Global energy demand experienced a significant surge in 2024, primarily driven by escalating electricity consumption. According to a recent report by the International Energy Agency (IEA), electricity consumption jumped by nearly 1,100 terawatt-hours, marking a substantial 4.3% increase. This growth rate is almost double the annual average of the past decade. The primary factors fueling this surge were record-breaking global temperatures, which drove up demand for cooling technologies, the electrification of transportation, increased industrial activity, and the burgeoning energy needs of data centers and artificial intelligence applications.
Record Temperatures and Cooling Demands
The year 2024 witnessed unprecedented heat waves across the globe, leading to a dramatic rise in the demand for cooling solutions like air conditioning. In many countries, this surge in cooling needs pushed electricity consumption to record levels, straining power grids.
- Global Impact: More than 40 countries, representing approximately 70% of global electricity demand, including major players like Brazil, China, India, Mexico, and the United States, experienced new peak power demand during heat waves.
- Regional Disruptions: Electricity grids in regions with high air conditioning ownership and hot climates were particularly affected. Nearly 80% of countries in Latin America and the Asia Pacific either reached new peak demand records or suffered heat-related grid disruptions.
- European Heat Waves: Europe also felt the impact, with the Balkan region experiencing major power cuts due to a heat wave in June. July saw temperatures reaching 43°C, resulting in record electricity demand in Serbia and Croatia.
- Sub-Saharan Africa: Even in areas with lower air conditioning adoption, such as Sub-Saharan Africa, prolonged droughts combined with severe heat events caused power system outages and rolling blackouts throughout 2024.
The Vicious Cycle: Heat Waves and Fossil Fuel Use
The increased demand for electricity due to extreme heat has created a challenging cycle. Many countries have turned to fossil fuels, particularly coal, to meet the urgent need for power, especially during peak demand periods. This reliance on coal has led to an increase in overall coal demand, contributing to higher carbon emissions.
- Coal Consumption: The IEA’s report indicates that the entire increase in coal demand in 2024 could be attributed to extreme temperatures. China, the world’s largest coal consumer, burned 40% more coal than the rest of the world combined.
- Impact on Emissions: The rise in coal consumption and overall energy demand resulted in a record high for energy-related carbon emissions in 2024. The IEA estimates that if weather conditions in 2024 had been similar to 2023, about half of the increase in global emissions could have been avoided.
The Role of Renewables and Nuclear Energy
Despite the challenges posed by increased energy demand and reliance on fossil fuels, renewable energy sources and nuclear power played a significant role in meeting the growing electricity needs.
- Renewable Energy Expansion: The world installed approximately 700 gigawatts (GW) of new renewable power capacity in 2024, marking the 22nd consecutive year of record-setting growth.
- Combined Contribution: Renewables and nuclear power together accounted for a substantial 80% of the global electricity supply increase. For the first time, they covered 40% of total global electricity generation.
- Specific Technologies: New wind and solar installations accounted for more than 60% of the increase in electricity demand, contributing 670 terawatt-hours. Other sources included increases in gas (170 TWh), coal (90 TWh), and nuclear (100 TWh).
Decoupling Emissions from Economic Growth
The increasing adoption of clean energy technologies is showing signs of decoupling emissions from economic growth. The IEA reports that clean energy technologies implemented since 2019 are now preventing 2.6 billion tonnes of CO2 emissions annually, equivalent to 7% of global emissions.
Other Factors Driving Energy Demand
Besides heat waves, several other factors contributed to the surge in energy demand in 2024:
- Electrification of Transportation: The sales of electric vehicles (EVs) surged by over 25% in 2024, with EVs now accounting for one in every five cars sold globally. This increase in EV adoption has had a notable impact on oil demand, which grew modestly at just 0.8%.
- Growth of Data Centers: The increasing reliance on data centers and artificial intelligence has significantly boosted energy consumption. Installed data center capacity globally increased by an estimated 20%, primarily in the United States and China.
- Industrial Activity: Rising industrial activity also contributed to the increased demand for electricity, particularly in emerging and developing economies.
Impact on Different Energy Sources
The surge in energy demand has had varying impacts on different energy sources:
- Natural Gas: Among fossil fuels, natural gas saw the largest increase in demand, rising by 115 billion cubic meters (bcm), or 2.7%. This increase was primarily driven by rising electricity demand.
- Oil: Oil demand grew more slowly, rising by 0.8% in 2024. Oil’s share of total energy demand fell below 30% for the first time ever, 50 years after it peaked at 46%.
- Coal: Global coal demand rose by 1%, half the rate of increase seen in the previous year. Intense heat waves in China and India, which increased cooling needs, contributed more than 90% of the total annual increase in coal consumption globally.
Grid Resilience and Modernization Efforts
The increased energy demand and the impact of extreme weather events have highlighted the need for grid modernization and resilience efforts.
- Government Initiatives: The U.S. Department of Energy (DOE) has been actively working to modernize the electric grid to reduce the impacts of extreme weather and natural disasters. The Grid Deployment Office (GDO) has announced $14.5 billion in competitive funding selections and formula grants to advance a more affordable, reliable, and resilient grid.
- Grid Resilience Utility and Industry Grants: These grants support the modernization of the electric grid to reduce impacts from extreme weather and natural disasters, funding comprehensive technology solutions.
- State and Tribal Formula Grants: The Grid Resilience State and Tribal Formula Grants provide non-competitive funding to states and Indian tribes to improve the resilience of their electric grids against wildfires, extreme weather, and other natural disasters.
- Transmission Expansion: There is a growing emphasis on expanding transmission infrastructure to support renewable energy integration and enhance grid resilience. NERC’s 2024 Long-Term Reliability Assessment Report highlights a 51% jump in planned transmission projects over the next decade.
- Energy Storage: Battery storage is outperforming expectations, providing flexibility to balance solar and wind variability, particularly during extreme weather and peak demand periods.
Energy Efficiency Measures
Energy efficiency is crucial to alleviate rising heatwave-driven electricity demand. Improving energy efficiency can reduce overall energy consumption and ease the strain on power grids.
- Building Efficiency: Improving the efficiency of buildings can significantly reduce energy consumption. Measures such as better insulation, energy-efficient windows, and smart building controls can help lower cooling needs.
- Appliance Standards: Setting and enforcing energy efficiency standards for appliances, including air conditioners, can reduce electricity demand.
- Smart Grids: Implementing smart grid technologies can improve grid efficiency and enable better management of energy demand.
- Consumer Behavior: Encouraging consumers to adopt energy-efficient practices, such as using programmable thermostats and reducing standby power consumption, can also contribute to energy savings.
Projections and Future Trends
Looking ahead, several trends are expected to shape global energy demand and supply:
- Continued Growth in Electricity Demand: Electricity consumption is expected to continue rising, driven by factors such as electrification, digitalization, and economic growth in emerging economies.
- Dominance of Renewables: Renewables are projected to become the dominant source of energy in the future, with solar and wind leading the way.
- Decoupling of Emissions and Economic Growth: The increasing adoption of clean energy technologies is expected to further decouple emissions from economic growth.
- Importance of Grid Modernization: Investments in grid modernization and resilience will be critical to ensure a reliable and sustainable energy future.
The Challenge of Meeting Climate Goals
Despite progress in renewable energy and energy efficiency, meeting global climate goals remains a significant challenge. Global emissions need to fall substantially by 2030 to limit global warming to 1.5 degrees Celsius, a target that is seen as increasingly unattainable by scientists and policymakers.
Conclusion
The surge in global energy demand in 2024, driven by heat waves and other factors, underscores the urgent need for a comprehensive approach to energy policy. This approach must include investments in renewable energy, grid modernization, energy efficiency, and measures to reduce reliance on fossil fuels. By embracing these strategies, the world can ensure a reliable, affordable, and sustainable energy future while mitigating the impacts of climate change.
