Global Electricity Review 2021

In 2020, almost every G20 country saw a rise in wind and solar generation and a fall in coal generation. This contributed to the record fall in global coal generation.

In many countries, wind and solar only partly contributed to the fall in coal. It was also caused by a fall in electricity demand. In the US, electricity demand fell 2.5%, the EU-27 fell 3.5%, India fell 2.3%. This—alongside increases in wind and solar generation—meant that coal generation saw particularly large falls in these countries. If electricity demand grows rapidly in 2021, it is possible that wind and solar growth will not be enough to ensure coal continues to fall.

China was an exception, seeing a 4% increase in electricity demand, which meant it was the only G20 country to show a large increase in coal generation (+1.7%), and despite large growth in wind and solar, clean generation was unable to wholly meet increased demand. Only a third of China’s increase in electricity demand was met from gains in wind and solar generation, and another third from increased hydro, nuclear and bioenergy, leaving the need for increased coal generation.

Wind and solar produced 9.4% of the world’s electricity in 2020. Its share has more than doubled from 4.6% in 2015, the year when the Paris Climate Agreement was signed.

A surprising number of G20 countries now produce around a tenth of their electricity from wind and solar: India (8.9%), China (9.5%), Japan (10.1%), Brazil (10.6%), the US (11.6%) and Turkey (12.0%).

Germany and the UK are leading the way, with 33% and 28% respectively. They have become a hotbed of innovation, showing how to successfully integrate huge amounts of intermittent wind and solar into the broader electricity system.

After a slow start in the first half of last decade, South Korea, Argentina and Australia have shown large increases in the last few years. Canada and Italy took a step backwards, with more generation added in the first half of the decade than in the second half.

Saudi Arabia, Indonesia and Russia still had near-zero of their electricity from wind and solar.

Across the last five years, wind and solar power’s combined market share increased by 4.8 percentage points (from 4.6% to 9.4%) and coal’s market share fell by 3.9 percentage points (from 37.8% to 33.8%).

The global market share of most other fuel types has not changed significantly.

Coal remains the world’s single largest power source, generating 33.8% of global electricity in 2020.

Electricity demand rose 11% (+2536 TWh) since 2015, but the increase in clean electricity generation (+2107 TWh) didn’t keep up. That led to an increase in overall fossil generation: gas-fired electricity rose 11% (562 TWh) and coal fell only 0.8% (71 TWh). So although global coal generation fell in relative share, it barely fell in absolute terms. As a result, power sector CO2 emissions were around 2% higher in 2020 than in 2015.

The rise in fossil-free generation was led by wind and solar. Wind grew 92% (+762 TWh), solar 232% (+589 TWh), hydro 13% (+490 TWh), nuclear only 5% (+120 TWh) and bioenergy by 28% (+127 TWh).

Electricity demand across Asia rose rapidly, and fossil-free electricity met only 54% of the rise in electricity demand in China, 57% in India, 37% in Indonesia. Hence the overall rise in fossil generation in those regions. China’s electricity demand rose by 1880 TWh (+33%) from 2015 to 2020, which is more than India’s entire electricity demand in 2020.

Meanwhile in Europe, and especially the US, coal’s fall was caused not only by a rise in clean electricity, but also by a rise in gas generation. Of the 10% rise in global gas generation since 2015, half of that was in the United States.

Many OECD countries are seeing coal collapse. EU-27 coal generation has almost halved since 2015 (-48%), and the US saw a similar fall (-43%). Smaller, more recent falls have happened in Japan, South Korea, Australia, Canada and Mexico.

However, these falls over the last half-decade were almost entirely offset by rises in Indonesia, Turkey, China and India. That meant, even including 2020’s record 4% fall, global coal generation was only 0.8% lower in 2020 than in 2015.

OECD countries saw a combined 23 GW reduction in coal capacity in 2020. This trend means that across the OECD and EU-28, 56% of coal capacity has either been retired since 2010, or is scheduled to retire by 2030. The story in China is very different, where in 2020 alone 9 GW of coal plant retirements were offset by the opening of 39 GW of new coal capacity.

China’s rise in electricity demand is unparalleled, rising by 71% over a decade. China’s per capita electricity demand is now higher than the UK and Italy. Although demand in India and Indonesia has risen substantially, it is still only a third of the global per capita rate. South Korea has one of the highest per capita rates in the world, twice that of China’s and ten times India and Indonesia’s per capita levels.

Fossil-free electricity will meet some of the electricity demand growth, but the extent of this remains to be seen and the risk of falling back on fossil fuels looms large. Asia’s electricity demand growth is perhaps the biggest uncertainty of what will happen to global coal generation in the next 10 years.