The world continues to electrify, leading the power sector to play an increasingly central role in the global energy system.
The growth in final electricity demand is similar in all three scenarios, growing by just under 2% p.a., such that demand expands by around 80% by 2050.
The extent to which the energy system electrifies is greatest in Rapid and Net Zero as the progressive decarbonization of the energy system leads to increasing amounts of final energy use being electrified. The share of electricity in total final consumption increases from a little over 20% in 2018 to 45% in Rapid by 2050 and over 50% in Net Zero, compared with just 34% in BAU. The growth of electricity demand in BAU is supported by stronger overall growth in energy consumption than in the other two scenarios.
The energy required to meet the growing use of electricity for final consumption is the dominant source of incremental demand for primary energy in all three scenarios. As a result, the share of primary energy that is absorbed by the power sector increases from 43% in 2018 to around 60% by 2050 in Rapid and Net Zero and to a little over 50% in BAU.
The vast majority of the growth in electricity demand in all three scenarios is driven by emerging markets, led by developing Asia (China, India, and Other Asia) and Africa, as increasing prosperity and living standards underpin higher electricity consumption.
The increase in electricity use in Rapid and Net Zero is broadly based across all three sectors (industry,transport and buildings) of the economy, with electricity used in the transport sector rising most strongly as increasing amounts of road transportation are electrified (see Transport).
In contrast, the slower gains in energy efficiency in buildings and industry in BAU means these sectors account for around 80% of the growth in power demand, with a more subdued increase in transport.
The growth of global power generation is dominated by renewable energy.
Renewable energy, led by wind and solar power (and including biomass and geothermal), more than accounts for the entire growth in global power generation in Rapid and Net Zero and for around three-quarters of the growth in BAU.
The increasing cost of balancing the intermittency associated with the use of wind and solar power as their share rises causes the pace at which they penetrate the power sector to slow in the 2040s in Rapid as their share of global power rises above 50%. Similarly, the share of wind and solar power in Net Zero begins to flatten out in the 2040s as it rises above 60%.
The main fuel to lose ground is coal, with the share of coal-fired power generation in global power falling from 38% in 2018 to less than 3% in 2050 in Rapid and Net Zero, and to around 20% in BAU.
The use of gas in the power sector increases during the first half of the Outlook in Rapid as it gains share from coal but falls back close to its 2018 level by 2050 as the use of renewables accelerate. The initial growth of gas in Net Zero is shorter lived and the subsequent decline sharper. In contrast, the use of gas in BAU increases broadly in line with overall power demand, with its share in global power generation edging down only slightly. By 2050, roughly half of the natural gas used to generate power in Rapid and around 90% in Net Zero is used in conjunction with CCUS.
The changes in the fuel mix, combined with the increasing use of CCUS, means the carbon intensity of power generation falls by over 90% in Rapid, compared with just 50% in BAU. As a result, despite the substantial increase in power generation, carbon emissions from the power sector decrease by over 80% in Rapid, compared with just 10% in BAU. In Net Zero, the use of bioenergy combined with CCUS (BECCS) means that net CO2 emissions from the power sector are negative by 2050.
The challenge of decarbonizing the power sector in economies and regions in which there is strong growth in electricity demand is illustrated by the outlook for the Indian power sector.
Electricity consumption in India increases robustly in all three scenarios, growing between 4.0-4.6% p.a. over the Outlook, as improving prosperity and living standards boost industrial and residential demand.
In BAU, wind and solar power generation increase more than 20-fold by 2050, growing at an average rate of 10% p.a.. Despite that, Indian coal-fired power generation doubles over the Outlook in BAU, requiring more than 100 new coal-fired power plants to be built over the next 15 years.
The pace and extent of the decarbonization of power is greater in Rapid, with coal power generation falling by around 40% by 2050. Wind and solar power generation grow by around 30-fold and 60-fold respectively, and gas over 13-fold.
However, even in Rapid, Indian coal-fired power generation increases by around a third over the next 10 years or so before subsequently declining. This requires around 50 new coal-fired power stations to be built in the 2020s, with the likelihood that some of these power stations become uneconomic as coal generation subsequently declines. A similar near-term increase in coal generation, albeit less pronounced, is apparent in Net Zero.
One option to avoid any increase in Indian coal-fired power generation would be for wind and solar power to accelerate even more quickly over the next 10 years, averaging around 45 GW per year, compared with 30 GW in Rapid and an average of 3 GW since 2000. This is illustrated by ‘Alternate case 1’ above.
Another alternative (as shown by Alternate case 2) would be to bring forward some of the growth of gas-fired power generation that happens later in the Outlook. If gas power generation is increased sufficiently to prevent any increase in coal generation, this would reduce carbon emissions by around 2 Gt CO2 over the next decade relative to Rapid.