Slowdown in Global Electricity Demand Expected Amid Economic Uncertainty

Feb 09, Raleigh, NC - The demand for electricity is estimated to have slowed down to 2 percent in 2022, reflecting the tepid economic growth and high energy prices caused by the Russian-Ukraine crisis.

In the Asia Pacific region, demand is expected to be driven by an increase in demand from China and India, while in the Americas, demand is expected to increase by 1 percent in 2023.

On the other hand, the output of renewable energy generation is expected to grow by 10 percent in 2022, supported by a record number of new installations in 2021 and 2022 post-COVID-19.

The output of renewable energy generation is also expected to increase in 2023, driven by high energy prices in Europe and the EU's willingness to reduce its dependence on Russia for natural gas for power generation, with a growth rate of 6-10 percent.

In terms of prices, wholesale electricity prices in the U.S. are expected to range between 7 and 8 U.S. cents/kWh during 2023, which is 1-3 percent higher than 2022, due to expected increases in thermal generation costs.

However, electricity prices in Europe are expected to be volatile, as they depend on natural gas for 30 percent of their electricity generation and natural gas supplies can be volatile owing to geopolitical events.

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Rob McMurtrie
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