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Low-carbon energy sources will account for almost half of the world’s electricity by 2026up from 39% in 2023, according to a new report (pdf) by the International Energy Agency (IEA). Despite an anticipated 3.4%y-o-y hike in global electricity demands over the next three years, the share of renewables’ in the global energy mix is set to rise 7%, to reach 37% in 2026. The predicted surge in low-carbon power production comes on the back of forecasts of nuclear energy generation reaching an all-time high, in parallel to continued renewables and EV expansions, the IEA says.
Global fossil fuel generation set to decline to lowest levels in six decades: The global pipeline of renewables projects planned over the next three years, along with pre-existing facilities and nuclear plants, are expected to drive down global fossil fuel consumption from 61% in 2023 to 54% in 2026 — the lowest rates since the IEA began taking records in 1971.
Record high nuclear output projected: The global atomic power declaration during COP28 — which has seen 20 countries commit to triple the world’s nuclear energy production by 2050 — is expected to bear fruit over the next three years, with planned expansions by France, China, India, South Korea in the works. Nuclear energy production is expected to rise by 3% y-o-y through 2026, helping drive down coal consumption by 1.7% annually, the IEA notes. The UK has been the latest to ramp up nuclear expansions, channeling an additional GBP 1.3 bn (c.USD 1.65 bn) toward establishing a 3.2 GW plant with a GBP 2.6 bn investment ticket.
Nuclear will also help decarbonize MENA: CO2 intensity dropped by 2.3% in 2023, as the regional push for nuclear power led by the UAE gained pace, the IEA notes. Over the 2024-2026 outlook period, CO2 intensity is forecast to plummet an additional 1.7% y-o-y as the nuclear and renewables push continues to gather steam.
The UAE tops the list for regional decarbonization forecasts: In the UAE, renewables rose 3% y-o-y in 2023 and are on track to account for 12% of electricity generation in 2026 — more than double the 2022 output. Nuclear generation — which grew by about 70% in 2023 on the back of the Barakah Nuclear Energy Plant developments — is predicted to decrease reliance on natural gas by 6% in 2026, down from the current 70% share, the IEA says. The UAE saw its power emissions drop 11% in 2023, with forecasts of a further 9% decrease in 2024 as Barakah becomes fully operational. However, the IEA warns that a gradual increase in emissions is expected after it reaches a peak low in 2024, as a result of increased energy demand that will only partially be met by renewables, the IEA notes.
Oman’s solar drive is similarly expected to push down greenhouse output: Oman’s electricity demand is expected to rise 3% from 2023 levels, which were already up 2.5% y-o-y, but the Sultanate’s planned 1 GW Manah I and Manah II PV farms — due to kickoff operations next year — would almost triple renewables production to reach 8% of the national power mix by 2026, bringing down gas reliance by 5% in the same time period, the IEA adds.
Morocco will source its rising energy demand from renewables: Though Morocco is expected to see its national electricity demand rise by an estimated 3.1% by 2026, the country’s plans to triple appropriations toward renewables projects between 2023-2027, together with the addition of the 400 MW Noor Midelt II and the 400 MW Noor Midelt III farms once completed, are expected to get the country to meet its 7 GW renewable energy by 2027, the IEA notes.
AND- Egypt is also showing potential: Electricity demand in Egypt was up 1.5% y-o-y in 2023, but national subsidies that encouraged substituting oil with natural gas for fuel, led to a 1.2% drop in yearly emissions intensity levels, the IEA notes, adding that the state’s target to slash energy subsidies could put downward pressure on demand growth beyond 2026. Though Egypt is expected to see its demand increase 2% on average over the next 3 years, its plan to add 10 GW of renewables between now and 2028 could see the share of green energy in its power mix rise to 13% — up from the current 11% — by 2026, according to the IEA.
But others are still lagging behind: Kuwait — which has an installed power capacity of 20 GW — sources only 70 MW of its energy from renewables, including its Shagaya solar plant. Although Kuwait is committing to sourcing 15% (or 14 GW) of its power from renewables by 2030, its expansions — including a plan to increase Shagaya’s power output to 4.5 GW — are not scheduled for operation before 2027. Meanwhile Saudi Arabia, which is the world’s largest operator of carbon-intensive desalination, is expected to see a 2.6% boost in electricity demand over the next 3 years, the share of clean energy’s is predicted to rise 3% from 2023 levels, to comprise 4% of its cumulative generation by 2026, the IEA notes. Algeria — which as of the end of 2023 secured no tenders for renewables projects — is similarly forecast to see its power sector’s emissions rise by 4.5% annually between 2024-2026, with gas generating 99% of its electricity over the same period, according to the IEA.
MENA outlook sees a fossil fuel drop: Overall in the Middle East, fossil fuels are set to drop from 93% of the regional power mix to 90% by 2026,while in Africa, the agency sees electricity consumption rising 4% through to 2026, with more than 60% of demand being met from renewables.
On a global level, China will have the last word: More than half of the global renewables expansion over the next 3 years is set to occur in China, which accounts for more than half of global demand, the IEA said in its annual coal market report last month. The planned clean energy additions are expected to reduce coal demand in the country in 2024 before it plateaus through 2026. That said, the outlook for coal in China will be “significantly affected in the coming years by the pace of clean energy deployment, weather conditions, and structural shifts in the Chinese economy,” according to the IEA.
If IEA projections hold true, we could see a significant emissions drop: Global electricity-linked carbon output is expected to plummet 2.4% in 2024 after increasing by 1% in 2023, the IEA notes, forecasting a further 0.5% decline in both 2025 and 2026, barring economic shocks and government policies that could change the projections.
