased coal production targets, capped coal prices andallowed greater fluctuations in wholesale electricity prices.
Previously prices for coal-fired electricity were allowed neither torise above 10% nor drop below 15% of the regional base price; thiscap has been extended to 20% in both directions since midOctober, and has been completely removed for energy-intensive
consumers.

Category 5>24
Category 4
10 - 24

ESES rating

10

Category 3
1 - 101Category 2
0.1 - 1
0.1

Measures taken in India include: the prioritisation of coal supply for
power plants over other industrial producers; publication ofguidelines for efficient operation of power plants; diverting the
production of coal from captive mines; establishment of a CoreManagement Team to ensure efficient management of coal stocks
and their distribution; the blending of local and imported coal; andCategory 1
< 0.1
0.01
Chinese Taipei

India

Texas

India (Northern Region)
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government appeals to reduce the use of electricity.

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Notes: ESES rating is based on the share of customers affected in the named region
multiplied by the duration of the event. Recent supply disruptions in China are notincluded due to a lack of detailed data.
Sources: IEA analysis based on CPPA Power Purchase Price Forecast; EIA Open
Data; POSOCO; Reuters; South China Morning Post.

Global overview

Electricity Market Report – January 2022

In October 2021, 80% of India’s coal-fired plants were facing critical coal storage levels

50

100%

45

90%

40

80%

35

70%

30

60%

25

50%

20

40%

15

30%

10

20%

5

10%

0
12-2018

04-2019

09-2019

01-2020

06-2020

11-2020

03-202108-20210%

Share of plants with critical/supercriticalstocksAverage remaining coal stocks (days)

Coal stock availability at power plants in India, December 2018-November 2021

Month
Remaining coal stocks

Share of plants
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PAGE | 24

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Notes: We used the Central Electricity Authority definition to categorise the status of coal plant stocks: for pithead plants, critical is < 5 days of coal requirement, supercritical is< 3 days; for non-pithead plants, critical is < 7 days, supercritical is < 4 days; for non-pithead plants located more than 1 500 km from linked coal mine, critical is < 9 days, supercriticalis < 5 days. Daily coal requirement is based on the higher of the requirement for the average actual consumption of the plant in the last 7 days, and the requirement for the installedcapacity of the plant at 55% load factor.
Source: IEA analysis based on CEA, Daily Coal Report.

Global overview

Electricity Market Report – January 2022

High gas prices in 2021 caused fuel switching from gas to coal in the United States and Europe
Coal-fired power declined during 2017-2020 in the United States(down 36%) and Europe (down 38%) due to emissions reduction
measures, more renewables and a growing cost advantage of gas
over coal. In 2021 the relative increase in gas prices versus coal led
to a reversal in coal’s decline, many markets experiencing fuelswitching and consequently higher emissions. We estimate that US
coal-fired generation grew by 19% and Europe’s by 11% comparedwith 2020, while US gas-fired generation fell by 3% and Europe’s
grew mildly (up 4%). Although we expect this to be temporary andcoal generation to fall again in the coming years as gas prices
moderate, the special circumstances in 2021 offer a good
opportunity to analyse generation flexibility. The ability to switch
between fuels can be an indicator of the resilience of a system.

Our analysis shows price changes having significant effects in all
regions and years. Based on a linear regression analysis, weestimated percentage point reductions in the gas share for a
USD 1/MWh increase in the relative cost of gas-fired generation.
In Germany, the estimated drop in the gas-fired share of generation
is 0.5 percentage points for every USD 1/MWh increase in therelative cost of gas, in the range where gas was between
USD 25/MWh cheaper and USD 50/MWh more expensive thancoal-fired generation. Above this range, the impact was lesspronounced, potentially due to must-run generation by industrial
power plants or heat production obligations of gas-fired cogeneration plants.
In the Netherlands, the gas-fired share varied between 29% andWe compared the share of gas in combined gas and coal
generation with the difference in generation cost, subtracting thecoal generation cost from that of gas so that the cost difference
reflects how much more expensive gas is than coal (or cheaper, if
negative). Our focus is on four regions with relevant amounts ofboth coal- and gas-fired generation: the Midwest and Mid-Atlantic
regions of the United States, and Germany and the Netherlands in
Europe. Using weekly data for both US markets and daily data forthe others, we analysed the years 2019-2021, capturing a wide
range of gas prices, with low (in 2020), high (in 2021) and mid-

100% of combined gas and coal generation. The estimated drop in
the gas share is 0.8 percentage points for every USD 1/MWh
increase in the relative cost of gas in the range where gas was
between USD 25/MWh cheaper and USD 50/MWh more expensive.
For higher relative gas costs, the gas share dropped less.

range values (in 2019).

(Midwest) and 1.3 percentage points (Mid-Atlantic).
PAGE | 25

IEA. All rights reserved.

Cost differences between gas and coal generation in the UnitedStates are smaller than in Europe and the effect of a cost change
appears to be higher. A USD 1/MWh increase in the relative cost ofgas saw the gas share drop on average by 0.7 percentage points

Global overview

Electricity Market Report – January 2022

The split between gas- and coal-fired generation in Germany, the Netherlands and two US
markets shows a strong correlation with the generation cost differential

2019

80%

2020

60%

2021

40%
20%
0%

-50

0
50
100
150
Gas minus coal generation costs (USD/MWh)200

US Midwest

100%

2019

80%

2020

60%

2021

40%
20%
0%

-10

0
10
20
Gas minus coal generation costs (USD/MWh)30

Gas share in the gas andcoal generation mix

Germany100%

Gas share in the gas andcoal generation mix

Gas share in the gas andcoal generation mix

Gas share in the gas andcoal generation mix

Gas share of combined gas and coal generation relative to the generation cost difference (gas minus coal), 2019-2021
Netherlands

100%

2019

80%

2020

60%

2021

40%
20%
0%

-50

0
50
100
150
Gas minus coal generation costs (USD/MWh)200

US Mid-Atlantic

100%

2019

80%

2020

60%

2021

40%
20%
0%

-10

0
10
20
Gas minus coal generation costs (USD/MWh)30

Notes: The gas to coal power generation cost difference is calculated for every date available by subtracting the coal-fired electricity generation cost from the gas-fired cost, including
the associated carbon costs for each fuel (where appropriate). For the conversion of thermal energy to electricity, we assume an efficiency of 42% for coal-fired generators and 50% forgas. The analysis was made with data from between 1 January 2019 and 8 October 2021.
Sources: Natural gas prices: TTF (for Germany and the Netherlands), Chicago Citygate gas hub (for US Midwest), TETCO-M3 gas hub (for US Mid-Atlantic); coal prices: CIF ARA (forGermany and the Netherlands), US Illinois (for US Midwest), US Northern Appalachia (for US Mid-Atlantic); emission costs: EU ETS; power generation data: ENTSO-E (2021),
Transparency Platform, and EIA (2021), Open Data.
PAGE | 26

IEA. All rights reserved.

IEA. All rights reserved.

Global overview

Electricity Market Report – January 2022

PAGE | 27

IEA. All rights reserved.

Wholesale prices

Global overview

Electricity Market Report – January 2022

Wholesale electricity prices continued to rise in 2021…
Soaring gas and coal prices were the main driver for the rapid risein wholesale electricity prices in many countries in 2021. Our priceindex for major wholesale electricity markets of major advanced
economies almost doubled compared with 2020 (up 64% from the
2016-2020 average).

After a supply shortage-related peak in the first quarter and asubsequent drop in the second quarter of 2021, Japan’s wholesale
prices rose again in the second half of 2021. Average fourth quarter

Wholesale prices in the fourth quarter of 2021 in France, Germany,
Spain and the United Kingdom were three to more than four times
higher than the fourth quarter 2016-2020 average. This was mainly
caused by the steep rise in gas prices, alongside increased

resulted in a substantial year-on-year wholesale price increase of
174% in the second quarter of 2021 (up 196% from the previous
quarter). This was followed, in contrast to the other countries andregions analysed, by a price decrease of 50% from the second to
the fourth quarter of 2021. The decline was supported by milder
weather and increased availability of renewable energy and2021 prices exceeded the 2016-2020 average by 80%.
In Australia, coal-fired generation outages and increased demand

demand, and EU ETS prices more than doubling in 2021 comparedwith 2020.

dispatchable generation.

The Nordic region also saw a surge, wholesale prices rising in theWestern Europe.
Wholesale prices grew less strongly in the United States than inEurope, partly due to a smaller increase of natural gas prices.
Average prices in the fourth quarter of 2021 were almost 75%
above the fourth quarter average of 2016-2020.

PAGE | 28

IEA. All rights reserved.

The share of total generation traded in India via short-term power
exchanges has increased considerably in recent years. However, at
6-7% of supply it is still significantly smaller than in more mature
markets such as Europe. In the second half of 2021 prices grew by
70% year-on-year. The main cause was a coal supply shortage, as
80% of coal-fired power plants had less than one week of fuelstocks by mid-October. The need to cover the deficit in coal-fired
power led to an increase in spot exchange volumes, which rosealmost 50% in the August-October period compared with theprevious three months.

fourth quarter of 2021 almost three times compared with the fourth
quarter average of 2016-2020, and over seven times higher than
the same period in 2020. However, average prices of EUR 96/MWhin the fourth quarter of 2021 were only about half as high as inGlobal overview

Electricity Market Report – January 2022

Indexed electricity price (Q1 2016 = 100)… and in many markets significantly exceeded levels in previous years
Quarterly average wholesale prices for selected regions, 2016-2021

800
700

Peak caused by supply disruptions due to an extreme
weather event, increasing average regional prices in
ERCOT to over USD 600/MWh and in SPP to overUSD 250/MWh

600
500
400

Peak caused by a surge in demand due to an extreme cold
weather event and low gas-fired generation in Japan

300
200
100
0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016
Germany
Japan

2017
FranceAustralia

2018

2019
United Kingdom
Nord Pool

2020
Spain
India

2021
United States
Price index

Notes: Price index aggregates the wholesale electricity price changes across the depicted regions. It is calculated as the demand-weighted rolling average of the respective current
and previous three-quarter indexed prices of the depicted wholesale electricity markets. The prices for Australia and the United States are calculated as the demand-weighted averageof all the regional markets.
Sources: IEA analysis using data from RTE (France) and Red Eléctrica (Spain) – both accessed via the ENTSO-E Transparency Platform; Bundesnetzagentur (2021), SMARD.de;
Elexon (2021), Electricity data summary; AEMO (2021), Aggregated price and demand data; AER (2021), Wholesale statistics; EIA (2022), Short-Term Energy Outlook January 2022;
Nordpool (2021), Historical Market Data; IEX (2021), Area Prices. Latest update: 12 January 2022.
PAGE | 29

IEA. All rights reserved.

IEA. All rights reserved.

Global overview

Electricity Market Report – January 2022

PAGE | 30

IEA. All rights reserved.

Climate protection policies andimpactGlobal overview

Electricity Market Report – January 2022

The decarbonisation of the electricity sector is a central component of current climate policies
Governments are increasingly focused on tackling the threat ofclimate change, making climate policies an important element
shaping the electricity sector in the short, medium and long term.

in 2020, such as peaking emissions before 2030 and achievingcarbon neutrality before 2060, while the target to reduce emissions
intensity per unit of GDP by 2030 increased from 60-65% to over
65% below the 2005 level.

One important indication of the direction set out by climate policy iseach country’s nationally determined contribution (NDC) under theParis Agreement. These lay out national targets and policies forgreenhouse gas (GHG) mitigation, and are submitted every
five years, most mitigation targets reported in current NDCs having
a 10-year time horizon. Some NDCs include components that areconditional on receiving international technical, financial andcapacity-building support. In certain cases, domestic policies are
more ambitious than policies reflected in the first round of NDCs
submitted by countries since 2015, while in others domestic policies

The electricity sector is a central component of all NDCs. As
indicated by the 2021 NDC Synthesis report of the United Nations
Framework Convention on Climate Change (UNFCCC), by
12 October 2021 all the 165 latest available NDCs – representing
192 Parties – cover the electricity sector, including 116 new or
updated NDCs. These NDCs covered 94% of total global GHG
emissions in 2019. Of all NDCs, 86% mention targets for higher
shares of renewable energy generation by 2030.
The electricity sector is also a key component of long-term
decarbonisation goals, as seen in the long-term low GHG emission
development strategies (LT-LEDS), which Parties are encouraged
to submit under the Paris Agreement, as well as in domestic net

appear insufficient to fulfil NDC targets.
New NDCs submitted as of 24 November 2021 include more
ambitious GHG reduction objectives from countries such as theUnited States (target of 50-52% by 2030, vs 26-28% by 2025
previously, below 2005 levels), Japan (upgraded target of 46%
below 2013 levels in 2030, vs 26% previously) and South Africa(target to keep emissions in the range of 350-420 Mt CO2-eq by
2030, vs 398-614 Mt CO2-eq previously). China also submitted an
updated NDC, reflecting new climate mitigation targets announced

zero legislation. Long-term strategies aim to generate certainty forinvestment in mitigation, including in the electricity sector. As of
24 November 2021, 45 countries and the European Union have

PAGE | 31

IEA. All rights reserved.

communicated LT-LEDS to the UNFCCC, covering over 65% of
global energy-related CO2 emissions in 2019. Moreover,
18 countries and the European Union have legislated to achieve aGlobal overview

Electricity Market Report – January 2022

180

8

160

7

140

6

120

5

100

4

80

3

60

2

40

1

20

0

0

NZE
In law

decarbonise their economies and electricity sectors in line with both
medium- and long-term climate ambitions. These include specificplans to phase out unabated coal at different target dates, some inthe short term (e.g. France by 2022) and others in the longer term(e.g. Germany by 2038 at the latest and Chile by 2040). They also
include a range of carbon pricing measures. However, even if
implemented in full, they would still be insufficient to align with the
1.5°C Paris Agreement goal.

9

NZE

Governments are deploying a suite of policy measures to200

LT-LEDSby 2035) and Germany (by 2045).

10

Latest NDCs

All these commitments also cover the electricity sector. Withinoverall net zero targets, some countries announced that theirelectricity sector will be net zero before or in 2030, such as Norway(already net zero), Denmark (by 2027) and Austria (by 2030). Latertarget dates have been set by the United States, New Zealand (bothGlobalemissionsElectricity sector emissions (Gt CO2)

global energy-related CO2 emissions in 2019.

Number of countries

Electricity sector CO2 emissions covered by different climate
commitments and number of countries with electricity targets

net zero emissions target by 2050 or earlier, covering over 15% of

Total
Others
Oil
Gas
Coal
Number ofcountries with a
specific target

Emissions covered bycommitments
IEA. All rights reserved.

PAGE | 32

IEA. All rights reserved.

Notes: Emissions are CO2 emissions from fuel combustion for electricity as a main
activity and auto-producer electricity plants only. NZE = net zero emission targets thatare set in law, in proposed legislation, in a policy document and in oral pledges. NDCs
= nationally determined contributions. LT-LEDS = long-term low GHG emission
development strategies.

Global overview

Electricity Market Report – January 2022

New carbon pricing mechanisms have been introduced in 2021
Carbon pricing is often part of a suite of climate policies targetingclean energy transitions. It comprises carbon taxes, an emissions
trading system (ETS), or hybrids of the two.

shocks, and more targeted carbon leakage rules. They also notably
proposed a carbon border adjustment mechanism (CBAM), which
would subject high-carbon imports, including electricity, to a bordertax. This, combined with several other factors, saw EU ETS
allowance prices soar to at times levels above 80 EUR/t CO2 in the
fourth quarter of 2021, reaching record highs.

By the end of 2021 there were 65 carbon pricing instruments inplace, of which six new ones, all covering the electricity sector, wereintroduced during the year. Particularly notable was the launch of
China’s national ETS, which is the largest CO2 emissions trading
scheme in the world. It initially covers China’s coal- and gas-fired
power plants, representing 4.5 Gt CO2 or around 40% of China’s
energy sector CO2 emissions in 2020. It is scheduled to expand toseven additional sectors over the next five years. Coal- and gasfired power plants receive allowances based on their generation
output and predetermined benchmarks, which encourages them toreduce their emissions intensity below their benchmark, for example
by improving their efficiency. However, the ETS currently does not
set a cap on total emissions, which could rise in absolute terms.
Allowances are currently allocated for free, and have been traded at

In early 2021 the United Kingdom, after leaving the EU ETS,
launched its emissions trading scheme, covering the power,
industry and aviation sectors. It features a “transitional auction
reserve price” set at GBP 22/t CO2, which functions as an allowance
price floor, and has an emissions cap declining each year. As of theend of the fourth quarter of 2021, UK allowances traded at apremium relative to the EU ETS.
The third phase of the Korea ETS began in 2021, with importantreforms. It covers six sectors, including heat and power. The
government introduced a temporary minimum price of

In 2021 the European Union put forward a wide range of reforms to
its EU ETS as part of its Fit for 55 package, to align with the new2030 EU emissions target. Reform proposals include a moreaggressive decline of the emissions cap, reinforcement of themarket stability reserve to strengthen resilience to future exogenous

In 2021 various governments took initial steps to introduce carbon
pricing instruments in their electricity sector. Ukraine announced its
intention to launch an ETS in 2025, aiming to link it with the EU ETS
in the future. Indonesia operated a voluntary emissions trading trial
PAGE | 33

IEA. All rights reserved.

KRW 12 900/t CO2 (around USD 11/t CO2) on the secondary market
to counteract a decline in allowance prices in 2020 and 2021 due toa surplus of allowances.

around CNY 40-60/t CO2 (around USD 8/t CO2) as of October 2021.

Global overview

Electricity Market Report – January 2022

Price of selected carbon pricing instruments covering the power
sector (as of April 2021, average levels)
Carbon price (USD/tCO₂-eq)

in its power sector from March to August 2021, and is considering anational framework for carbon pricing, potentially including an ETS
alongside a carbon tax set to start in 2022. Brazil is in the processof defining mechanisms to integrate environmental benefits in theelectric sector, as well as regulating the carbon trading market.
International carbon markets also received a boost in 2021 withagreement at COP26 on the framework rules for implementing
Article 6 of the Paris Agreement. Article 6 covers accounting forbilateral exchange of units between countries, as well as acentralised carbon market mechanism under the UNFCCC. The
latter would be a successor to the mechanism of the Kyoto Protocol,
in which the electricity sector (and renewable energy in particular)
was the sector that issued the most credits. It is likely that lowcarbon options in the electricity sector will continue to be an

70
60
50

2020

40

2021

30
20

ETS

British Columbia

South Africa

SingaporeJapan

Colombia

Chile

QuébecRGGI

California

United Kingdom*

Switzerland

New Zealand

Korea

0

European Union

important component of future international carbon markets.

China*

10

Carbon tax
IEA. All rights reserved.

PAGE | 34

IEA. All rights reserved.

* China ETS and UK ETS were launched in 2021; their depicted prices are the resultsof the first auction for each scheme. All other prices are the average price over theyear.
Note: RGGI = Regional Greenhouse Gas Initiative (United States).
Sources: World Bank Carbon Pricing Dashboard, ICAP.

Global overview

Electricity Market Report – January 2022

Commitments to end the use of unabated coal are piling up
most relevant for coal power is to scale up technologies and policies
to transition away from unabated coal power generation in the2030s in major economies (or as soon as possible thereafter) and in

Coal phase-out commitments have mushroomed across the world inrecent years. Between the Paris Agreement entering into force in2016 and the end of 2021, 21 countries using unabated coal forelectricity generation had set phase-out dates before 2040. Four ofthese have already completed their phase-outs: Belgium (2016),
Austria (2020), Sweden (2020) and Portugal (2021). Of the
17 remaining countries, 12 are from the European Union and theothers are Canada, Chile, Israel, the United Kingdom and New
Zealand. However, these countries accounted for only 3% of global
coal power generation in 2021, and almost half of that came fromthe 2040s globally (or as soon as possible thereafter). The
signatories included 23 countries without any pre-existing phase-out
commitment, among them major coal users like Indonesia, thePhilippines, Poland, South Korea, and Viet Nam. In total, the signing
parties accounted for 12% of global coal-fired electricity in 2021.

Germany (phase-out if possible by 2030, at the latest by 2038).
The Powering Past Coal Alliance is a coalition established by
Canada and the United Kingdom to accelerate the transition awayfrom coal for power generation. As of December 2021, 48 national
governments, representing close to 4% of estimated global coalfired generation in 2021, 48 subnational governments and
69 organisations have joined.

Although many of these commitments have a target year beyond
our forecasting period, which ends in 2024, many regions are
already showing a decreasing trend in coal-fired generation. In theEuropean Union, due to a mix of phase-out policies and carbon
pricing, coal-fired electricity halved between 2015 and 2020.
Despite the increase in 2021, we expect a further drop to 40% of2015 levels in the European Union by 2024. For Canada, weforecast coal use for power to drop by more than 80% during thattime. In the United Kingdom, we anticipate coal to drop below 1% in
the generation mix in 2024, down from more than 20% in 2015.

During the UN Climate Change Conference COP26 in Glasgow inNovember 2021, a coalition of 45 countries plus the European
Union, 5 subnational governments and 26 organisations signed a
Global Coal to Clean Power Transition Statement, acknowledging
coal power generation as the single biggest contributor to climatechange. The statement includes four commitments, of which the
PAGE | 35

IEA. All rights reserved.

In the lead-up to COP26, China, Japan, Korea and the G20
committed to end the provision of international public finance for
new unabated coal power generation abroad by the end of 2021.
Additionally, several banks and financial institutions madecommitments at COP26 to end financing of unabated coal.

Global overview

Electricity Market Report – January 2022

Countries comprising almost 12% of global coal-fired generation have committed to phase-outs

Share of global coal-fired electricity
generation in 2021

Global coal-fired generation share with phase-out commitments
12%

Other Global Coal to Clean Power
Transition Statement countries
Other Powering Past Coal Alliancecountries
Other countries with fixed coalphase-out datePhilippines

10%
8%

Kazakhstan
6%

Viet Nam
Poland4%

Indonesia
2%
0%

Korea
GermanyCountries with fixed
coal phase-out dates

Member countries of thePowering Past Coal AllianceCountries who signed the
Global Coal to Clean
Power Transition Statement
IEA. All rights reserved.

PAGE | 36

IEA. All rights reserved.

Notes: Shares are based on estimated coal-fired generation in 2021. All countries with a share of at least 0.5% of global coal-fired electricity generation are shown individually. As theEuropean Union signed the Global Coal to Clean Power Transition statement, we included all member countries, even if not all of them signed the statement individually. Last update:November 2021.

Global overview

Electricity Market Report – January 2022

Climate change is a growing threat to electricity systems
The world’s electricity markets are experiencing the growing
impacts of climate change. Extreme weather events such as
heatwaves, cold snaps, droughts and floods have become more
frequent and intense, threatening the stability and reliability ofelectricity supply.

measures in September to conserve power due to near-record low
water levels at crucial dams. California was forced to shut down a
750 MW hydroelectric power plant at Lake Oroville in August for the
first time due to low water levels. Iran suffered from power outages
due to droughts and high electricity demand in July.

Texas in the United States experienced two major electricity crises

Extreme weather events are likely to be more frequent in the future
due to climate change, although the impacts may vary between
countries. The IPCC Working Group I report projects an increase in
the frequency and intensity of extreme heat, heavy precipitation anddroughts in some regions, as well as a growing prevalence ofin 2021 due to extreme temperatures. Exceptionally cold weather in
February reduced gas supplies and the availability of gas-fired andother power plants, and lifted electricity demand to 20% above theexpected winter peak, causing an electricity outage for four days.
Four months later, Texas faced a heatwave bringing further supply
problems. The Texas power grid authority had to call for demand
response measures like raising thermostat set-point temperaturesintense tropical cyclones.
Since climate change is expected to raise these risks, building theclimate resilience of electricity markets becomes increasingly
important. Climate-resilient electricity systems support the clean
energy transition by: addressing the adverse impacts of climatechange on renewable energy; promoting sustainable development
by ensuring reliable energy services; boosting electricity security byincreasing systems’ ability to cope with climate-driven disruption;and reducing the risks associated with climate disasters.

and avoiding the use of large appliances to ease grid strain.
Extreme patterns of precipitation pose an increasing threat toelectricity markets. In July, heavy rainfall caused the worst flooding
in decades in Germany, cut electricity to 200 000 households, anddamaged the energy infrastructure in the west of the country. Heavy
rains and mudslides in northern China hit a major coal production
centre in October, complicating efforts to tackle power shortages in
the country.
While some countries suffered from intense rainfall, others
experienced the opposite. Brazil called for demand responsewith its policy preparedness.
PAGE | 37

IEA. All rights reserved.

In June 2021 the IEA released the Climate Resilience Policy
Indicator, an initial measure to assess the level of climate resilienceof each country by comparing the level of climate hazard it faces

Global overview

Electricity Market Report – January 2022

The risk of climate hazards varies significantly between countries

Level

Aggregated level of climate hazard for IEA member and association countries
7

Drought

6

Cyclone

5

Flood

4

Temperature

3
2
1
India
MexicoChina

Australia
Hungary
Indonesia
South Africa
Thailand
United States
BrazilJapan
Korea

Austria
Czech Republic
Estonia
Germany
GreeceMoroccoPolandPortugal
Slovak Republic
Spain
Switzerland
TurkeyBelgium
CanadaDenmark
FinlandFrance
Italy
Netherlands
New ZealandSwedenIreland
Luxembourg
NorwaySingapore
United Kingdom

0

High

Medium-High

Medium-Low

Low
IEA. All rights reserved.

PAGE | 38

IEA. All rights reserved.

Notes: The overall assessment of climate hazard for each country is based on the aggregation of the levels in four areas (temperature, flood, drought and cyclone). Temperature refers
to long-term changes in average temperatures. For each country, the average surface temperature for the period 2000-2020 is extracted from the Weather for Energy Tracker, while
the level of climate hazard is assessed based on the indicators “Physical exposure to flood”, “Drought probability and historical impact” and “Physical exposure to tropical cyclone”
developed by the INFORM Risk Index. If the hazard level for each area is low, it scores 0; if medium, it scores 1; if high, it scores 2. If the sum of the scores for the four climate risks is
below 2, the overall assessment of climate hazard is described as low; between 2 and 4 it is medium-low; between 4 and 6 it is medium-high; and from 6 it is high. A detailed
methodology of the indicator is described on the Climate Resilience Policy Indicator page.
Source: IEA (2021), Climate Resilience Policy Indicator.

Regional perspective

Electricity Market Report – January 2022

PAGE | 39

IEA. All rights reserved.

Regional perspective

Regional perspective

Electricity Market Report – January 2022

PAGE | 40

IEA. All rights reserved.

Asia PacificRegional perspective

Electricity Market Report – January 2022

Demand is growing faster than renewables – but the gap is closing
Despite the economic slowdown caused by the Covid-19 pandemic
reducing electricity demand growth, the Asia Pacific region
nonetheless maintained positive yearly growth rates during 2019and 2020. In 2021 we estimate demand to have grown by 8% froma low of 2% in 2020, mostly driven by China and India (both uparound 10%), the largest power systems in the region.

is again led by China and India, but is also seen in most countries of
the region and is expected to continue, reflecting ongoing
renewables deployment across the region.
With slower electricity demand growth out to 2024 (on average 4%
per year between 2022 and 2024), around two thirds of the net
demand increase in the region is forecast to be covered byrenewables, followed by coal (covering 27% of demand growth) andnuclear (7%).

After the rebound in 2021, most countries in the region (with the
exception of Japan) are expected to see continued demand growth
up to 2024, with the regional growth rate stabilising at around 4%

Power grids in the Asia Pacific region are on average the mostcarbon intensive in the world, due to their reliance on fossil fuels
and particularly coal. With an estimated CO2 intensity of over
580 g CO2/kWh in 2021, the region is 28% above the world averageof about 460 g CO2/kWh. While the expansion of renewable energy
generation in the period to 2024 means the region’s carbon intensity
is expected to steadily decline at a pace close to the world’s
average, this reduction is not sufficient to prevent an increase in

per year on average, slightly below pre-pandemic levels but above
the global average of below 3%.
Across the region, electricity demand growth is being driven by bothindustrial development and increased utilisation and electrification ofcooling, cooking and mobility, among other end uses.
On the supply side, 2021 saw a large increase in coal-fired
generation, which grew by 8% to reach over 8 000 TWh. This
increase was led by significant growth in coal-fired generation inboth China and India in line with economic recovery from thetotal emissions over the period. By 2024 we expect the averagecarbon intensity of generation in Asia Pacific to fall to approximately
550 g CO2/kWh.

pandemic, despite coal shortages late in 2021.

PAGE | 41

IEA. All rights reserved.

Although coal-fired generation grew the most in absolute terms in
2021, renewables saw the highest growth rate (up 10%). This trend

Regional perspective

Electricity Market Report – January 2022

Asia Pacific’s electricity demand growth stabilises after a rebound in 2021
Electricity demand growth

Development of electricity demand, 2015-2024
12%
10%
8%
6%
4%
2%
0%

Asia Pacific

China

India

Japan
DemandKorea

Australia

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

-4%

2015

-2%

Southeast Asia

Demand forecast
IEA. All rights reserved.

PAGE | 42

IEA. All rights reserved.

Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

Renewables meet a large share of new demand, causing emissions intensity to decline, but
total emissions still grow
Development of emissions intensity, 2015-2024
CO₂ intensity (g CO₂/kWh)

1 200
1 000
800
600
400

800
700
600
500

300

0

2024

2023

2022

2021

2020

2019

2018

2017

200

2016

- 200

900

400

200

2015

Change in electricity generation (TWh)Change in electricity generation, 2015-2024

100

Asia Pacific
Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change

0
2015

2017
Asia Pacific
India
Korea
Southeast Asia

2019

2021

2023

China
Japan
Australia

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.
PAGE | 43

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IEA. All rights reserved.

Regional perspective

Electricity Market Report – January 2022

China
The industrial and commercial demand for power in China
recovered strongly from the Covid-19 pandemic in 2021. Growthacross all demand sectors is expected to resume pre-pandemic
trends during 2021-2024 – slowing positive growth year-on-year.
The only exception is road transport; as electrification accelerates tomeet China's goal to end the sale of new internal combustion
engine passenger cars by 2035, electricity demand for roadtransport grows significantly out to 2024, although starting from a
relatively low base.

deployment of these variable renewable energy sources, China
announced an ambitious target to install more than 30 GW of new
non-hydro energy storage capacity by 2025, up from 3.3 GW in
2020.
Although coal consumption will be limited under the 14th five-yearplan for 2021-2025, and despite the coal supply shortages inautumn 2021, new coal-fired units will continue to be built. Neither
the coal shortages nor the national emissions trading scheme
launched on 16 July 2021, where the price range is CNY 4060/t CO2 (around USD 8/t CO2), are expected to contributesignificantly to switching away from coal generation.

Despite a diversifying generation mix, China's electricity systemremains largely coal-dominated. In 2021 coal made up 64% of
power generation, followed by hydropower with a share of 16%,wind at 7% and nuclear at 5%. By 2024 we expect the share of coalin the mix to decline to 59%. Renewable energy sources are set tomeet the majority of additional demand during 2022-2024 (over70%), while coal meets 25% of the increment.

Gas units are also set to play a greater role in providing system
flexibility and compensating for the variability of wind and solar
generation. Therefore, the share of electricity from non-fossil
sources is expected to increase only a couple of percentage points
over the forecast horizon. Once policies follow through on the

The power sector reforms initiated in 2015 introduced wholesalemarkets based on marginal pricing and incentivise cross-provincial
power trade. Recent national initiatives are expected to further curb
the need for new fossil-based power capacity.
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IEA. All rights reserved.

national pledge to be carbon-neutral by 2060, faster change in thegeneration mix might be achieved.

Generation capacity continues to increase in China to satisfy
growing demand for electricity. Despite the phase-out of central
government subsidies for onshore wind and solar PV, bothtechnologies continue to be deployed at a rapid pace and are
expected to reach a cumulative capacity of more than 930 GW by2024, up from close to 530 GW in 2020. To accompany theRegional perspective

Electricity Market Report – January 2022

Electricity generation mix in China, 2015-2024
Generation mix

Electricity tariffs in China remain largely regulated. On-grid tariffs forindustrial and commercial consumers of electricity from coal-fired
generation contain a variable part that floats with the coal price.
Initially, the variable element was neither allowed to rise above 10%
nor drop below 15% of the regional base price. Following the coalprice surges during summer 2021, this resulted in net losses forcoal power plants. In October the authorities decided to allow thevariable part of the tariff to float up to 20% above the pricebenchmark (up from 10%). China is also looking into implementing
time-of-use tariffs for most retail consumers to shift demand awayfrom peak times and limit the need for additional capacity, although

100%
90%
80%
70%
60%
50%
40%

the timeline for this development has not yet been announced.

30%

Since September 2021 the two grid operators in China, State Grid
Corporation of China and China Southern Power Grid, have been

20%

piloting green electricity trading in response to demand for clean
electricity from corporations. Under this scheme, corporations bid anenergy price and a “green premium” on the power exchanges, andestablish direct contracts with renewable producers 1 month to
10 years ahead of delivery. The contracted renewable units are thengiven priority dispatch.

10%

Other non-renewables

2024

2023

2022

2021

2020

Gas

2019

Coal

2018

2017

Nuclear

2016

2015

0%

Renewables

IEA. All rights reserved.

PAGE | 45

IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy
sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

Continued demand growth in China is supported by a slowly changing electricity mix
Change in electricity generation (TWh)Change in electricity generation in China, 2015-2024
800
700
600
500
400
300
200
100
0

2024

2023

2022

2021

2020

2019

2018

2017

2016

- 200

2015

- 100

China
Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change
IEA. All rights reserved.

PAGE | 46

IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Sources: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

India
After a more than 2% decline in electricity demand in India during2020 due to the Covid-19 pandemic, 2021 saw a rebound withgrowth of estimated 10%. This took demand to levels higher than
before the pandemic, despite the outbreak of new Covid-19 variants

Infrastructure in India in August 2021. Both initiatives aim toaccelerate the adoption of electric vehicles by providing economic
incentives, as well as guidelines for improving associatedinfrastructure.

in March-June. Over 2022-2024 we expect annual demand growth
to remain above pre-pandemic levels at around 6.5% per year.
While progress towards universal electricity access in India has long
been a main driver for increases in demand (rising from 76% in2010 to 98% in 2019), we expect current and future demand levels
to be driven by growth in the industrial and residential sectors. The
Make in India government initiative will continue to propel electricity
demand growth in the industrial sector by promoting local
manufacturing. Additionally, per-capita electricity demand in India is
still below the global average and therefore quality of service

As India’s demand for electricity continues to grow, the expansion ofgeneration capacity accelerates from 2022 onwards. While we
expect 48% of new demand to be met by coal-fired generation, lowcarbon sources provide about half of the additional supply. New
records for renewable capacity addition are expected in 2021 and
2022, principally wind and solar PV. Consequently, renewables
provide 35% of the incremental demand, with nuclear largely
accounting for the balance. Driven by state and central auctions, aswell as a target of 450 GW of installed renewable capacity,
renewable generation is expected to increase by 30% by 2024
relative to 2021.

improvements are expected to further drive electricity demand
growth through end uses such as cooking, cooling, and mobility –despite the positive impact of initiatives such as the Unlocking
National Energy Efficiency Potential strategic plan. While electric
mobility uptake in India is still nascent, electric vehicle numbers are
expected to increase with policy support. In June 2021 the Indian
government announced the extension of its Faster Adoption and
Manufacturing of Electric Vehicles in India (FAME) Phase II by two
years to March 2024 and the National Institution for Transforming
India (NITI Aayog) released its Handbook to Guide EV Charging
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IEA. All rights reserved.

India’s electricity mix remains largely coal-dominated. In 2021 coalmade up 74% of power generation, followed by renewables with ashare of 20%. By 2024 we forecast coal-fired generation to accountfor 70% of the electricity mix, and renewables for 22%. 2021 saw asignificant increase in coal-fired generation (up 13%) after
contractions in 2019 and 2020 driven by economic slowdown, aheavy monsoon season in 2019 that increased hydro generation,and the Covid-19 pandemic.

Regional perspective

Electricity Market Report – January 2022

Monthly electricity supply in India, 2019-2021
Total electricity supply (TWh)At the COP26 in Glasgow in November 2021, India pledged toreach net zero by 2070. However, despite targets for reducing theemissions intensity of GDP and for 40% of generation capacity to
be non-fossil fuelled, and despite the coal supply shortages during
autumn 2021, new coal-fired plants are still being built. Coal-fired
capacity is expected to continue growing in the near future.
According to the draft National Electricity Policy 2021, the Ministryof Power confirms that coal will continue to provide a significant
contribution to electricity generation.
As of November 2021 India had seven nuclear reactors underconstruction with a total gross capacity of 5.2 GW. We expect
nuclear generation to see a sustained increase in the coming years,
surpassing gas from 2022 as the third-largest contributor to
generation, after coal and renewables.

160
140
120
100
80
60
40
20

The Indian Ministry of Power is currently studying the developmentof market-based economic dispatch, and presented a discussion
paper on the topic for comments in June 2021. Further developmentof power markets, and particularly the implementation of marketbased economic dispatch, can further the participation of renewableenergy generation in the Indian system by introducing merit orderdispatch and improved balancing from reserves being shared

0

1

2

3

4
2019

5

6
7
Month

8

9

2020

2021

10

11

12

IEA. All rights reserved.

PAGE | 48

IEA. All rights reserved.

Source: IEA analysis based on data from Central Electricity Authority, Ministry ofPower, Government of India, National Power Portal.

across states, among other improvements.

Regional perspective

Electricity Market Report – January 2022

Coal continues to be the single largest source of additional supply, but low-carbon is catchingup
Change in electricity generation (TWh)Change in electricity generation in India, 2015-2024
200
150
100
50
0

2024

2023

2022

2021

2020

2019

2018

2017

2016

- 100

2015

- 50

India
Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

PAGE | 49

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IEA. All rights reserved.

Regional perspective

Electricity Market Report – January 2022

2050. This plan includes a renewable share of 36-38% by the end of2030, almost double the share in 2021, and nuclear generation of
20-22%, which could further accelerate the use of both sources.

Japan
In 2021, Japan’s electricity demand returned to about the 2019 level(up 1.5%). Despite demand recovering in the industrial andcommercial sectors, the impact of the pandemic continued and therecovery was limited due to an over six month long state of
emergency in 2021. Japan’s electricity demand has declined overthe past decade due to strong energy conservation activities anddespite increasing electrification. We forecast this trend to continue

Korea
After growth of 1% in 2020, we estimate electricity demand in Korea
to have increased by over 5% in 2021, despite higher numbers of
new Covid-19 cases. We anticipate stable annual demand growth ofslightly above 1% to 2024, led by the industrial sector and followed

during 2022-2024 with an average annual decline of less than 1%.

by the commercial and services sector.

In 2021 gas and coal met around 70% of total electricity demand,but the contribution of renewables is rising every year. In the period
to 2024 we expect coal- and gas-fired power generation to decline
by about 15% and 9% respectively relative to 2021, while renewablegeneration is set to grow by 21%. Nuclear generation could
increase even more than renewables, due to reactor restarts. This
includes plants resuming operation after temporary shutdown due toanti-terrorism safety measures, as well as units restarting for the
first time since the accident at the Fukushima Daiichi nuclear power
plant, following the Great East Japan Earthquake of 2011. However,some uncertainty exists due to concerns over non-compliance withregulations and local opposition.

We expect renewable capacity to grow strongly over the forecast
period, increasing by almost 50% by 2024 compared to 2021. This
expansion is led by solar PV at over 4 GW per year. Both gas- andcoal-fired capacity continues to rise during the forecast period, as
plants already under construction come online despite government
announcements to phase out both technologies in the longer term.

In October 2021 the Japanese government launched the sixth
Strategic Energy Plan, aimed at achieving carbon neutrality by

PAGE | 50

IEA. All rights reserved.

Renewable electricity saw the strongest growth in 2021, rising byaround 30% above 2020’s output, mostly from solar PV andbiomass. From 2022 to 2024 we expect on average 15% additional
total renewables output per year. Gas generation also rose in 2021
(up 22%). Nuclear generation declined by 8%, with some plants
offline due to long-term maintenance. In the next three years we
expect nuclear generation to grow in absolute terms to about thesame extent as renewables, increasing by 5% per year on average,

Regional perspective

Electricity Market Report – January 2022

as four new nuclear units are scheduled to start operating. Low

expected to surpass 2019 levels in 2022. We expect slow continued
growth up to 2024 at an average of around 1% per annum.

demand growth and the rapid expansion of low-carbon generation
mean that coal-fired generation, which decreased by around 3% in

Most capacity additions in Australia during 2021 are powered byrenewables, with 1.3 GW of new wind capacity and 4.7 GW of solar
PV. We expect both technologies to continue growing at a similarpace up to 2024. Around 2 GW of coal-fired capacity is due to retire

2021, continues to decline at around the same rate out to 2024.
In September 2021 the Korean parliament approved its bill on
carbon neutrality and set aside KRW 12 trillion (USD 10 billion) for
the state budget in 2022 to achieve GHG emission reductions.
Korea has also set out two main scenarios to meet its net zerotarget in 2050 and announced more ambitious nationally determinedin the coming years: Liddell Power Station is to close its first unit
(500 MW) in April 2022 and the remaining three units (1 500 MW) in
April 2023. A number of new battery projects have also beenannounced, with what will become the world’s largest battery, a
1.2 GW facility at Kurri Kurri, to be completed in 2023. The
Australian electricity market moved to five-minute settlement on
1 October 2021, which is expected to favour fast-acting resources
such as batteries.

contributions under the Paris Agreement ahead of COP26. Korea
introduced its current emissions trading scheme in 2015, which
covers over 70% of emissions including heat, power, industry,buildings, domestic aviation, waste and public services. The
scheme has entered its third phase (2021-2025), in which the power
sector is allocated 90% of its allowances free of charge.

Coal-fired generation made up around 53% of electricity generationin 2021. We forecast a slow decline following capacity retirements,
its share falling to around 47% by 2024. Renewable generation

Australia

grew by around 18% in 2021 year-on-year, and is forecast tocontinue growing up to 2024 following continued capacity additions.
Gas generation fell by around 16% in 2021 and is expected to

While Covid-19 cases in Australia were minimal in the first half of2021, outbreaks of new variants in the second half saw a number oflockdowns in Australian states. Although cases continued to rise inlate 2021, the vaccine rollout progressed steadily from March, over
60% of the population receiving two doses by October.

In October 2021 Australia announced its pledge to reach net zerocarbon emissions by 2050. Additionally, at COP26 the country
announced plans to reduce its emissions to 35% below 2005 levels
by 2030.

After falling by around 1.3% in 2020, Australian electricity demandrebounded somewhat in 2021 with close to 1% growth, but is only

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IEA. All rights reserved.

decline further by around 3% per year on average up to 2024.

Regional perspective

Electricity Market Report – January 2022

Electricity demand is relatively stable in Japan, Korea and Australia, with low-emission
generation growing and coal gradually declining
Change in electricity generation (TWh)Change in electricity generation, 2015-2024
60
40
20
0
- 20

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

2015
2016
2018
2019
2020
2021
2022
2023
2024

- 60

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

- 40

Japan

Korea

Australia

Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

PAGE | 52

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IEA. All rights reserved.

Regional perspective

Electricity Market Report – January 2022

Southeast Asia
Change in electricity generation in Southeast Asia, 2015-2024

60
40
20
0

2024

2023

2022

2021

2020

2019

- 40

2018

- 20

2017

Covid-19 cases severely affected many countries, particularly
Indonesia, Malaysia, Thailand, the Philippines and Viet Nam. Thisdelayed economic recovery and led to lower demand growth, thelargest impact being in the residential and commercial sectors.
From 2022 we expect a stronger recovery, with annual demand
growth close to 5% in 2022-2024.

80

2016

In the first quarter of 2021 many Southeast Asian countries saw
electricity demand recover from the previous year’s declines, led by
the industrial sector. However, in the second quarter a surge in

100

2015

Change in electricity generation (TWh)We estimate electricity demand in Southeast Asia to have grown by
3.8% in 2021 following an overall decline in 2020, despite the region
continuing to be affected by the Covid-19 pandemic. Most of thedemand growth was met by increased renewable generation, withgas and coal generation remaining about constant compared to
2020.

Southeast Asia

Electricity supply in Southeast Asia continues to be led by coal(around 43%), followed by gas (31%) and then renewables (25%).
However, the share of both coal and gas in the mix declined in 2021
while the renewables share increased by more than two percentage
points. While renewables growth is set to continue up to 2024, we
expect the sum of coal- and gas-fired generation to meet around
two-thirds of new demand over this period.

Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change
IEA. All rights reserved.

PAGE | 53

IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy
sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

Indonesia

operations expected to begin by the end of 2022. This project isviewed as a pilot for the development of hybrid floating solar PV

The impact of Covid-19 affected Indonesia from April 2020,
hampering economic growth and leading to a decline in electricity
consumption. The GDP growth rate of -2.1% in 2020 was
associated with a 0.8% reduction in electricity consumption year-on-

plants in many other islands to meet the renewables target.
The government has announced a commitment to achieve net zero
emissions by 2060, or sooner with financial and technologicalsupport from developed nations. Five principles were identified inyear, caused by reductions in consumption in the industrial andcommercial sectors. While demand began to rebound in 2021, asurge of Covid-19 cases in the third quarter delayed economic
recovery, resulting in revised expectations for economic growth in
2021 of 3.5%, down from 4.5%. We expect electricity demand tohave grown by 3.6% in 2021 and to grow by over 4% in 2022.
Annual electricity demand growth is expected to be slightly above
4% on average in the period 2022-2024. Similar to many other
ASEAN countries, the energy-intensive industrial sector is expected
to grow faster than other sectors.

achieving the target: 1) increasing the share of renewables; 2)
reducing the use of fossil fuels; 3) promoting electric vehicles; 4)electrification in the residential and industrial sectors; and 5) utilisingcarbon capture, utilisation and storage (CCUS). PLN – the stateowned electricity company – has announced that it will build no newcoal power plants after 2023, when they expect to complete allplants under their 35 GW programme and 7 GW Fast Track
Programme. Nonetheless, the recent electricity supply plan
(RUPTL) still expects additions of around 5 GW of coal-fired
capacity from independent power producers between 2024 and2030. As part of the commitment announced by the Ministry ofEnergy and Mineral Resources, no new fossil power plants are to

As of July 2021 the total generation capacity of Indonesia was
74 GW. Coal still accounts for the largest share of generation(58%). The share of renewables has remained stable (around 17%)
for the last four years. The share of solar PV was around 0.1% in
2021. To reach the national renewable target of 23% in 2025, apresidential regulation on renewables is expected during 2022. It is
anticipated to use feed-in tariffs and auction schemes to accelerate
investment in all renewable resources. The construction of the
145 MW Cirata floating solar PV plant, one of the largest examplesof floating solar PV in the world, will soon begin after reaching afinancial close agreement in August 2021, with its commercial

be built beyond 2030. The first stage of coal-fired power plant
retirements is due to begin in 2031.

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Grids are an important flexibility resource for integrating renewables
in a reliable and cost-effective manner, and interconnection and griddevelopment are currently key challenges in Indonesia, both
between islands within the nation and across borders. To this end,
the Indonesian government is encouraging grid extensions within

Regional perspective

Electricity Market Report – January 2022

and between islands. According to Indonesia’s net zero plan, inter-

development plan (PDP8) from September 2021 increased by
3.4 GW the target for coal-fired capacity installed by 2030,
compared with the February 2021 version of the document. While
this revision decreased onshore wind capacity targets by 6 GW andremoved offshore wind, expansion of renewable capacity remains apillar of the country’s plan. It is therefore expected that by 2024 coaland renewables will have similar shares in the Vietnameseelectricity mix (43% and 42% respectively), with gas-fired

island interconnection should start commercial operation in 2031.

Viet Nam
After successfully limiting the pandemic’s impact in 2020, Viet Nam
experienced a strong Covid-19 wave from May 2021, which
prompted restrictive measures and lockdowns lasting until theautumn of 2021. These lockdowns led to large production
shutdowns, especially in Ho Chi Minh City and the industrial
provinces; the country’s economy was strongly affected. In
September 2021 the industrial production index for the electricity
and gas sector dropped by 10% year-on-year, and electricity
demand in the first two weeks of the month was 15% lower than in
2020. Based on these impacts, we expect electricity demand growthin 2021 to have with 5% remained below pre-pandemic levels. From2022 electricity demand is expected to recover further and grow by
7% every year, pushed by the withdrawal of restrictions, risingvaccination rates, urbanisation and the country’s strong
manufacturing industry.

generation contributing 14% in 2024 due to LNG-to-power projects
such as Thi Vai and Son My coming online.

ThailandThailand is slowly recovering from an economic downturn and adrop in electricity consumption caused by the Covid-19 pandemic.
Peak demand in 2021 increased by over 5% to 30.1 GW comparedwith 28.9 GW in 2020. During the first ten months of 2021 electricity
demand grew by 1.4% compared with the same period in theprevious year, due largely to increased demand in the industrial
sector. Industry accounted for the largest share of overall electricity
demand at around 45%, and industrial demand grew by 5.5% in thisperiod, the largest growth being seen in car manufacturing, iron andViet Nam saw strong growth in installed solar PV capacity in 2020,
with net additions of close to 11 GW. Nevertheless, the country
continues to rely on coal to meet a large proportion of its electricity
demand – for 2021 we estimate that 45% of electricity generation
came from coal. Despite concerns over the availability of financing
for coal power projects, the latest revision of the electricity

the second quarter of 2021. With the gradual reopening of
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IEA. All rights reserved.

steel, and rubber manufacturing. Electricity consumption in theresidential increased by 2%, whereas the commercial sector
consumption declined by more than 6% during the first ten months
due to the strict Covid-19 containment measures, particularly during

Regional perspective

Electricity Market Report – January 2022

economic activity, we estimate that overall demand grew in 2021 by
2%, with industry leading the rise. Similar annual growth rates of 23% are forecast for electricity demand in 2022-2024, led by industry

October 2021. The plan is to increase the capacity of hydro-floating
solar PV to 5.3 GW by 2037, utilising existing hydropower plants.

and commerce.

Philippines

Although natural gas has been the largest source of electricity
generation in Thailand over the past decades (estimated 60% in

Varying confinement measures due to the pandemic began in thePhilippines in 2020. The residential sector had the highest share ofelectricity demand at around 35%, and with a 12% year-on-year rise
was the only sector to grow in 2020. This tempered the countrywide
fall in demand to a decrease of around 5% relative to 2019. With thegradual reopening of activities, demand rebounded and in the firsthalf of 2021 was 3.1% higher than in the same period in 2019.
Demand recovery is set to continue as vaccinations are rolled out
into 2022, resulting in annual growth of 5-6% until 2024.

2021), the first ten months of 2021 saw a slight decrease in total
gas-fired generation (down 1%) and its share in the electricity mix.
Coal, providing 21% of total generation in 2021, declined by 4%.
At COP26 Thailand officially announced its commitment to achievecarbon neutrality by 2050, and net zero GHG emissions by 2065,
with international support. This target has been accelerated fromthe original plan of 2060-2065 that was approved in August 2021
under the new National Energy Plan 2022. As part of this nationalenergy target, the Electricity Generating Authority of Thailand(EGAT) has also announced the EGAT Carbon Neutrality by 2050
policy, including a goal to reach peak emissions by 2025 byfocusing on transforming generation sources towards clean energy,
modernising the power grid and promoting demand-side
management. Under the new national plan, at least a 50% share of
new generation must come from renewables. Large-scale hybridhydro-floating solar PV power plants, batteries and CCUS havebeen identified as the main clean technology sources. Thailand’s
first hydro-floating solar hybrid project, with 45 MW capacity andcurrently the world’s largest, started commercial operation in

Low reserve margins were observed in the Luzon grid during April
and May 2021 (the hot and dry season). Reserve shortfalls wereseen on several days due to high demand for cooling coinciding
with lower hydropower availability. Electricity security has beenhighlighted as a concern, especially given the general elections
scheduled for May 2022. The start of commercial operation of thedelayed Dinginin supercritical coal power plant (1.3 GW) is
expected to help alleviate this concern once both units come online,
A moratorium on the endorsement of new coal power plants was
passed in the fourth quarter of 2020, but about 3.15 GW of total
additional coal capacity is still expected between 2021 and 2025
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IEA. All rights reserved.

anticipated for the second quarter of 2022.

Regional perspective

Electricity Market Report – January 2022

from previous approvals. The total new generating capacity
committed for the period, including coal, comes to 5.8 GW. In
addition, 1.54 GW of battery storage capacity is also committed.

Gas-fired plants meet the vast majority of demand (95% in 2021),
with gas supplied through pipelines from Malaysia and Indonesia
and LNG imports. Long-term supply contracts largely insulated
Singapore from the high Asian LNG spot prices. However, in 2021
the country saw wholesale electricity price surges, driven partly by
maintenance affecting pipeline gas from Indonesia. Singapore
started purchase inquiries in the spot market due to the expected
expiry of a long-term contract with Indonesia by 2023. In addition, it
announced pre-emptive supply security arrangements, including
standby fuel facilities to stabilise wholesale electricity prices, and aco-operation arrangement where generation companies looking tosell excess gas must offer it first to EMA and other local generation

Market design changes to support higher shares of variable
renewables continue to be implemented in the Philippines. In June
2021 five-minute intervals in the wholesale market were introduced,
as well as a renewable energy option for end users. The share ofwind and solar PV remains low at estimated 3% in 2021 comparedwith geothermal (10%) and hydro (7%), and the system isdominated by coal (54%) and gas (21%). Implementation of areserves market was planned by the end of 2021, while demandside bidding is to be introduced by 2024.

companies.

The major island groups of Luzon, Visayas and Mindanao will soon
be connected once the Visayas-Mindanao interconnection project iscompleted in early 2022, thereby helping consolidate the available
reserves for the country.

Singapore announced its requests for proposals to secure 4 GW of
low-carbon electricity imports to make up 30% of its power supply
by 2035. The first 1.2 GW is expected by 2027. It has already set up
a two-year trial to import 100 MW of cross-border electricity from
Malaysia, starting by 2022. This will help diversify its sources ofSingaporeelectricity and is a step towards building the ASEAN power grid.

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IEA. All rights reserved.

We estimate Singapore’s electricity demand to have topped preCovid-19 levels in 2021 (up 3.4% on 2020). Despite a surge in
Covid-19 cases, lockdown measures have been limited compared
to 2020 and the vaccination rate was already high in October 2021
(84%). We expect demand to grow above 2% until 2024, similar to
the forecast by the Energy Market Authority of Singapore (EMA).

Regional perspective

Electricity Market Report – January 2022

Electricity demand growth in Southeast Asia is fuelled by a mix of coal, gas and renewables
Change in electricity generation (TWh)

40
30
20
10
0
- 10

8
6
4
2
0
-2

Coal

Gas

Nuclear

Other non-renewables

Philippines
Renewables

2024

2021

2018

2015

2024

2021

Thailand

2018

2024

2021

2018

2015

2024

2021

2018

Viet Nam-6

2015

Indonesia

2015

2024

2021

2018

- 20

10

-4

2015

Change in electricity generation (TWh)Change in electricity generation, 2015-2024

Singapore

Net change
IEA. All rights reserved.

PAGE | 58

IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

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IEA. All rights reserved.

AmericasRegional perspective

Electricity Market Report – January 2022

Strong demand growth and high gas prices lead to a temporary rebound for coalCountries in the Americas region posted a strong rebound inelectricity demand of 4% in 2021, following declines of 2% in 2019and 3.0% in 2020. The growth in demand is set to moderate overthe next three years, averaging close to 1% between 2022 and2024. This is largely driven by the United States, which comprises
about two-thirds of overall regional demand. We expect US demand
growth to have reached 3% in 2021, slowing to less than 0.5% overthe next three years. The figures in Canada are largely in line with
its neighbour, while in Mexico we expect 2021 to have seen astronger rebound in 2021 of 6%, which then moderates to 3-4%other end uses like heating and cooling, is expected to be a main
driver of electricity demand in the future, although partially offset byincreasing efficiency in current forms of electricity use.
On the supply side, coal-fired generation posted a remarkableannual rise in output of 17% in 2021, after six straight years of
declines, boosted by lower hydro availability due to drought andhigher natural gas prices which drove gas-to-coal switching. This
increase is likely to be fleeting. A return to near-normal hydroconditions in 2022 as well as increases in wind and solar capacity
should reduce the demand for coal by around 7% annually over the
next three years.

annually over the next three years.
In South America annual demand growth reached 6% in 2021,
Brazil’s demand growing by over 7.5%. We estimate growth to havebeen above 7% in Peru and Colombia, and around 3% in Argentina

Renewables including hydro accounted for about 34% of annual
generation in the region in 2021, the largest share of all sources,
followed by gas at 32%, coal at 17%, nuclear at 14% and oil at
2.6%. By 2024 we expect renewables to account for almost 40%, its
share increasing almost entirely at the expense of coal, which is

and Chile.
Commercial and industrial demand were the main drivers of growthin 2021 in the Americas region, reflecting the increase in economic
activity following Covid-19 lockdowns. Residential demand wassteadier, growing by between 1% and 2% in 2020 and 2021 despite
the reduction in overall economic activity, a further reflection of the
impacts of Covid-19. Electricity demand for transport is expected tosee the strongest growth between 2021 and 2024, albeit from a verysmall base. The increasing electrification of transport, as well as

expected to decline to a share of 13%.

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This will drive emissions lower, both in their overall level andintensity. We expect emissions intensity to fall to 272 g CO2/kWh in
2024, down from 311 g CO2/kWh in 2021 and 404 g CO2/kWh in
2014. Overall emissions are set to decline to 1.9 billion t CO2 in
2024, from 2.1 billion t CO2 in 2021.

Regional perspective

Electricity Market Report – January 2022

Demand growth moderates after the rebound from Covid-19 in 2021
Electricity demand growth

Development of electricity demand, 2015-2024
14%
12%
10%
8%
6%
4%
2%
0%
-2%

Americas

United States

CanadaDemandMexico

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

-6%

2015

-4%

BrazilDemand forecast
IEA. All rights reserved.

PAGE | 61

IEA. All rights reserved.

Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

Coal gets a boost in 2021, leading to higher emissions; renewables dominate thereafter
Development of emissions intensity, 2015-2024
CO₂ intensity (g CO₂/kWh)

400
300
200
100
0
- 100
- 200

600
500
400
300
200
100

2024

2023

2022

2021

2020

2019

2018

2017

- 400

2016

- 300

2015

Change in electricity generation (TWh)Change in electricity generation, 2015-2024

Americas
Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change

0
2015

2017

2019

2021

Americas

United States

MexicoBrazil2023
CanadaIEA. All rights reserved.

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IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

United States
increase in the price of natural gas and strong demand growth. We
expect this increase to be short-lived, however. Coal-fired
generation is anticipated to fall by an average of close to 6%

Electricity security will be closely watched in the United States thiswinter, as the possibility of a repeat of the severe power cuts that
occurred in Texas in February of 2021 cannot be discounted. A joint
report issued in October on winter readiness of the power sector by
the regulator FERC and reliability entity NERC strongly urged
system operators to adopt winterisation recommendations to ensure
reliability.

annually in the period 2022 to 2024.

US electricity demand rose by 3% in 2021, returning to levels seen
in 2019 prior to the Covid-19-related disruption in economic activity.

Nuclear generation is expected to have declined by 1.5% in 2021,
continuing a slight downward trend over the past five years as
facilities retire, including Indian Point 3 in New York at the end of
April. The commissioning of Vogtle Units 3 and 4 has been delayed
until late 2022 and early 2023 respectively. Construction of these

We expect it to moderate gradually and stabilise by 2024.

facilities commenced in 2012.

Gas-fired generation declined by around 3% in 2021, driven byhigher natural gas prices improving the competitiveness of coal-fired

We anticipate hydroelectric power generation to have declined by
11% in 2021 compared with 2020, as long-term drought conditions
prevailed in many parts of the western states. For 2022 we expect
growth of 8% year-on-year as more average hydro output returns.

generation. The price of gas at Henry Hub, the benchmark US
location, reached USD 5.5 per MBtu in October, up from USD 2.4
per MBtu for the same month in 2020 and the highest price for themonth since 2008. In 2022 low electricity demand growth combinedwith strong renewables growth squeezes both gas and coal
generation. In the latter two years of the forecast, falling natural gas
prices allow gas to increase its share at the expense of coal, with

Most of the growth in electricity generation between 2022 and 2024
is likely to be from wind and solar PV. In 2021 wind generation
increased by 11%, while solar output grew by 26%. We expect wind
output to grow by an annual average of 8% between 2022 andCoal-fired generation is expected to have risen by 19% in 2021, thefirst annual increase since 2014, as it benefited from the relative
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IEA. All rights reserved.

2024, and solar generation to grow at an average rate of 22% overthe same period.

renewables growth shrinking total fossil fuel generation.

Regional perspective

Electricity Market Report – January 2022

Renewables growth bounces back, while coal and gas decline
Change in electricity generation (TWh)Change in electricity generation, 2015-2024
300
200
100
0
- 100

2024

2023

2022

2021

2020

2019

2018

2017

2016

- 300

2015

- 200

United States
Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change
IEA. All rights reserved.

PAGE | 64

IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

Nuclear output is expected to fall due to additional units undergoingrefurbishment. Two large nuclear units in Ontario (Darlington 3 andBruce 6) began multi-year outages in 2020 and will not return toservice until late 2023 or early 2024. A third unit, Darlington 1, will

CanadaCanada’s electricity demand rose by about 3% in 2021, offsetting
the decline of 2.6% in the previous year. Economic recovery and acolder winter than in 2020 have helped boost Canadian electricity
demand. Extreme heat in June 2021 saw new summer peakdemand records set in western Canada. In the period 2022-2024
demand grows much more gradually, averaging 1.4% annually.
Electricity exports, which jumped by about 20% in 2020, revert tohistorical levels in 2021 where about 10% of production is exported

Coal-fired generation sees a marked decline thanks primarily to thecoal phase-out in the province of Alberta, which is expected to becompleted by 2023, most of the units being converted to operate on
natural gas. Coal-fired generating capacity in Canada, whichmeasured 8.8 GW in 2019, falls to 2.9 GW in 2024, coal-fired
generation falling by over 80%. Natural gas-fired generation grows
as a result of the coal closures and conversions and nuclear
outages. Electricity trade rose in 2020, with 57 TWh of net exports
to the United States. In September 2021 Hydro Quebec entered into
an agreement with the State of New York for the transmission of
1 250 MW (10.4 TWh per year) of hydro and wind power from
Quebec to New York City. One unusual feature of the deal is thatthe transmission line, known as the Champlain Hudson Power
Express, will be entirely underground or underwater from the US
border with Canada to its endpoint in New York City. The deal issubject to regulatory approval. Another previously approved export
project, New England Clean Energy Connect, which would lead tothe export of 1 200 MW (9.45 TWh per year) of power from Quebec
to the state of Massachusetts via Maine, hit a roadblock in
November 2021 when a referendum in Maine passed calling for aban on the construction of the transmission lines for the project.

to the United States.
Most of the renewable capacity growth in Canada is in hydropower.
Muskrat Falls, a new (824 MW, 4.9 TWh per year) hydro facility inLabrador is operational, although by the end of 2021 associatedtransmission facilities were still being commissioned. The Canadianand Newfoundland and Labrador governments reached anagreement in principle for the financial restructuring of the project.
The Keeyask project (700 MW, 4.4 TWh per year) in Manitoba is
expected to enter operation in 2022, as is the 4th unit of the La
Romaine project (245 MW, 1.3 TWh per year) in Quebec. The
Peace River Site C project (1 100 MW, 5.1 TWh per year) underconstruction in British Columbia has an expected in-service date of2025. Wind and solar investment continues, their capacity set toreach 17 GW and 5 GW respectively in 2024.

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IEA. All rights reserved.

go offline in 2022 and a fourth unit, Bruce 3, in early 2023.

Regional perspective

Electricity Market Report – January 2022

MexicoBrazilElectricity demand recovered in Mexico in 2021, growing by morethan 6% year-on-year. Most of the demand increment in 2021 wasmet by an increase in gas-fired generation. This was despite thewidespread loss of gas-fired generation in February 2021 that led to
power cuts to about 11 million users due to the unavailability of gas
supplies from across the border, caused by record low temperatures

Similar to other countries in the region, electricity demandrebounded in 2021, rising by 7.6% year-on-year. However, theworst drought since the start of records in 1930 led to a drop in
renewable generation, due mainly to a decline in hydropower. Thus,
the sum of coal- and gas-fired generation rose by 31 TWhcompared with 2020 (up 43%).

in the southern United States.

In order to guarantee security of supply, the Brazilian government
enacted a series of special measures such as the establishing a
new committee for emergency hydropower management, withpowers to temporarily determine limits on use, storage and flow at
the country’s hydropower plants, extending to the end of 2021.

In 2022 generation from renewable energy is set to grow by 17%, ahigher rate than other sources, providing about 12 TWh of additional
electricity compared to 2021, driven primarily by new wind and solar
capacity and higher hydro availability.
In late 2021 the Mexican government announced a constitutional
reform proposal to reverse the 2014 electricity market reform.
Growth in renewable generation is expected to slow after 2022,
while still increasing because of additional solar rooftop PV
installations and increased dispatch from the country’s hydropower
generation facilities. Additional government measures to increase
renewable energy as part of the reform proposal include building a
1 000 MW solar PV park, a 25 MW new geothermal generation unit
and repowering hydropower stations to increase capacity by
264 MW. Renewables are expected to grow very slowly in 2023 and2024, meaning that oil-fired generation will be needed to cover thegrowing demand.

In September 2021 Brazil’s Ministry of Energy published guidelines
for additional simplified auctions of reserve generation contracts
covering the period from May 2022 to December 2025. Additionally,
the country’s energy regulator, ANEEL, approved a
BRL 1 619/MWh (approximately USD 300/MWh) price cap on
natural gas-fired generation for its October 2025 auction.

needed to maintain continuity of supply.
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With increased rainfall in October 2021, we expect renewablegeneration to start rising year-on-year by 20 TWh in 2022 (up 4%)
and 54 TWh in 2023 (up 10%). However, electricity prices are set toremain high throughout 2022 due to the anticipated need to limithydropower generation and the cost of contracted gas reserves

Regional perspective

Electricity Market Report – January 2022

Coal-fired generation is being replaced by renewables and gas
Change in electricity generation (TWh)Change in electricity generation, 2015-2024
60
40
20
0
- 20

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

2015
2016
2018
2019
2020
2021
2022
2023
2024

- 60

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

- 40

CanadaMexicoBrazilCoal

Gas

Nuclear

Other non-renewables

Renewables

Net change
IEA. All rights reserved.

PAGE | 67

IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

PAGE | 68

IEA. All rights reserved.

EuropeRegional perspective

Electricity Market Report – January 2022

The comeback of fossil fuels in Europe is only temporary
After demand for electricity in Europe fell by 1.3% in 2019 and 4% in
2020, it increased by more than 4% in 2021 to about the prepandemic level of 2019. Two factors were the main drivers for thestrong rebound. First, the region’s economy grew strongly, headedby the industrial sector while the commercial sector’s recovery wasdampened by health protection measures. Second, colder
temperatures raised heating demand – April 2021 was the coldest

We expect the period 2022 to 2024 to be characterised by strong
renewables growth, which crowds out fossil fuels (declining by
almost 10% during the period) and compensates for declining
nuclear generation in 2022 and 2023 (down 4% over the whole
period). Nuclear’s decline is related to the German nuclear phaseout and further closures in Belgium and the United Kingdom.
As gas prices are expected to be relatively high throughout 2022,
coal is set to largely maintain its role during the year (declining by3%), but is likely to decline significantly in 2023 (down 15%) andsince 2003. During 2022 we expect demand to continue to grow,albeit at a slower pace of 1.7%, supported by continued economic
recovery. A return to static demand is likely in 2023 and 2024.

2024 (down 13%) due to declining gas prices and slower demand
growth. Gas benefits from improving competitiveness against coal in
2023, when its generation increases by 7%, but it is increasingly
replaced by renewables in the medium term.

The most notable development on the supply side in 2021 was thestrong growth of coal-fired generation, increasing by more than 11%
after a 20% decline in 2020. This was the first increase since 2012.
Coal served 40% of the year’s incremental demand, followed by
nuclear at 30% (growing by 6%). The main reasons for this reboundof coal are the strong growth in demand coupled with relatively low
growth in renewables generation (up 1%, caused by exceptionally
low wind speeds). Additionally, high natural gas prices improved thecompetitive position of coal-fired plants vis-à-vis gas, despite
allowances under the EU emissions trading system (EU ETS) being
over twice the price of those in 2020. High fuel prices resulted inrecord-high wholesale prices. Fourth quarter prices in France,
Germany, Spain and the United Kingdom were three to more thanfour times higher than the fourth quarter 2016-2020 average.

In 2021 the European Union put forward a wide range of reforms to
the EU ETS as part of its Fit for 55 package. The reforms areintended to align the carbon market with the new 2030 EU emission
target of reducing greenhouse gas emissions by at least 55% from1990 levels (up from 40%). For the EU ETS, a 61% reduction inemissions by 2030 from 2005 levels is proposed (up from 43%).

down 27%).
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IEA. All rights reserved.

After a year-on-year emissions surge of 8% in Europe in 2021 (4%higher emissions intensity), we expect a fall of 24% by 2024
compared with the pre-pandemic level of 2019 (emissions intensity

Regional perspective

Electricity Market Report – January 2022

European electricity demand is expected to stagnate after a strong rebound in 2021 and 2022
Electricity demand growth

Development of electricity demand, 2015-2024
10%
8%
6%
4%
2%
0%
-2%
-4%

EuropeGermany

FranceItaly
DemandSpain

United Kingdom

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

-8%

2015

-6%

TurkeyDemand forecast
IEA. All rights reserved.

PAGE | 70

IEA. All rights reserved.

Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

Electricity sector emissions and emissions intensity in Europe are expected to decline again
after 2021
Development of emissions intensity, 2015-2024
CO₂ intensity (g CO₂/kWh)

200
150
100
50
0
- 50
- 100
- 150

450
400
350
300
250

150

- 250

2024

2023

2022

2021

2020

2019

2018

2017

100

2016

- 300

500

200

- 200

2015

Change in electricity generation (TWh)Change in electricity generation, 2015-2024

50
0
2015

EuropeCoal

Gas

Nuclear

Other non-renewables

Renewables

Net change

2017
EuropeFranceSpain
Turkey

2019

2021

2023

Germany
Italy
United Kingdom
European Union

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

PAGE | 71

IEA. All rights reserved.

IEA. All rights reserved.

Regional perspective

Electricity Market Report – January 2022

EU ETS flexibility relieves pressure from gas markets
EU ETS. If the demand for allowances increases due to increasingcoal-fired electricity generation, the price of allowances also
increases to keep demand and supply in balance.

The EU ETS puts a cap on total emissions that can be emitted bypower plants, industry and the aviation sector. Each year, thenumber of new emission allowances decreases. Allowances can be
traded and every year emitters must submit sufficient allowances to

Gas prices increased strongly from the end of 2020 and in particularin the second half of 2021, more than the simultaneous increase incoal prices. Consequently, electricity market participants began gasto-coal switching and therefore emissions surged. The EU ETS

cover their annual emissions. Excess allowances can be carriedforward into the next year.
Prices are determined by the long-term expectations of market
participants regarding demand and supply of allowances, which arevalid for more than ten years. This balance can be affected, forexample, by an unexpectedly large increase in energy demand, as
currently seen due to the strong economic recovery, or a tightening
on the supply side as proposed in the Fit for 55 package.

market responded by increasing the price for emission allowances,
partially offsetting the growing price difference between gas andNonetheless, higher allowance prices did not fully prevent gas-tocoal switching and the consequent increase in emissions from coalfired electricity generation. That carbon prices did not increase yet
more strongly shows a strength of the EU ETS market design: thecarbon budget spans multiple years and therefore there is no fixed
cap for individual years. Instead, emissions can be balanced over alonger time period. In 2021, due to the tight supply situation in gas
markets (and therefore high prices), using gas instead of coal would
have been very costly and economically inefficient. Instead, the EU
ETS allowed for a shift from gas-fired generation to coal andthereby relieved pressure from tight gas markets. The additionalemissions in 2021 have reduced the remaining allowances for the
coming years. This will limit future coal use.

For the electricity sector, the EU ETS typically regulates the balance
between the generation costs of gas- and coal-fired power plants:
with all other things remaining unchanged, a systematic increase ingas prices relative to coal results in gas-to-coal switching.
Consequently, carbon emissions increase. But as total carbon
emissions within the EU ETS are capped, the carbon priceincreases together with gas prices to prevent widespread fuelswitching. (For the sake of clarity, we are neglecting here theMarket Stability Reserve, which can influence the number ofallowances in circulation.) Another way of thinking about this is that
there is a fixed supply of emission allowances available within the
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IEA. All rights reserved.

coal.

Regional perspective

Electricity Market Report – January 2022

Coal-fired generation was more competitive than gas in 2021 despite increasing EU ETS prices
Gas- and coal-fired electricity generation costs, carbon prices, 2018-2021

150

Coal cheaper

100
50
0

Gas cheaperGas minus coal variable generation costs(EUR/MWh)
CO₂ price (EUR/t CO₂)

200

- 50
- 100
2018
CO₂ price

2019

2020

Gas minus coal (inc. carbon costs)

2021
Gas minus coal (exc. carbon costs)

IEA. All rights reserved.

PAGE | 73

IEA. All rights reserved.

Notes: Average monthly values. Assumed generation efficiencies are 40% for coal and 50% for gas.
Sources: Natural gas prices: TTF; coal prices: CIF ARA; carbon costs: EU ETS. Latest update: 5 January 2022.

Regional perspective

Electricity Market Report – January 2022

to our model analysis, we expect Germany’s net exports to decline
and the country to become a net importer of electricity for the firsttime since 2002. And finally, due to a continuing increase in thecompetitiveness of gas compared to coal, and induced fuelGermany
After falling for eight years in a row, coal-fired electricity generation
increased in Germany in 2021 (by estimated 25% compared with2020) – but still remained 4% below the 2019 level. Three causes
were responsible for this. First, electricity demand recovered byabout 4% following its Covid-19-related 4.6% drop in 2020. Second,renewable generation, due to low wind speeds, declined for the firsttime in more than 20 years (down 4.5%). And third, high gas prices

switching, we expect gas-fired generation to grow by 16% over thetwo years.
The rebound in coal-fired generation and the phase-out of nuclear
capacity mean that electricity sector emissions increased in 2021 forthe first time since 2013 (up 17%) and might only fall below the2020 level again in 2024. However, potential measures by the newrendered coal-fired generation more competitive compared to gas.

government entering office in December 2021 might affect theoutlook for the coming years. The new coalition’s agreement
includes, for example, the accelerated phase-out of coal (if possibleby 2030) and the faster expansion of renewable energy.

Germany’s remaining nuclear capacity, which provided about 12%of total generation in 2021, is due to be phased out by the end of2022. About 4.3 GW are set to be retired in two steps, at the end of2021 and the end of 2022. We expect coal- and gas-fired
generation in 2022 to remain at a similar level to 2021. Due to new
capacity and an expected return to historical average wind speeds,
we expect additional renewables generation (up 15%) tocompensate for the decline in nuclear. Growth of around 1% could
bring demand back to the pre-pandemic level of 2019.

FranceElectricity demand in France declined by 5% in 2020, largely driven
by the contraction of economic activity, which led to an 8%
decrease in GDP following the lockdown measures enforced in
March 2020 and after. We expect the industrial and commercial
sectors to have supported an overall recovery in power
consumption of close to 5% in 2021. For 2022 to 2024, we expect
demand to stagnate as efficiency gains offset increased

In 2023 and 2024 we anticipate coal-fired generation to decline by
one-third in total compared to 2022, enabled by four main factors.
First, coal capacity is due to be retired according to the approved
coal phase-out plans (down from 35 GW at the end of 2020 to
30 GW in 2022 and less than 26 GW in 2024). Second, renewables
continue to grow (by 11% in total over both years). Third, according
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IEA. All rights reserved.

electrification of the economy.

Regional perspective

Electricity Market Report – January 2022

As for electricity production, France is due to close its last coal-fired
plant in 2022 and renewables will continue to experience a steadyincrease. While nuclear electricity generation remains the dominantsource in France, its production level remains relatively stable. A

carbon neutrality by 2050. Beyond developing the nuclear industry
or renewable sources for power generation, France is now geared
towards measures to enhance energy efficiency to offset the impactof electrification on final consumption.

number of older units undergo planned outages as part of theirmaintenance. The start of the new Flamanville 3 reactor is delayedand commercial operation expected not before the second half of2023. Due to defaults detected during maintenance checks in
December 2021, two nuclear plants had to be taken offline,
dampening the outlook for nuclear generation in 2022. We expect
renewables to accelerate their expansion and, driven by wind and

Italy
Italy’s electricity consumption dropped by around 5% year-on-year
in 2020. Demand declined in particular in the second quarter (downmore than 10%), as lockdowns and other restrictive measuresweighed on commercial and industrial activity. We estimate that
Italy’s electricity demand rose by over 5% in 2021, returning close to2019 levels. Demand growth has been largely driven by economic
recovery and higher space heating requirements amid colder thanusual spring temperatures.

solar expansion, represent 27% of the generation mix by 2024 (upfrom 22% in 2021). While France’s power sector CO2 emissions are
already a very small share of total national CO2 emissions at 6%,
and are also among the lowest in Europe, we expect them todecline by a further 25% by 2024 compared with 2021.

Strong demand recovery in 2021 coincided with limited growth in

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IEA. All rights reserved.

renewable electricity generation (up by 1%), leaving additional
market space for thermal generation and imports. In the first half ofthe year, gas-fired generation rose by close to 10%, while coal-fired
power output plummeted by more than 20% year-on-year. The
surge in gas prices in Europe led to gas-to-coal switching in thesecond half of the year, with coal-fired plants increasing their output
by 3%, while gas-based generation growth slowed down to 5%
year-on-year.

With a largely decarbonised power system, electrification is set tobecome a key factor in the decarbonisation of France’s economy.
France was one of the first countries to put carbon neutrality into
law in 2019, committing to achieve it by 2050. Various possible
pathways, including the trade-offs between more nuclear power,
renewables and energy efficiency, have been explored by RTE, theFrench transmission system operator. In October 2021 the French
president announced that France would invest EUR 1 billion todevelop small modular reactors by 2030, followed by anannouncement in November to build new EPR reactors to achieve

Regional perspective

Electricity Market Report – January 2022

After growing by 1% in 2022, we expect Italy’s electricity demand tosee declines of less than 1% in 2023 and 2024, driven by improving
energy efficiency. Renewables-based electricity generation isforeseen to expand by 9% by 2024 compared with 2021 levels, andIn the transmission system, the Mallorca-Menorca islands
underwater connection was completed in 2020, reinforcing securityof supply in Menorca, an island with 100 000 inhabitants. On theregulation side, in July 2021 limits were extended for the Iberian
wholesale day-ahead and intra-day markets to align with othercoal-fired generation is set to be phased out by 2025. Gas-fired
power generation is expected to decline in 2022, but then to comeback to plateau near 2021 levels in 2023 and 2024, continuing toplay a key flexibility role in the country’s power system while more

European markets.

variable renewables are integrated into the matrix.

Spain
In 2020 electricity demand in Spain fell by close to 6% year-on-year
to 241 TWh. This was the largest decline seen in two decades,
putting demand at 2003 levels. The economic recovery in 2021 has
been weaker than previously expected, and electricity demand is
set to increase by only around 3% and to remain below 2019 levels.
Renewables accounted for 43% of the electricity mix in 2020,
reaching the highest share among all sources. In contrast, coalaccounted for just 2%, its lowest ever share, and half of the existing
11 GW of coal-fired capacity was retired in just one week in 2020. In
2021, with growing installed wind and especially solar PV capacity,
the renewable generation share reached a new all-time high ofaround 47%, and is expected to keep growing in the coming years.

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IEA. All rights reserved.

In 2021 electricity prices reached levels never seen before, pushed
by higher CO2 and in particular gas prices. December’s average
day-ahead price reached close to EUR 240/MWh, almost five times
higher than the average December values in the previous five
years. In June, when electricity prices started rising, electricityrelated VAT was temporarily reduced from 21% to 10% forcustomers below 10 kW. In September 2021, as prices had
continued to rise, the government issued a Royal Decree-Law
modifying the Electricity Act, including the temporary reduction of
the special tax on electricity (down to 0.5% from 5.1%) and thesuspension of the tax on production (7%). Towards the end of 2021,
measures were extended until April 2022. In addition, thegovernment committed to add EUR 900 million to the previously
planned EUR 1.1 billion annual cross-subsidy from CO2 auctions tothe cost of the power system. Additionally, the Spanish government
passed a decree to temporarily claw back so-called “windfall profits”
from hydro, nuclear, PV and wind producers who were considered
as unduly benefitting from high CO2 and gas prices.

Regional perspective

Electricity Market Report – January 2022

We expect renewable energy output to grow by around 7% annually
between 2022 and 2024. Together with expected demand growth ofclose to 1% during the same period, we expect thermal generation
to decline by 7.5% on average annually, replaced by renewables.

being more than four times higher than the average December
value in the previous five years.
This also affects the UK energy price cap, which limits the price ofdefault energy tariffs for domestic consumers. In October 2021 thecap was raised by 12-13%, and Ofgem, the responsible energy
regulator, expects another significant increase in April 2022.

Consequently emissions fall by almost 50% to 2024 compared withthe pre-pandemic level of 2019.

United Kingdom

Higher wholesale electricity prices, combined with the price cap
restricting the passing through of higher costs to customers,
significantly affected energy suppliers. In the second half of 2021,

In 2021 the United Kingdom saw a strong rebound in electricity
demand (up 5%), returning to around the pre-pandemic level of
2019. Together with exceptionally low wind speeds resulting in a
14% drop in total renewable generation, this led to a 17% increasein gas-fired electricity supply and consequentially a more than 20%
increase in electricity sector CO2 emissions. This was the first rise
since 2012 and follows a decline in emissions of more than 70%
since the year 2000.

25 have exited the market.

As in other European countries, UK electricity wholesale prices
increased significantly in 2021, in particular due to higher gas
prices, low renewable generation and the outage of the IFA
interconnector between France and the United Kingdom since
September. Between 2015 and 2020 annual average day-ahead
prices in Great Britain ranged between GBP 35 and GBP 58 per
MWh (with a maximum monthly average of GBP 64 in March 2018).
From April to December 2021 average monthly prices increased
from GBP 67/MWh to GBP 226/MWh, with the December average

The United Kingdom continues to pursue strong emission reduction
efforts, reflected not least in significant wind capacity additions,which we expect to result in 12% annual growth in wind generation
between 2022 and 2024. CO2 emissions are likely to fallsignificantly through to 2024. This is supported by the country’s
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On 1 January 2021, after the Brexit transition period ended and theUnited Kingdom left the EU single market, the UK emissions trading
scheme (UK ETS) started to operate. Designed as a cap and tradesystem similar to the EU ETS, the UK ETS initially covers energyintensive industries, power generation and aviation. The scheme isintended to make significant contributions to reaching the country’s
Net Zero 2050 target. In December 2021, UK ETS emission
allowances traded at GBP 74 per tonne, around 9% higher than the
EU ETS.

Regional perspective

Electricity Market Report – January 2022

phase-out of unabated coal, due to be completed by October 2024.
Despite the expected decline in nuclear generation by an annual
average of 7% between 2022 and 2024 due to the planned
retirements of Hinkley Point B, Hunterston B and Hartlepool (eachcompetitiveness of coal-fired power plants vis-à-vis gas-fired
generation, which rose by close to 60%. Coal-based power output
declined by 2% year-on-year.
Turkey’s electricity demand is expected to grow by an average rateof close to 4% per year during 2022 to 2024, more than any othermajor economy in Europe. Renewables generation is foreseen toincrease by 13% per year on average, largely driven by improvinghydro availability. The first unit at Akkuyu, the country’s first nuclear
power plant, is expected to start up in 2023/24 with a capacity of
1.2 GW. Thermal generation is set to gradually decline, its share

1.3 GW), gas-fired generation is also set to fall by 6% on average
per year during the same period.
Despite leaving the EU single market, the UK electricity system isclosely connected to the continent. Current plans for Great Britain’s
interconnector capacity foresee an additional 7.1 GW (currently
6 GW) until the end of 2024. The new capacity will help balancevariable renewable generation and thus facilitate the further
decarbonisation of the electricity system.

falling from around 64% in 2021 to close to 50% by 2024.

TurkeyIn contrast with the rest of Europe, Turkey’s electricity consumption
did not decline in 2020, increasing slightly compared with theprevious year. We estimate that electricity demand surged by over
8% in 2021, largely driven by higher economic activity.

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The strong demand growth in 2021 coincided with a steep decline inhydro generation (down by almost 30%) amid severe drought. Thisin turn provided additional market space for thermal generation,
most of which has been captured by gas-fired power plants. Whilecoal import prices increased strongly, oil-indexed gas prices toTurkey rose only moderately in 2021. This reduced the costRegional perspective

Electricity Market Report – January 2022

Renewables replace thermal electricity generation in many European markets
Change in electricity generation (TWh)Change in electricity generation, 2015-2024
60
40
20
0
- 20
- 40

Germany
Coal

FranceGas

Nuclear

Italy
Other non-renewables

Spain

United Kingdom

Renewables

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

- 80

2015

- 60

TurkeyNet change
IEA. All rights reserved.

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IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

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IEA. All rights reserved.

Eurasia

Regional perspective

Electricity Market Report – January 2022

Eurasia records its strongest increase in electricity demand since the demise of the Soviet
Union
Eurasia’s electricity consumption increased by an estimated 6%
year-on-year in 2021, or over 80 TWh – its highest increase inabsolute terms since the end of the Soviet Union. This more thanoffset the 2.2% drop experienced in 2020, when a mild winter andCovid-19-induced restrictive measures weighed on electricity
consumption.

renewable power generation remains slow, the commissioning of
new nuclear plants, including in Belarus and Russia, is set to reduce
the emissions intensity of power generation in the medium term.
Ukraine’s electricity demand increased by 5% year-on-year in 2021,
following a drop of 3% in 2020. This has been largely supported bya strong increase in hydro and nuclear power output, rising by 60%
and 9% respectively. In contrast, thermal generation dropped byclose to 4% in 2021, as tight gas and coal markets weighed on fuelavailability. At the end of October the country’s electricity system
operator reported that total capacity of more than 8 GW (more than
30% of the country’s combined gas- and coal-fired capacity) was
not operating mainly due to a lack of fuel but also equipment
repairs. Ukraine’s gas-fired generation declined by 14% year-onyear in 2021. In our forecast the country’s electricity consumption is
set to increase at an average annual rate of around 1.6% in the2022-2024 period. This is met by higher thermal output, gas- andThe strong rebound in 2021 was partly driven by the recovery ineconomic and commercial activity, with the region’s GDP increasing
by 4% compared to 2020. Most of the demand growth wasconcentrated in the first half of the year, when electricity
consumption rose by close to 7% year-on-year. Thermal generation
met over 65% of the incremental demand, with gas-fired generation
taking the lead. The Russian Federation (hereafter ‘Russia’) alone
accounted for over 70% of the region’s consumption andconsumption growth in 2021. In addition to economic recovery, thecountry experienced a cold and long heating season, which induced

coal-based generation increasing on average by 3.4% and 2.3% peryear respectively through the same period.

higher electricity demand.
In the medium term the region’s electricity demand growth is

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IEA. All rights reserved.

In Kazakhstan electricity consumption rose by an estimated 7%
year-on-year in the first eleven months of 2021. Thermal generation
was the main source of additional generation, led by a strong
increase in coal-fired output, meeting over 80% of the country’s

expected to slow to an annual average of 1.6% between 2022 and2024, Russia accounting for 60% of the increment. Thermal
generation is set to continue to dominate Eurasia’s power mix, at ashare of over 62% over the forecast period. While the deployment ofRegional perspective

Electricity Market Report – January 2022

incremental electricity demand. Lower hydro output wascompensated by a strong increase in wind and solar power
generation, up by 60% and 30% year-on-year in the first eightmonths of 2021. Following the strong growth in 2021, Kazakhstan’s

Sirdarya CCGT plant, with a capacity of 1.5 GW, started at the endof 2020 and the plant is due to be commissioned by 2024. The
country has announced market reforms, with the aim of establishinga competitive wholesale market in the period between 2021 andelectricity consumption is expected to moderate at an averageannual growth rate below 2% in the medium term, largely supported
by expanding gas-fired power generation and renewable sources ofelectricity supply. Kazakhstan has a target of commissioning 3 GW
of gas-fired generation capacity in the next five years. While thegrowing share of renewable and gas-based generation is set to
reduce the power sector’s emissions intensity, coal-fired generationis set to retain its dominant position, accounting for over 65% of the2025.
According to official statements, Turkmenistan’s electricity
generation increased by over 10% year-on-year in the first ten
months of 2021. This was partly driven by higher electricity exports
to neighbouring markets, which rose by over 25% compared to2020, including electricity deliveries to Kyrgyzstan, which started inAugust 2021. Turkmenistan commissioned a 432 MW gas turbine
power plant in the Chardzhov district, primarily targeting its export
markets, including Afghanistan, Kyrgyzstan and Uzbekistan.

generation mix in 2024.
Other markets in Central Asia also recorded strong growth in bothelectricity demand and generation, estimated at 7% up on 2020. In
total, we expect electricity demand in Central Asia to increase at an
average annual rate of 2% per year over 2022-2024. In Uzbekistan

In Belarus electricity consumption grew by an estimated 7% yearon-year in 2021, offsetting the decline in 2020, when demand
dropped by 2.5%. The first unit of the Ostrovets nuclear power plant(1.1 GW capacity) started commercial operation in June 2021. The
second unit is expected to start commercial operations in 2022.
Consequently, nuclear generation meets most of the incremental
demand through the forecast, its share of the power mix reaching

electricity demand rose by an estimated 7% year-on-year in 2021.
This was primarily supported by the country’s large gas-fired power
fleet. The country’s electricity demand is expected to increase on
average by over 3% per year in 2022-2024, additional demandprimarily being met by rapidly growing renewables (including hydro)
and expanding gas-fired power generation. The construction of theover 35% by 2024, primarily at the expense of gas-fired power
output. This is set to significantly reduce the emissions intensity of

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IEA. All rights reserved.

Belarus' power generation over the medium term.

Regional perspective

Electricity Market Report – January 2022

Following a strong recovery in 2021, Eurasia’s electricity demand growth slows to 2024
Electricity demand growth

Development of electricity demand, 2015-2024
7%
6%
5%
4%
3%
2%
1%
0%
-1%
-2%

Eurasia

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2024

2023

2022

2021

2020

2019

2018

2017

2016

-4%

2015

-3%

RussiaDemandDemand forecast
IEA. All rights reserved.

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IEA. All rights reserved.

Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

Nuclear capacity additions reduce the emissions intensity of power generation in the region
Development of emissions intensity, 2015-2024
CO₂ intensity (g CO₂/kWh)

100
80
60
40
20
0
- 20

400
350
300
250

150

- 40

2024

2023

2022

2021

2020

2019

2018

2017

100

2016

- 60

450

200

2015

Change in electricity generation (TWh)Change in electricity generation, 2015-2024

50

Eurasia
Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change

0
2015

2017

Eurasia

2019

2021

2023

RussiaIEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.

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IEA. All rights reserved.

Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

Russia: A gas-fired recovery
Russia’s electricity consumption fell by 2.8% (or 28 TWh) year-onyear in 2020. Mild winter conditions and Covid-19-induced lockdown
measures weighed on electricity consumption in the first half of theyear. Lower demand coincided with higher hydro (up 9%) and

Thermal generation accounted for over 80% of the net increase inelectricity supply in 2021, surging by over 8% year-on-year. Most of
this increase was concentrated in the first price zone. Lower hydrogeneration (down by 14%) was largely compensated by higher

nuclear generation (up 3.3%). This in turn put downward pressure
on thermal generation, which dived by close to 9%. Coal- and gasfired-generation bore the brunt of the decline, while oil-fired
generation increased by close to 50%, as low fuel oil prices induced

nuclear output (up by 3%), while thermal power plants met almost
all the additional demand. The first price zone is largely dominatedby gas-fired power generation. In addition, rising domestic coalprices supported coal-to-gas switching. According to first estimates,
gas-fired generation soared by over 10% year-on-year in 2021. In
contrast, thermal generation dropped by 1% in the second pricezone, as strong hydro output (up by 9%) weighed on the region’scoal-fired power output.

gas-to-oil switching in the power sector.
We estimate that Russia’s electricity consumption increased byabout 6% (or 60 TWh) in 2021, its largest annual growth in absoluteterms since the fall of the Soviet Union. A recovery in industrial andcommercial activity largely supported this growth; Russia’s GDP is
expected to grow by around 5% in 2021. In addition, cold first-

Following strong growth in 2021, Russia’s electricity demand growthis expected to slow to an average of over 1.4% per year until 2024.

quarter and spring temperatures, as well as an early start to the2021/22 heating season, boosted electricity demand further.
Demand growth was higher in the first price zone, which covers thewestern part of the country, consumption increasing there by close
to 7%. In the second price zone, which covers Siberia, electricity
demand grew by an estimated 4% year-on-year. Russia’s growth inpower generation outpaced the increase in demand, supporting
higher exports, which more than doubled in the first ten months of2021 compared to the same period in 2020. This was largely due tohigher deliveries to China, Kazakhstan and the Baltic states.
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IEA. All rights reserved.

The two units of the Kursk II nuclear plant (1.25 GW capacity each)are scheduled to be commissioned by 2024, replacing the four
existing units (1 GW each) planned to retire from 2022. The country
has undertaken a large-scale modernisation programme of its
thermal fleet, with the target to refurbish over 20 GW between 2022
and 2026. According to Russia’s Market Council, this could
decrease the carbon footprint of the power system by 5%.

Regional perspective

Electricity Market Report – January 2022

Gas-fired power generation and nuclear lead Russia’s power generation growth
Change in electricity generation (TWh)Change in electricity generation, 2015-2024
80
60
40
20
0
- 20

2024

2023

2022

2021

2020

2019

2018

2017

2016

- 60

2015

- 40

RussiaCoal

Gas

Nuclear

Other non-renewables

Renewables

Net change
IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.

PAGE | 86

IEA. All rights reserved.

Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

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IEA. All rights reserved.

Middle East

Regional perspective

Electricity Market Report – January 2022

Gas remains the dominant fuel; oil and coal are squeezed by renewables and nuclear
Arab Emirates coming online in April and September, and is
expected to reach over six times 2020 levels by 2024 with the plant
fully commissioned. Renewable power output, which isElectricity demand in the Middle East fell slightly in 2020 as declines
in Gulf Cooperation Council (GCC) countries – especially Saudi
Arabia, the United Arab Emirates and Kuwait – were only partially
offset by rising consumption elsewhere in the region (particularly inIran). Some countries, including Iraq, Lebanon, Syria and Yemen,
faced power shortages and were left with unmet demand. We
estimate that electricity use grew by over 3.5% in 2021 and willcontinue at an average rate of 2% during the 2022-2024 period, due
to population growth, rising demand for air conditioning andseawater desalination, and the expansion of energy-intensive
industries in GCC economies in particular. The residential andcommercial sectors continue to be the main engines of demand
growth, accounting for over half of the rise in the forecast period.
The remaining net rise is split between industry and other uses.

predominantly solar in the region, rose by over one-third to 40 TWh
in 2021 and is set to reach around 60 TWh in 2024, over 4% of total
electricity generation. The pace of additions varies widely across theregion, with the biggest increments being in the United ArabEmirates, Israel and Saudi Arabia, while renewable deployment inmuch of the rest of the region remains slow to non-existent.
Annual power sector emissions in the Middle East fell slightly in
2021 (mainly due to growing nuclear output), but are projected to
grow by 1.7% in total from 2022 to 2024 and reach over
740 Mt CO2. The United Arab Emirates and Israel both saw lower
electricity-related emissions in 2021 and are on course to see afurther drop of over 20% by 2024 (compared with 2021), thanks tonuclear and renewables displacing gas in the United Arab Emirates,and gas and renewables displacing coal in Israel. However, this is
outweighed by rising power sector emissions elsewhere in the

We expect gas – dominant in the region – to maintain a constantgeneration share of around 70% through to 2024. Oil-fired power is
set to drop from 24% of total generation in 2021 to 21% by 2024
(led by declines in Saudi Arabia and Iran). Coal falls from 1.6% to1.3% over the same period, as the closure of a large coal-fired plantin Israel (Orot Rabin) will more than offset production growth fromthe new Hassyan coal-fired plant in the United Arab Emirates.

region, primarily driven by rapidly increasing gas-fired generation.

Nuclear generation in the region more than doubled in 2021 due tothe first two units of the Barakah nuclear power plant in the United

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IEA. All rights reserved.

At the same time, the emissions intensity of power generation fell byover 2% in 2021 and is expected to decline by almost a further 4%
by 2024 (compared with 2021) thanks to the falling share of coaland oil in the region’s electricity mix.

Regional perspective

Electricity Market Report – January 2022

Electricity demand in the Middle East is expected to stabilise in the medium term
Electricity demand growth

Development of electricity demand, 2015-2024
10%
8%
6%
4%
2%
0%

Middle East

Saudi Arabia
Demand

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2024

2023

2022

2021

2020

2019

2018

2017

2016

-4%

2015

-2%

United Arab Emirates

Demand forecast
IEA. All rights reserved.

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IEA. All rights reserved.

Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

Demand in the Middle East is increasingly met by cleaner sources
Development of emissions intensity, 2015-2024
CO₂ intensity (g CO₂/kWh)

100
80
60
40
20
0

700
600
500
400
300

- 20

2024

2023

2022

2021

2020

2019

100

2018

- 60

2017

200

2016

- 40

2015

Change in electricity generation (TWh)Change in electricity generation, 2015-2024

Middle East
Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change

0
2015

2017

2019

Middle East

2021

2023

Saudi Arabia

United Arab Emirates

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.
PAGE | 90

IEA. All rights reserved.

IEA. All rights reserved.

Regional perspective

Electricity Market Report – January 2022

United Arab Emirates

Saudi Arabia

In the United Arab Emirates, electricity demand dropped by 2.4% in2020 compared with 2019 due to the negative impact of Covid-19
on economic activity. We estimate that demand recovered by lessthan 1% in 2021 and growth is expected to remain weak over theforecast period, averaging less than 1% per year during 2022-2024.
Power consumption is hampered by the slow pace of economic
recovery, higher-than-average electricity rates within the region anda slow and gradual return of expatriates (whose numbers in 2020
dropped by an estimated 5% and 8% in Abu Dhabi and Dubai,

Saudi Arabia’s electricity demand fell by almost 1% in 2020 as
Covid-19-related measures limited demand in the commercial
sector and government offices, which was only partially offset bygrowing consumption in the residential and industrial sectors. Powerdemand rebounded sharply and recorded a 10% year-on-yearincrease in the first half of 2021 with the lifting of restrictions andnormalisation of economic activity. For the full year we estimate
6.5% growth. For the period 2022-2024 we expect average growthof around 0.5% per year, driven by a growing number of gridconnections and expanding industrial demand, but tempered byearlier price reforms and modest improvements in efficiency.

respectively, in the wake of Covid-19).
Installed generation capacity across the United Arab Emirates
totalled 33 GW in 2020, of which 92% was gas-fired, 6% solar and
2% coal. The first 1.4 GW block of the 5.6 GW Barakah nuclear
power plant generated some electricity in 2020, but only started
commercial operations in 2021; therefore it was not counted by thenational utility as available capacity in 2020. The completion of theremaining three nuclear blocks at Barakah, three additional 600 MW
coal-fired units in Dubai and the addition of nearly 4 GW of solar
capacity by the end of 2024 will change the UAE electricity mix
considerably. The share of natural gas in the generation mix is set
to drop from around 84% in 2021 to 55% by 2024. At the same time,

Total generation capacity at the end of 2019 was 80 GW, withanother 9 GW scheduled to be added during 2021-2024, of which
5.6 GW are gas-fired and 3.3 GW are renewables (mostly solar).
Gas-fired generation is projected to rise by 19% (21 TWh) by 2024
compared with 2021, while oil-fired output drops 12% (22 TWh) overthe same period. The share of oil-fired generation in the electricity
mix is projected to drop to 38% by 2024 from an estimated 43% in
2021, but remains a long way from meeting the government’s goalof eliminating oil from power generation by 2030. Renewablegeneration is set to expand more than four times 2021 levels andapproach 7 TWh (or 1.6% of total generation) by 2024 thanks to arobust project pipeline, including a 400 MW wind farm (Dumat AlJandal) and 3 GW of solar capacity under development as of 2021.
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IEA. All rights reserved.

the contributions from nuclear (from 7% to 25%), coal (from 3% to9%) and renewables (from 6% to 11%) are all set to grow.

Regional perspective

Electricity Market Report – January 2022

Gas and renewables displace oil in Saudi Arabia, while nuclear and renewables displace gas in
the UAE generation mix
Change in electricity generation (TWh)Change in electricity generation, 2015-2024
50
40
30
20
10
0
- 10
- 20

Saudi Arabia
Coal

Gas

Nuclear

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2024

2023

2022

2021

2020

2019

2018

2017

2016

- 40

2015

- 30

United Arab Emirates
Other non-renewables

Renewables

Net change

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

PAGE | 92

IEA. All rights reserved.

IEA. All rights reserved.

Regional perspective

Electricity Market Report – January 2022

Market trends in selected other Middle Eastern countries
Kuwait’s electricity consumption is expected to grow at an averageannual rate of 2% between 2022 and 2024, driven by increasing
space cooling and water desalination requirements. All incremental

Qatar’s power consumption is set to expand at an annual averagerate of 3.6% during the 2022-2024 forecast period, driven by
population growth, rising demand for cooling and water desalination,and the ongoing expansion of the country’s residential, commercial,industrial and transport infrastructure. Incremental generation will
mainly be fuelled by gas, supported by the completion of the
2.6 GW Facility E project and the ramp-up of production at Qatar’s
Barzan gas field, which is fully dedicated to the domestic market.
Renewables will also generate more than 1 TWh by 2024, following
the phased ramp-up of the 800 MW Al Kharsaah solar project fromgeneration growth is from gas-fired plants, enabled by the recent
completion of the 30 bcm Al Zour LNG terminal. Oil-fired generation
and renewable output are expected to stagnate through to 2024.
We expect Israel’s power demand to expand on average by 3.5%
annually during 2022-2024, supported by population growth,
increased water desalination and electrification of end uses
(especially in the transport sector). Fuelled by the anticipated rampup of production at the Karish gas field from 2022, gas-fired
generation grows by over 26% by 2024 (compared to 2021), while
coal-fired generation falls by almost 70% with the phase-out of thelate 2021 to mid-2022.
Oman’s power consumption is expected to increase at an averageannual rate of almost 3% during 2022-2024, driven in part by thestart-up of a new 230 000 b/d export refinery at Duqm in 2022. Gasfired generation meets around two-thirds of incremental demand.
The rest is largely from renewables, which grow rapidly from a low

2.6 GW Orot Rabin plant by 2024. Renewable generation almost
doubles to reach 11 TWh in 2024, led by continuing solar additions.
Iraq’s electricity consumption is expected to grow at a rapid rate ofbasis to reach 1 TWh by 2024.

over 6% per year through to 2024, as the country progressively
reduces its power deficit with the completion of at least one gas
capture project (Halfaya) and several gas-fired plant revitalisationand expansion projects. Despite ambitious plans to ramp up solar
generation, renewables are not expected to significantly contributeto Iraq’s power requirements in the 2022-2024 period.

Bahrain, where practically all generation is gas-fired, is projected tosee rapid growth in demand at an annual average of almost 5%

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between 2022 and 2024, the result of substantial expansion of gridconnected capacity in 2022.

Regional perspective

Electricity Market Report – January 2022

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Africa

Regional perspective

Electricity Market Report – January 2022

Although slowing, electricity demand is set to continue to grow in Africa
Electricity demand in Africa has rebounded after falling in 2020 due
to the Covid-19 pandemic and its impact on the economy – the IMF
estimated a 1.6% decline in real GDP. We estimate growth inelectricity supply by 5.6% in 2021 and close to 5% in 2022. This isdriven by higher GDP growth (estimated at 5%, due to an
improvement in global trade and commodity prices) and increased
electricity access, as well as new generation capacity, which shouldin 2021 to 26% in 2024). After a slight increase in coal-fired
generation in 2021 and 2022 (about 1% annually), stemming fromnew coal units coming online in South Africa, we expect coal-fired
electricity generation to remain flat in 2023 and 2024.
With around 25 TWh of additional electricity generation by 2024
(compared with 2021), we expect natural gas, the largest source ofelectricity supply in Africa, to have a stable market share of around
38% between 2022 and 2024. Significantly less relevant than coaland gas, oil and oil derivatives had an 8% market share in 2021; we
see a slow decrease in output of below 1% annually on average inthe 2022-2024 period.

alleviate some of the power supply shortages seen across theregion.
However, the discovery of the Covid-19 Omicron variant at the endof 2021 in South Africa (a country accounting for almost 30% of total
power demand in the region) and the subsequently imposed
measures to contain the spread of the new variant could
significantly impact economic and consequently electricity supply
growth. For the period 2022 to 2024 we expect a slowdown inannual growth in demand in Africa, falling to around 3.5% on
average.

The Koeberg nuclear plant in South Africa had one of its units offline
for maintenance during the height of the lockdown in 2020, but
increased availability meant that there was a slight increase innuclear generation in 2021. For the coming years we expect nuclear
generation to remain flat.
As renewables are set to supply the majority of net demand growth
between 2022 and 2024 (more than 60%), we expect the carbon
intensity of electricity generation to decline by almost 2% on
average during the period, reaching about 510 g CO2 per kWh in

The majority of the new capacity due to come online over the
coming years takes the form of a host of renewable and gas
projects that are being deployed across the continent. By 2024 thisresults in an additional 50 TWh of electricity from renewables,
reaching a 26% share of total generation, up from 23% in 2021 andachieving a similar level to coal-fired generation (declining from 28%

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IEA. All rights reserved.

2024.

Regional perspective

Electricity Market Report – January 2022

Electricity demand in Africa is expected to continue growing at moderate rates
Electricity demand growth

Development of electricity demand, 2015-2024
15%
10%
5%
0%
-5%

AfricaSouth Africa

Egypt
DemandAlgeria

Morocco

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

2015

2024

2021

2018

-15%

2015

-10%

Nigeria

Demand forecast
IEA. All rights reserved.

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IEA. All rights reserved.

Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

New renewable and gas generation meets the majority of demand growth in Africa
Development of emissions intensity, 2015-2024
CO₂ intensity (g CO₂/kWh)

50
40
30
20
10
0
- 10

900
800
700
600
500

300

- 30

2024

2023

2022

2021

2020

2019

2018

2017

200

2016

- 40

1 000

400

- 20

2015

Change in electricity generation (TWh)Change in electricity generation, 2015-2024

100

Africa

0
2015

Coal

Gas

Nuclear

Other non-renewables

Renewables

Net change

2017

2019

2021

2023

AfricaSouth Africa

Egypt

Algeria

MoroccoNigeria
IEA. All rights reserved.

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IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

Regional perspective

Electricity Market Report – January 2022

The ongoing capacity shortages, combined with their economic
impacts, have led to declining electricity demand as persistent load
shedding has become the norm over recent years. South Africa isactively trying to address capacity shortages with the procurementof firm capacity as part of the Risk Management IPP Procurement
Programme (RMIPPPP). The auction awarded 2 GW of capacity toa mixture of renewables collocated with batteries, and gas-fired
plants. The majority was awarded to three powerships supplied withliquefied natural gas (LNG). This generation was specified to comeonline by 2022, but unfortunately it has already been delayed due tothe postponement of the deadline for the projects’ financial close. It
has been pushed back to accommodate several delays in theprocess, such as obtaining quotations for grid connection,
generation licences and other permits. Difficulties include the failureof the three powerships to obtain the necessary environmental
permits to generate electricity at three different South African ports,
which are currently appealing the decision by South African
environmental authorities to reject their application. This means thatthe capacity is only likely to come online towards the end of theSouth Africa
Electricity demand in South Africa fell by around 5% in 2020. In thefirst ten months of 2021 it increased by around 3% compared withthe same period in 2020. However, the discovery of the Covid-19
Omicron variant in the country at the end of November and thesubsequent restrictions on international travel could have affected
the recovery in demand. For 2021 we estimate a demand growth ofaround 2.7%.
South Africa continues to struggle with capacity shortages that haveplagued the country’s electricity system since 2014, caused bydeclining availability of its ageing coal fleet and delays to two large
new-build coal plants. The completion of these new builds at
Medupi and Kusile will help address some of the capacity issues as
the final units begin generating over the forecast period. The last ofthem is expected to come online in 2023. There are, however,concerns about their reliability. In August 2021, shortly after the final
unit of the Medupi plant was commissioned, an explosion occurred
which severely damaged the unit. It is not expected to be backonline for over a year, rendering it unusable for an indefinite period.
The commissioning of renewable generation from a previous
renewable auction accounted for the balance of new generation in
2021. The remaining 929 MW of renewable projects are expected toforecast period.
The latest renewable auction (Bid Window 5 of the RE IPP
Procurement Programme) has been concluded, the preferredbidders having been announced at the end of October 2021. The
exact timing of operation is not yet certain, but it is not expected

come online by 2024.

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IEA. All rights reserved.

before 2024.

Regional perspective

Electricity Market Report – January 2022with neighbouring countries. A 3 GW interconnector project was
signed with Saudi Arabia in October 2021, commissioning expected
in 2024, and a memorandum of understanding was signed in thesame month to build a 2 GW interconnector with Cyprus andGreece. Additional projects are under way to further increase
existing cross-border capacity with Libya (from the current 240 MW
to 2-3 GW), supplementing the newly commissioned interconnector
with Sudan (capacity up from 80 MW to 300 MW).

New policy may help address capacity issues in the short term, as
licensing obligations for embedded generation (i.e. demand-side
generation) have been relaxed. They now allow plants that aresmaller than 100 MW to connect to the grid for self-consumption
and for the sale of excess power to the grid without applying for agenerating licence. A number of large industrial customers havealready announced plans to build plants to power their own
operations in response to this evolution in policy. The broader
impact of this announcement on demand remains to be seen;
however, as a country with a major energy shortage, South Africa
could expect to see a boost in demand as capacity issues are

The country currently relies on oil and gas for its electricity supply,with a strong ramp-up of natural gas-fired capacity over recent
years (providing up to 90% of total generation). Egypt has set atarget of 42% of electricity supply to come from renewable sourcesby 2035 as part of its Integrated Sustainable Energy Strategy, withan intermediate 20% share target by 2022. Diversification also
includes the development of the country’s first nuclear power plant,
the 4.8 GW El Dabaa facility, which is expected to start operationsin 2026.

alleviated by projects built outside the traditional auction process.

Egypt
Electricity consumption in Egypt in the first half of 2021 recoveredfrom its 2% dip in 2020, with an estimated growth rate of close to
9% year-on-year. For 2021, we estimate a full-year demand growthof over 8%. Growth in demand for electricity has generally slowed inrecent years as subsidies diminished and prices rose, as part of theEgyptian government’s objective to gradually phase out energy
subsidies by 2025. The latest revision took place in July 2021,
resulting in an average 13% increase in prices for various customer
segments.

Algeria’s electricity consumption has grown at a strong pace inrecent years due to the combination of heavily subsidised tariffs(accounting for two-thirds of production costs on average) and an
ambitious electrification policy – coverage reached 98% of the
population as of the end of 2019. The energy regulator, CREG,
expects in its central planning scenario an average annual growth

The country aims to become a regional electricity hub by developinga more diversified supply mix and multiplying its interconnectors
PAGE | 99

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Algeria

Regional perspective

Electricity Market Report – January 2022

rate of electricity demand of 4.3% to 2030, compared with ancontinue to drive peak capacity requirements in Morocco in the

average of 5.7% per year over the past decade.

coming years.

Electricity supply is heavily reliant on domestic gas resources, which
account for 97% of the production mix. The cost of fuel subsidies,alongside high rates of non-payment, has led to a strong increase in
the national electricity company’s debt and casts a shadow over the

Morocco has seen major growth in renewables over the past
decade, the share of renewable energy in the generation mix
increasing from only 6% in 2008 to around 20% in 2020. This will
only increase over the next few years, as Morocco has alreadysystem’s sustainability, which has been questioned by successive
ministers. The development of renewable production capacity was
identified as an opportunity to alleviate the cost of electricity. The
country’s energy transition strategy sets an objective of 16 GW ofrenewable capacity by 2035, with a medium-term target of 4 GW by2024. At the end of 2021, the Algerian Ministry of Energy Transition
and Renewable Energies selected 11 sites for the installation of
1 GW of solar capacity.

stated its ambitions to expand the share of generation fromrenewables beyond 52% by 2030. This trend continued in 2021 withthe commissioning of new wind (300 MW) and solar PV (130 MW)
projects, which are estimated to increase the share of renewables toover 26%. We expect this growth to continue into the forecast
period thanks to new wind, solar PV and pumped-storage hydroplant set to come online by 2024, according to the Ministry ofEnergy, Mines and Environment. This will help to displace coal, andlater gas, from the generation mix, leading to a 36% share of
renewables by 2024.

The impacts of Covid-19 in 2020 saw annual demand for electricity
decline by over 1.2% year-on-year, with annual peak demand fallingby 1.5% relative to 2019. Both peak demand and demand volume
rebounded in 2021, when we estimate demand to have grown byaround 3%. Meanwhile, a heatwave in Morocco in July 2021 led to a
new record in peak demand in the country (4.3% increase on 2020),
attributed to intensive use of air conditioning and agricultural
pumping for irrigation. Both of these end uses are expected to

Despite the current growth in renewables, 60% of Morocco’s
generation mix was still estimated to come from coal in 2021, while
11% was from gas. A long-standing contract for gas supply from
Algeria to Spain, which transits through Morocco, ended in October
2021, the Algerian president Tabounne confirming that gas exports
will now switch to a route that avoids Morocco, thereby cutting off
Algerian gas to Morocco. Prior to this announcement, Morocco wasalready considering options in case of termination of Algerian
supply. These include short-term options such as using LNG, and

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IEA. All rights reserved.

MoroccoRegional perspective

Electricity Market Report – January 2022

others in the medium to long term relying on the development ofdomestic gas production and new import infrastructure as part of thenational roadmap for the development of natural gas 2021-2050.

Nigeriabottlenecks in the transmission system. As a result, currently only
about 11% of electricity demand is being supplied. In September
2021 for example, Nigeria’s peak served demand was only 3.9 GW,
although the estimated peak demand was 30 GW. This was a resultof peak generation capacity as of September 2021 being only
4.7 GW, which includes capacity for exports.

Access to electricity remains a major issue in Nigeria. An estimated
85 million people have no access to grid electricity, representing
over 40% of the population, one of the largest energy accessdeficits in the world. The Nigerian electricity sector is facing
operational constraints, including insufficient access to natural gas(which accounts for around 80% of electricity generation), lack of
cost-reflective tariffs, inadequate metering of consumers, poor
collection rates and massive debts.
The federal government of Nigeria has initiated reforms in theelectricity sector to increase revenue, including a planned phase-outof tariff subsidies by 2022. Electricity tariffs quadrupled between
2015 and 2020 and another increase is expected at the end of 2021
or early in 2022 to bridge the subsidy gap, which is officiallyestimated at about USD 73 million per month.

An ambitious electricity development plan, the Presidential Power
Initiative, was launched in 2019 with Siemens and the support of theGerman Export Credit Agency, its objective being to raise Nigeria’s
available generation capacity to 25 GW by 2025. Implementation of
the project has been delayed, however, and its first phase, whichtargeted a series of quick actions to debottleneck current
transmission capacity by 2021, was still only in its early preengineering stage as of the end of 2021.

PAGE | 101

IEA. All rights reserved.

Despite an installed capacity of 13 GW, comprising mainly gas andhydro capacity, the Nigerian electricity system suffers from low
generation availability due to gas supply issues in combination with

Electricity Market Report – January 2022

Regional perspective

The development of the generation mix varies significantly between African countries

Egypt

South Africa
Coal

Gas

Nuclear

2024

2021

2018

2015

2024

2021

2018

2015

-6

2024

- 20

2021

-4

2018

- 15

Algeria
Other non-renewables

MoroccoRenewables

2024

-2

2021

- 10

0

2018

-5

2

2015

0

2024

5

4

2021

10

6

2018

15

8

2015

Change in electricity generation (TWh)

20

2015

Change in electricity generation (TWh)Change in electricity generation, 2015-2024

Nigeria

Net change
IEA. All rights reserved.

PAGE | 102

IEA. All rights reserved.

Note: Other non-renewables includes oil, waste and other non-renewable energy sources.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

AnnexElectricity Market Report – January 2022

PAGE | 103

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AnnexAnnexElectricity Market Report – January 2022

Summary table: Demand
2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Africa

732

717

757

842

-2.1%

5.6%

3.6%

Americas

6 166

5 978

6 207

6 373

-3.0%

3.8%

0.9%

4 187

4 054

4 185

4 214

-3.2%

3.2%

0.2%

11 985

12 243

13 23914 919

2.1%

8.1%

4.1%

7 202

7 498

8 2424

9 368

4.1%

9.9%

4.4%

Eurasia

1 421

1 389

1 471

1 543

-2.2%

5.9%

1.6%

Europe

3 601

3 458

3 609

3 704

-4.0%

4.4%

0.9%

2 733

2 614

2 720

2 771

-4.4%

4.1%

0.6%

Middle East

1 123

1 120

1 160

1 236

-0.3%

3.6%

2.1%

World

25 02824 90426 44428 618

-0.5%

6.2%

2.7%

TWh

of which United States
Asia Pacificof which Chinaof which European Union

Notes: CAAGR = compound average annual growth rate. For the entire period the European Union reflects the current 27 member states. Differences in totals are due to rounding.
Source: IEA analysis based on data from IEA (2022), Data and statistics.
PAGE | 104

IEA. All rights reserved.

Regional breakdown of electricity demand, 2019-2024

AnnexElectricity Market Report – January 2022

Summary table: Supply and emissions, world
Breakdown of electricity sector supply and emissions, world, 2019-2024
TWh

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Nuclear

2 790

2 682

2 777

2 869

-3.9%

3.5%

1.1%

Coal

9 914

9 520

10 337

10 415

-4.0%

8.6%

0.3%

Gas

6 346

6 276

6 410

6 549

-1.1%

2.1%

0.7%

Other non-renewables

980

994

1 023

915

1.4%

3.0%

-3.6%

Total renewables

7 015

7 449

7 913

9 906

6.2%

6.2%

7.8%

Total generation

27 04426 92128 43730 654

2.5%

5.7%

2.5%

Mt CO2

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Total emissions

12 603

12 19213 02213 088

-3.3%

6.8%

0.2%

PAGE | 105

IEA. All rights reserved.

Notes: CAAGR = compound average annual growth rate. Other non-renewables includes oil, waste and other non-renewable energy sources. Differences in totals are due to rounding.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

AnnexElectricity Market Report – January 2022

Summary table: Supply and emissions, Asia Pacific
Breakdown of electricity sector supply and emissions, Asia Pacific, 2019-2024
TWh

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Nuclear

647

653

694

815

1.0%

6.3%

5.5%

Coal

7 456

7 465

8 062

8 508

0.1%

8.0%

1.8%

Gas

1 484

1 487

1 511

1 556

0.2%

1.6%

1.0%

Other non-renewables

232

251

262

212

8.0%

4.4%

-6.7%

Total renewables

2 969

3 187

3 516

4 642

7.3%

10.3%

9.7%

Total generation

12 78713 04214 04415 733

3.9%

7.7%

3.9%

Mt CO2

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Total emissions

7 641

7 652

8 211

8 611

0.1%

7.3%

1.6%

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IEA. All rights reserved.

Notes: CAAGR = compound average annual growth rate. Other non-renewables includes oil, waste and other non-renewable energy sources. Differences in totals are due to rounding.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

AnnexElectricity Market Report – January 2022

Summary table: Supply and emissions, Americas
Breakdown of electricity sector supply and emissions, Americas, 2019-2024
TWh

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Nuclear

980

957

940

926

-2.4%

-1.8%

-0.5%

Coal

1 205

953

1 115

906

-21.0%

17.0%

-6.7%

Gas

2 153

2 170

2 150

2 132

0.8%

-0.9%

-0.3%

Other non-renewables

234

209

220

196

-10.9%

5.4%

-3.8%

Total renewables

2 118

2 216

2 302

2 732

4.6%

3.9%

5.9%

Total generation

6 690

6 504

6 727

6 892

-2.8%

3.4%

0.8%

Mt CO2

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Total emissions

2 188

1 935

2 091

1 877

-11.6%

8.1%

-3.5%

PAGE | 107

IEA. All rights reserved.

Notes: CAAGR = compound average annual growth rate. Other non-renewables includes oil, waste and other non-renewable energy sources. Differences in totals are due to rounding.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

AnnexElectricity Market Report – January 2022

Summary table: Supply and emissions, Europe
Breakdown of electricity sector supply and emissions, Europe, 2019-2024
TWh

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Nuclear

848

757

803

742

-10.7%

6.0%

-2.6%

Coal

659

530

590

421

-19.5%

11.3%-10.7%

Gas

762

750

781

783

-1.6%

4.2%

0.1%

Other non-renewables

120

118

122

108

-1.5%

3.4%

-4.1%

Total renewables

1 451

1 559

1 568

1 923

7.4%

0.6%

7.0%

Total generation

3 840

3 714

3 865

3 976

-3.3%

4.1%

1.0%

Mt CO2

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Total emissions

966

837

906

735

-13.4%

8.2%

-6.7%

PAGE | 108

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Notes: CAAGR = compound average annual growth rate. Other non-renewables includes oil, waste and other non-renewable energy sources. Differences in totals are due to rounding.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

AnnexElectricity Market Report – January 2022

Summary table: Supply and emissions, Africa
Breakdown of electricity sector supply and emissions, Africa, 2019-2024
TWh

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Nuclear

13

12

13

13

-6.6%

5.1%

0.6%

Coal

260

246

247

252

-5.3%

0.4%

0.6%

Gas

334

324

339

365

-3.0%

4.6%

2.5%

Other non-renewables

78

72

80

83

-8.5%

11.4%

1.3%

Total renewables

170

186

199

250

9.0%

7.4%

7.8%

Total generation

856

840

878

963

3.1%

4.5%

3.1%

Mt CO2

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Total emissions

484

459

474

494

-5.2%

3.4%

1.4%

PAGE | 109

IEA. All rights reserved.

Notes: CAAGR = compound average annual growth rate. Other non-renewables includes oil, waste and other non-renewable energy sources. Differences in totals are due to rounding.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

AnnexElectricity Market Report – January 2022

Summary table: Supply and emissions, Middle East
Breakdown of electricity sector supply and emissions, Middle East, 2019-2024
TWh

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Nuclear

7

7

17

43

-3.0%

139.9%

37.3%

Coal

23

23

22

19

0.3%

-4.8%

-4.9%

Gas

915

886

913

967

-3.1%

3.1%

1.9%

Other non-renewables

299

326

320

298

9.1%

-2.0%

-2.3%

Total renewables

32

30

41

62

-6.3%

36.1%

15.1%

Total generation

1 275

1 272

1 312

1 389

-0.3%

3.2%

1.9%

Mt CO2

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Total emissions

716

727

732

744

1.5%

0.7%

0.6%

PAGE | 110

IEA. All rights reserved.

Notes: CAAGR = compound average annual growth rate. Other non-renewables includes oil, waste and other non-renewable energy sources. Differences in totals are due to rounding.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

AnnexElectricity Market Report – January 2022

Summary table: Supply and emissions, Eurasia
Breakdown of electricity sector supply and emissions, Eurasia, 2019-2024
TWh

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Nuclear

294

295

310

331

0.2%

5.0%

2.2%

Coal

312

304

302

310

-2.8%

-0.5%

0.9%

Gas

699

660

715

745

-5.6%

8.4%

1.4%

Other non-renewables

16

18

20

18

12.3%

7.7%

-3.4%

Total renewables

274

274

287

298

-0.2%

4.7%

1.3%

Total generation

1 596

1 550

1 633

1 701

1.4%

5.3%

1.4%

Mt CO2

2019

2020

2021

2024

Growth rate
2020

Growth rate
2021

CAAGR
2022-2024

Total emissions

608

583

608

627

-4.0%

4.3%

1.0%

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IEA. All rights reserved.

Notes: CAAGR = compound average annual growth rate. Other non-renewables includes oil, waste and other non-renewable energy sources. Differences in totals are due to rounding.
Source: IEA analysis based on data from IEA (2022), Data and statistics.

AnnexElectricity Market Report – January 2022

Regional and country groupings
Europe – Albania, Austria, Belgium, Bosnia and Herzegovina,

Africa – Algeria, Angola, Benin, Botswana, Cameroon, Congo,
Democratic Republic of the Congo, Côte d’Ivoire, Egypt, Equatorial
Guinea, Eritrea, Ethiopia, Gabon, Ghana, Kenya, Libya, Mauritius,
Morocco, Mozambique, Namibia, Niger, Nigeria, Senegal, South
Africa, South Sudan, Sudan, United Republic of Tanzania, Togo,
Tunisia, Zambia, Zimbabwe and other African countries andterritories.1

Bulgaria, Croatia, Cyprus,5,6 Czech Republic, Denmark, Estonia,
Finland, North Macedonia, France, Germany, Gibraltar, Greece,
Hungary, Iceland, Ireland, Italy, Kosovo,7 Latvia, Lithuania,
Luxembourg, Malta, Montenegro, Netherlands, Norway, Poland,
Portugal, Romania, Serbia, Slovak Republic, Slovenia, Spain,
Sweden, Switzerland, Turkey and United Kingdom.

Asia Pacific – Australia, Bangladesh, Brunei Darussalam,
Cambodia, Chinese Taipei, India, Indonesia, Japan, Korea,
Democratic People’s Republic of Korea, Lao People’s Democratic
Republic, Malaysia, Mongolia, Myanmar, Nepal, New Zealand,
Pakistan, People’s Republic of China,2 Philippines, Singapore, Sri
Lanka, Thailand, Viet Nam and other Asian countries, territories andeconomies.3

Eurasia – Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan,
Kyrgyzstan, Republic of Moldova, Russian Federation, Tajikistan,
Turkmenistan, Ukraine and Uzbekistan.

Slovenia, Spain and Sweden.
Middle East – Bahrain, Islamic Republic of Iran, Iraq, Israel, 8
Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syrian Arab
Republic, United Arab Emirates and Yemen.
North Africa – Algeria, Egypt, Libya, Morocco and Tunisia.
North America – Canada, Mexico and United States.
Southeast Asia – Brunei Darussalam, Cambodia, Indonesia, Lao
People’s Democratic Republic, Malaysia, Myanmar, Philippines,
Singapore, Thailand and Viet Nam. These countries are allmembers of the Association of Southeast Asian Nations (ASEAN).

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Central and South America – Argentina, Bolivia, Brazil, Chile,
Colombia, Costa Rica, Cuba, Curaçao, Dominican Republic,
Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica,
Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad andTobago, Uruguay, Venezuela and other Latin American countries
and territories.4

European Union – Austria, Belgium, Bulgaria, Croatia, Cyprus,5,6
Czech Republic, Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg,
Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic,

AnnexElectricity Market Report – January 2022

Advanced economies – OECD member nations, plus Bulgaria,

5 Note by Turkey: The information in this document with reference

Croatia, Cyprus, Malta and Romania.

to “Cyprus” relates to the southern part of the Island. There is no
single authority representing both Turkish and Greek Cypriot people
on the Island. Turkey recognises the Turkish Republic of Northern

Emerging markets and developing economies – All othercountries not included in the advanced economies regionalgrouping.

Cyprus (TRNC). Until a lasting and equitable solution is found within
the context of United Nations, Turkey shall preserve its position

1 Individual data are not available and are estimated in aggregate

concerning the “Cyprus issue”.

for: Burkina Faso, Burundi, Cape Verde, Central African Republic,
Chad, Comoros, Djibouti, Gambia, Guinea, Guinea-Bissau,
Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Reunion,
Rwanda, Sao Tome and Principe, Seychelles, Sierra Leone,
Somalia, Eswatini and Uganda.
2 Including Hong Kong.
3 Individual data are not available and are estimated in aggregate

6 Note by all the European Union Member States of the OECD and

the European Union: The Republic of Cyprus is recognised by all
members of the United Nations with the exception of Turkey. The
information in this document relates to the area under the effective
control of the Government of the Republic of Cyprus.
7 The designation is without prejudice to positions on status, and isfor: Afghanistan, Bhutan, Cook Islands, Fiji, French Polynesia,

in line with the United Nations Security Council Resolution 1244/99
and the Advisory Opinion of the International Court of Justice on

Kiribati, Macau (China), Maldives, New Caledonia, Palau, Papua

Kosovo’s declaration of Independence.

New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga andVanuatu.
4 Individual data are not available and are estimated in aggregate

for: Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados,
Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica,

8 The statistical data for Israel are supplied by and under the

responsibility of the relevant Israeli authorities. The use of such databy the OECD and/or the IEA is without prejudice to the status of theGolan Heights, East Jerusalem and Israeli settlements in the WestBank under the terms of international law.

Falkland Islands (Malvinas), Grenada, Guyana, Montserrat, Saba,
Saint Eustatius, Saint Kitts and Nevis, Saint Lucia, Saint Pierre andTurks and Caicos Islands.
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Miquelon, Saint Vincent and the Grenadines, Sint Maarten, and theAnnexElectricity Market Report – January 2022

ASEAN

Association of Southeast Asian Nations

GHG

greenhouse gas

ANEEL

Brazilian Electricity Regulatory Agency

IEA

International Energy Agency

CAAGR

Compound average annual growth rate. Throughout
the report we refer to the CAAGR when talking about
average growth.

IMF

International Monetary Fund

IPCC

Intergovernmental Panel on Climate Change

CBAM

Carbon Adjustment Border Mechanism

IPP

independent power producer

CCGT

combined cycle gas turbine

KETS

Korea Emissions Trading Scheme

CCUS

Carbon capture, utilisation and storage

LNG

liquefied natural gas

CEA

Central Electricity Authority (India)

LT-LEDS

long-term low-emission development strategies

CREG

Commission for Electricity and Gas Regulation(Algeria)

NDC

nationally determined contribution

NERC

North American Electric Reliability Corporation (US)CO2carbon dioxide

NZE

net zero emissions

EGAT

Electricity Generating Authority of Thailand

OECD

ERCOT

Electric Reliability Council of Texas

Organisation for Economic Co-operation andDevelopment

ESES

Electricity Security Event Scale

PLN

Perusahaan Listrik Negara

ETS

emissions trading scheme

PPA

power purchase agreement

EU

European Union

REIPPPPEU ETS

European Union Emissions Trading System

Renewable Energy Independent Power Producer
Procurement Programme (South Africa)

FERC

Federal Energy Regulatory Commission (US)RMIPPPP

Risk Mitigation Independent Power Producer
Procurement Programme

GCC

Gulf Cooperation Council

RUPTL

Electricity Supply Business Plan (Indonesia)GDPgross domestic productPVphotovoltaic

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Abbreviations and acronyms

AnnexElectricity Market Report – January 2022

Southwest Power Pool (US)TTF

Title Transfer Facility

UAE

United Arab Emirates

UK

United Kingdom

UK ETS

UK Emissions Trading Scheme

UNFCC

United Nations Framework Convention on Climate
ChangeUS

Units of measurement
Gt CO2gigatonne of carbon dioxide

GW

gigawatt

km

kilometrekWhkilowatt hourMBtu

million British thermal units

United States

Mt CO2

million tonnes of carbon dioxide

VRE

variable renewable energyMWmegawatt

WB

World Bank

MWhmegawatt hourg CO2gramme of carbon dioxide

t CO2-eq

tonne of carbon dioxide equivalentTWhterawatt hour

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SPP

Electricity Market Report – January 2022

Annex

Acknowledgements, contributors and credits
This publication has been prepared by the Gas, Coal and Power
Markets (GCP) Division of the International Energy Agency (IEA).
The publication was led and co-ordinated by Stefan Lorenczik,
Energy Analyst for Electricity.
Stefan Lorenczik, Javier Jorquera Copier, Pablo Hevia-Koch and
Zoe Hungerford are the main authors. The report also benefited
from analysis, data and input from Chiara D’Adamo, Carlos
Fernández Alvarez, Louis Chambeau, Jean-Baptiste Dubreuil, Keith
Everhart, Danhak Gu, Julia Guyon, Craig Hart, Tetsuro Hattori,
Songho Jeon, Kazuhiro Kurumi, Jinsun Lim, Luis Lopez, Akos Losz,
Sara Moarif, Gergely Molnár, Luca Lo Re, Gabriel Saive, Enrique
Gutierrez Tavarez, Peerapat Vithayasrichareon and Jacques
Warichet.

Further IEA colleagues provided valuable input, comments andfeedback, in particular Srivatsan Anand, Heymi Bahar, Paolo
Frankl, Tim Gould, Pauline Henriot, César Alejandro Hernández
Alva, Doyob Kim, Kazuhiro Kurumi, Kevin Lane, Brian Motherway,
Fabian Voswinkel and Brent Wanner.
Timely and comprehensive data from the Energy Data Centre were
fundamental to the report.

Several international experts provided input and/or reviewed thedraft report. Their suggestions and comments were very valuable.
They include: Manuel Baritaud (European Investment Bank), Brent
Dixon (Idaho National Laboratory), Ganesh Doluweera (Canada
Energy Regulator), Michael Hogan (The Regulatory Assistance
Project), Francisco Laverón (Iberdrola), Enrique De Las Morenas
Moneo (ENEL), Manabu Nabeshima (Ministry of Foreign Affairs,
Japan), Emmanuel Neau (EDF R&D), Vasilis Papandreou (ACER),
Enzo Sauma Santis (Pontificia Universidad Católica de Chile),
Fereidoon Sioshansi (Menlo Energy Economics), Carlos Toro
(Ministry of Energy of Chile), Laurens de Vries (Delft University ofTechnology), Matthew Wittenstein (United Nations ESCAP) andRina Bohle Zeller (Vestas).
The individuals and organisations that contributed to this report are
not responsible for any opinion or judgement it contains. Any error
or omission is the sole responsibility of the IEA.
For questions and comments, please contact GCP (gcp@iea.org).

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IEA. All rights reserved.

Keisuke Sadamori, director of the IEA Energy Markets and Security(EMS) Directorate, and Peter Fraser, Head of GCP, provided expert
guidance and advice.

The authors would also like to thank Justin French-Brooks for
skilfully editing the manuscript and the IEA Communication and
Digital Office, in particular Astrid Dumond, Taline Shahinian,
Isabelle Nonain-Semelin, Jad Mouawad, Jethro Mullen, Gregory
Viscusi and Therese Walsh.

This publication reflects the views of the IEA Secretariat but does
not necessarily reflect those of individual IEA member countries.
The IEA makes no representation or warranty, express or implied,in respect of the publication’s contents (including its completenessor accuracy) and shall not be responsible for any use of, or relianceon, the publication. Unless otherwise indicated, all materialpresented in figures and tables is derived from IEA data andanalysis.
This publication and any map included herein are without prejudice
to the status of or sovereignty over any territory, to the delimitationof international frontiers and boundaries and to the name of any
territory, city or area.
IEA Publications
International Energy Agency
Website: www.iea.org
Contact information: www.iea.org/about/contact
IEA. All rights reserved.
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