Global Electricity Review: H1-2021

‘Building back badly’: Global power sector emissions soar

Dave Jones

Head of Data Insights

25 August 2021 | 11 min read

About

This report provides a mid-year update to Ember’s annual Global Electricity Review.  It compares the first six months of 2021 (H1-2021) to the same period in 2019 (H1-2019), to show for the first time how the electricity transition has changed as the world rebounds from the impact of the pandemic in 2020.

We have researched monthly electricity data to June 2021 for 63 countries covering 87% of the world’s electricity production. We have made this data available in full for all to use.

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Executive summary

‘Building back badly’: Global power sector emissions soar

  • 01

    Rising global electricity demand outpaced growth in clean electricity, which led to an increase in coal power, raising CO2 emissions

    Global power sector emissions rebounded in the first half of 2021, increasing 12% from the lows seen in H1-2020, so that emissions are now 5% above the pre-pandemic levels of H1-2019. Global electricity demand also rose by 5% in the first half of 2021 compared to pre-pandemic levels, which was mostly met by wind and solar power (57%) but also an increase in emissions-intensive coal power (43%) that caused the rise in CO2 emissions. Gas was almost unchanged, while hydro and nuclear saw a slight fall. For the first time, wind and solar generated over a tenth of global electricity and overtook nuclear generation.

  • 02

    No country has yet achieved a truly ‘green recovery’ for their power sector

    No country has yet achieved a truly ‘green recovery’ for their power sector, with structural change in both higher electricity demand and lower CO2 power sector emissions. Several countries including the US, EU, Japan and Korea achieved lower power sector CO2 emissions compared to pre-pandemic levels – with wind and solar replacing coal – but only in the context of suppressed demand growth. Countries with rising electricity demand also saw higher emissions, as coal generation increased as well as wind and solar. These ‘grey recovery’ countries are mostly in Asia: China, Bangladesh, India, Kazakhstan, Mongolia, Pakistan and Vietnam.

  • 03

    China needs to urgently expedite its electricity transition.

    China’s electricity demand rose by 14% from H1-2019 to H1-2021 and is approaching EU per capita levels. Over two-thirds (68%) was met by coal power and the rest by wind and solar (29%). China was responsible for 90% of the world’s increase in electricity demand and 43% of the world’s increase in wind and solar during this period. It added more coal power (+337 TWh) than the EU’s total coal generation in H1-2021. As a result, China’s share of global coal generation rose from 50% in 2019 to 53% in H1-2021.

Global electricity emissions bounce back above pre-pandemic levels

Catapulting emissions in 2021 should send alarm bells across the world. We are not building back better, we are building back badly. A super-fast electricity transition this decade is critical to limit global heating to 1.5 degrees. The electricity transition is happening but with little urgency: emissions are going in the wrong direction.

Dave Jones Global Programme Lead, Ember

Developing Asia must focus its attention on meeting all demand growth with new zero-carbon electricity as a first initial step of the region’s journey towards 100% clean electricity before mid-century. Developing Asia can leapfrog fossils and move straight to cheap, clean renewables. But this is contingent on whether the region can further accelerate its inexorable march of clean electricity while at the same time use electricity more efficiently.

Dr Muyi Yang Senior Analyst, Asia, Ember

Global power sector

Power sector CO2 emissions rise

Global power sector CO2 emissions were 5% higher in the first half of this year, compared to the first half of 2019, prior to the Covid-19 pandemic. Electricity demand also rose by 5%.

The chart below shows that in early 2020, when much of the world was in lockdown, electricity demand was 3% lower than 2019 levels and with 7% less CO2 emissions. By the second half of 2020, global CO2 emissions had returned to pre-pandemic levels as electricity demand bounced up.

But it was only in the first six months of this year that has seen much higher electricity demand levels, which drove a rise in coal generation and therefore a big rise in CO2 emissions. Both CO2 emissions and electricity demand were 5% higher in H1-2021 compared to H1-2019. The latest data shows the trend is still rising: power sector CO2 emissions were 7% higher in June 2021 than June 2019, as electricity demand continued to rise further.

It is important to note that Ember’s global estimate misses some key fast-growing countries that do not have data available, including Indonesia and the Philippines which may mean our data even underestimates both the rise in electricity demand and rise in CO2 emissions. The rising electricity demand is setting records, including in China, India, Iran and Turkey.

CO2 emissions rose because growth in clean electricity did not match the rise in demand. Wind and solar met 57% of the demand rise, but coal met the remaining 43%.

The chart below shows an addition of 332 TWh of wind and solar and 254 TWh of coal was needed to meet the 5% rise in global electricity demand from H1-2019 to H1-2021.

Wind generation rose by 26% and solar generation rose by 46%. Coal generation rose by 5.8%, picking up the rest of the electricity demand increase simply because the rise in clean electricity generation didn’t match the rise in electricity demand.

Remaining generation from other fuel sources fell very slightly in aggregate.  Hydro generation recorded a slight fall (-2.5%) because of worse hydrological conditions and minimal levels of newly built hydro outside China. Bioenergy generation increased by 9%. Nuclear generation fell by 2% compared to pre-pandemic levels, as closures at older plants across the OECD exceeded the new capacity in China. Gas generation was almost unchanged (+0.5%) as rises in Turkey and Korea were offset by falls in Australia, Russia and Italy.

Global Trend
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Wind and solar are driving the growth in clean electricity. For the first time wind and solar generated over a tenth of global electricity, and also for the first time overtook nuclear generation.

The chart below shows wind and solar generated 10.5% of the world’s electricity in the first half of 2021. The upwards trajectory of wind and solar is a rapid one: more than doubling from 5% of the world’s electricity as recently as 2015. It is the first time that wind turbines and solar panels generated more than all the world’s nuclear power plants. Nuclear’s share of global electricity has remained largely unchanged in the same period, as few new plants are being built outside China, and older nuclear plants closed in OECD countries.

Rising CO2 emissions show that the global electricity transition is so far off track that it is putting 1.5 degrees at risk.

The chart below plots the world’s progress since 2019, and where the power sector needs to be by 2030, according to the IEA’s Net Zero 2050 Roadmap . The IEA NZE pathway shows a 50% rise in global electricity demand by 2030, simultaneous to a 57% fall in power sector CO2 emissions, compared to 2019. The power sector transition is very important to increase the chances of keeping global heating to 1.5 degrees. The IEA pathway shows that over half (54%) of the total emissions cuts this decade come from ending coal power alone. Yet coal power is rising, when it needs to be rapidly falling.

Worlds electricity transition is moving in the wrong direction for 1.5 degrees

Green recovery?

No country achieved a 'green recovery' in the power sector

No country saw both notably higher electricity demand and notably lower power sector CO2 emissions.

Many countries have pledged to ‘build back better’ and propel their economies into a new green normal. However, the analysis shows that no country has yet achieved a truly ‘green recovery’ for their power sector, with structural change in both higher electricity demand and lower CO2 power sector emissions. Although Norway and Russia appear in the ‘green recovery’ quadrant, this is due to temporary factors – mostly better rains giving higher hydro generation – rather than a significant structural improvement in the electricity sector.

There are two country groupings. First, countries that had a ‘grey recovery’, with high electricity demand growth, which was met in part with wind and solar, but also in part with extra coal generation, leading to higher power sector CO2 emissions. Second, countries that saw lower CO2 emissions, as wind and solar replaced coal; however, they didn’t reach our definition of a ‘green recovery’, as they did not also have rising electricity demand. These are examined more below.

Many countries had a ‘grey recovery’

Many countries saw high electricity demand, which  was met in part with wind and solar, but also in part with extra coal generation, leading to higher power sector CO2 emissions. The ‘grey recovery’ countries are mostly in Asia: Mongolia, China, Bangladesh, Vietnam, Kazakhstan, Pakistan and India.

Note: we are excluding Argentina, Chile and Turkey, who saw higher CO2 emissions mostly because of temporarily lower hydro electricity production. China features in a separate section below.

The chart below shows that the ‘grey recovery’ countries all had growth in wind and solar generation, but this didn’t keep up with rising electricity demand, which meant coal generation – and therefore CO2 emissions – also rose.

China

China’s fast-rising electricity demand means even a big rise in clean electricity generation could not keep up, pushing up power sector CO2 emissions.

China’s electricity demand rose by 14% from H1-2019 to H1-2021 and is approaching EU per capita levels. Only 29% of that rise in demand was met by wind and solar; over two-thirds (68%) was met by coal power. That pushed up China’s power sector CO2 emissions by 14% from H1-2019 to H1-2021. China’s electricity changes are dwarfing the rest of the world: it saw 90% of the world’s increase in electricity demand and 43% of the world’s increase in wind and solar during this period. And where coal power dropped in the rest of the world in aggregate, China coal power increased by 337 TWh: more coal power than the EU’s total coal generation in H1-2021. As a result, China’s share of global coal generation rose from 50% in 2019 to 53% in H1-2021.

Mongolia

Mongolia’s electricity demand rose by the fastest of any 64 countries we analysed, up 17% in H1-2021 versus H1-2019. The increase was met mostly with coal generation.

Just 23% of this rise in electricity demand was met with wind and solar; 77% was met with additional coal generation. This led to an increase in CO2 emissions of 14%.

Bangladesh

Bangladesh was the only country which saw electricity demand growth met almost entirely from fossil fuels.

Bangladesh’s electricity demand rose by the third fastest of any 64 countries we surveyed, up 13% in H1-2021 versus H1-2019, just behind Mongolia and China. Just 2% of the electricity demand growth was met with additional wind and solar generation, and 98% was met by additional fossil fuel generation. Electricity demand increased by 4.5 TWh; wind and solar increased by just 0.8 TWh, coal generation by 1.9 TWh and other fossil generation by 2.5TWh. This led to an increase in CO2 emissions of around 25%.

Vietnam

Vietnam was the only ‘grey recovery’ country where solar and wind met all the increase in electricity demand. However, power sector CO2 emissions still rose 4% because of a switch from gas to coal generation.

Vietnam’s electricity demand was 10% higher in H1-2021 compared to H1-2019. The rise in demand (+12 TWh) was more-than-matched by a rise in solar (+13 TWh), and also wind rose slightly (+0.7 TWh). A rise in coal generation (+7 TWh) was offset by a fall in gas generation (-7 TWh).

Kazakhstan

Kazakhstan saw wind and solar meet only 26% of the rise in electricity demand; 61% was met by coal.

Electricity demand was 9% higher in H1-2021 compared to H1-2019. The only rise in clean electricity was from wind and solar, which met 26% of the demand growth. Coal met 61% and increased gas generation met the rest. That led to power sector CO2 emissions rising by about 8%.

Pakistan

Pakistan was the only country besides Bangladesh that saw no increase in wind and solar generation, simultaneous to a rise in electricity demand.

Pakistan’s demand increased in the first half of 2021 to  8% over pre-pandemic levels. Over this two year period, hydro, bioenergy and other renewables as well as nuclear both increased by 2 TWh, but a switch from gas (-6 TWh) to coal (+7 TWh) meant that power sector emissions increased by 17%. Pakistan electricity per capita is only a fifth of the global average. It’s vital that any future surge in electricity demand is met with clean electricity to prevent power sector CO2 emissions from rising substantially.

India

In India, the continued impact of the pandemic in H1-2021 kept electricity demand muted and coal rises minimal.

Electricity demand in H1-2021 was only 3% higher than H1-2019 levels; one of the lowest increases in developing Asia as pandemic restrictions continued. Almost three-quarters (72%) of India’s increase in demand was met by growth in solar (+47%) and wind (+9%). However, coal generation increased by 4%, to fill the remaining gap in demand and also to fill reduced hydroelectricity generation, almost returning to its 2018 peak.

Many countries saw lower CO2 emissions, as wind and solar replaced coal. However, this was not at the same time as rising electricity demand. As electricity demand rises in the future due to increased electrification, these countries will need more clean electricity to maintain the same rate of CO2 falls. Notable are the US, the EU, Japan and Korea.

United States

The US came out of the pandemic with only slightly cleaner power than it went in with.

Wind and solar generation rose to become 13.7% of US electricity generation in H1-2021, up from 10.1% in H1-2019; however slight falls in hydro and nuclear generation meant clean generation in total rose only by 3%. Electricity demand in 2021 rebounded back to similar levels (-0.3%) as before the pandemic. That meant fossil generation needed fell only slightly: H1-2021 coal generation was only 7% lower than H1-2019; meanwhile gas generation was almost exactly unchanged. That led to a slight fall of 4% in US power sector CO2 emissions.

European Union

The EU came out of the pandemic with cleaner power than it went in with, even as electricity demand bounced back.

Power sector CO2 emissions in H1-2021 were 12% below the first half of 2019, coal generation fell by 16%, continuing its long-term decline. This was driven by a substantial increase in wind and solar generation over the two-year period of 22 TWh (+9%); these two sources now make up over 20% of electricity generation in the EU-27. While clean electricity reached the milestone of now producing two-thirds of the EU-27’s power, in our separate half year European Electricity Review, we show that clean electricity still isn’t rising fast enough to meet the EU’s own targets.

Japan

Japan has seen only a small fall in CO2 emissions, as clean electricity has barely grown since 2019.

Electricity demand has returned to near pre-pandemic levels, with electricity demand in H1-2021 just 0.4% below H1-2019 levels. However the build-up of renewable generation since 2019 has been slow – it’s come mostly from solar (+10 TWh) and bioenergy (+8 TWh); much of this clean electricity was offset by a fall in nuclear generation. That left coal generation unchanged from H1-2019 to H1-2021; gas generation was only down a little, meaning power sector CO2 emissions fell only 2%.

South Korea

South Korea’s electricity demand bounced back, but total clean electricity generation barely rose, leaving fossil generation at the same level as pre-pandemic.

Electricity demand was almost unchanged (-0.03%) in H1-2021 versus H1-2019. However, across that time, clean electricity generation rose by less than 1%. There were small increases in wind and solar, although bioenergy fell; hydro and nuclear generation were unchanged. This left fossil generation unchanged. In our estimation, CO2 emissions were 7% lower in the first half of 2021 compared to the same period in 2019, as there was a large switch from coal (-14 TWh) to gas generation (+14 TWh). However, our CO2 methodology estimates only the CO2 burnt at the power plant; when the methane leaks from the LNG are included, that saving in CO2 would be much smaller.

China's electricity transition

China needs to urgently expedite its electricity transition

From H1-2019 to H1-2021, 43% of the world’s increase in wind and solar generation, and 90% of the world’s increase in electricity demand was from China.

The chart below shows the change from H1-2019 to H1-2021 is undeniably dominated by China’s rise in electricity demand. Wind and solar generation growth met 29% of China’s increase in electricity demand, while 68% was met with coal. The final 2% was met by remaining generation; the increase in nuclear generation was offset by lower hydro generation from worsened hydro conditions, and bioenergy and gas rose a small amount.

Electricity transition is gaining momentum in China, as the country sets itself the ambitious goal of being carbon neutral before 2060. Notwithstanding this momentum, the electricity transition in China is not happening fast enough, as the rebound in electricity demand outpaced the growth of renewable generation. That meant coal generation was needed to fill the gap, increasing 15% in H1-2021 compared to H1-2019. Coal generation fell in the rest of the world in aggregate. The rise in China’s coal generation was 337 TWh; more than the EU’s total coal generation of 184 TWh in H1-2021.

China’s fast-rising electricity demand per capita is approaching the EU’s level.

The chart below shows that since 2000, China’s electricity per capita has risen 6-fold. China’s electricity demand in H1-2021 was 14% higher than in H1-2019. Out of the 64 countries analysed, this was the second fastest rise in electricity demand, second only to Mongolia at 17%. In July 2021, new electricity demand records were set in at least 11 provinces. Efficiency improvement can be a key enabler for expediting China’s pace of electricity transition.

China’s share of global coal generation was 53% in H1-2021.

The chart below shows that there was a big step-up from 50% in 2019 to 53% in 2020. It held steady in H1-2021 as other countries caught up from the lows in 2020. Asia in total was 80% of the world’s coal generation in H1-2021. Much of China’s growth in market share happened in 2020, as China’s coal generation remained unchanged in 2020, whilst coal generation collapsed elsewhere. But as coal bounced back across the world, China’s coal generation also continued to rise and that maintained its high market share of coal into 2021.

Conclusion

It's a long, but urgent journey to 100% clean electricity

The IEA’s Net Zero 2050 Roadmap shows that advanced countries must get to 100% clean electricity by 2035, and all countries by 2040. The EU and the US are slowly rising to this challenge, as the EU’s Fit for 55 package assures a fast step-up in clean electricity and Joe Biden pledged 100% clean electricity by 2035. China and India’s task is harder: their electricity demand is rising faster, and they have a lower proportion of clean electricity to start with. Wind and solar break the barrier of a tenth of the world’s electricity generation – the electricity transition is happening, it’s just not happening fast enough.

More than any other sector this decade, the electricity transition will define how low we can keep global temperature rises. But rising CO2 emissions right now is a huge red flag that the world is off-course for 1.5 degrees.

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