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