Global energy demand bounces back, but oil trails behind: IEA

London (Quantum Commodity Intelligence) - Worldwide energy use will surpass pre-Covid-19 crisis levels in 2021, but oil demand will trail behind the recovery, dragged down by gasoline, diesel and especially aviation, finds the International Energy Agency finds in its Global Energy Review 2021 report.

Global energy demand will increase 4.6% in 2021, more than offsetting the 4% contraction in 2020 and pushing demand 0.5% above 2019 levels.

The recovery will be two-paced between sluggish advanced economies and dynamic emerging markets and developing economies.

Energy use in advanced economies will struggle to recover in 2021, remaining 3% below pre-Covid levels.

But the emerging markets and developing economies will use 3.4% more energy next year than 2019.

Despite an expected annual increase of 6.2% in 2021, global oil demand is set to remain around 3% below 2019 levels. 

Oil use for road transport is not projected to reach pre-Covid levels until the end of 2021.

Aviation demand is still projected to be 30% lower in 2021 than 2019.

The snail pace recovery in flying will see aviation demand still 20% below 2019 levels in December 2021.  

Other fossil fuels will also recover.

Natural gas demand is set to grow by 3.2% in 2021, propelled by increasing demand in Asia, the Middle East and Russia, and leaving worldwide demand up 1% on 2019 levels.

Coal demand is on course to rise 4.5% in 2021, with more than 80% of the growth concentrated in Asia.

China alone is projected to account for over 50% of global growth in coal.

Coal demand in the United States and the European Union will also rebounding but is still set to remain well below pre-crisis levels.

Electricity and renewable demand soars

Electricity demand is due to increase by 4.5% in 2021, or over 1,000 TWh.

This is almost five times greater than the decline in 2020, cementing electricity's share in final energy demand above 20%.

Almost 80% of the projected increase in electricity demand in 2021 is in emerging market and developing economies, with China accounting for half of global growth.

Electricity demand in advanced economies will remain below 2019 levels in 2021.

Demand for renewables grew by 3% in 2020 and is set to increase across all key sectors, power, heating, industry and transport, in 2021.

The power sector leads the way, with its demand for renewables on course to expand by more than 8%, to reach 8,300 TWh, the largest year-on-year growth on record in absolute terms.

Solar PV and wind are expected to contribute two-thirds of renewables' growth. 

The share of renewables in electricity generation is projected to increase to almost 30% in 2021, their highest share since the beginning of the Industrial Revolution and up from less than 27% in 2019.

Global wind power is on track to record the largest increase in renewable generation, growing by 275 TWh, or around 17%, from 2020.

Global solar PV electricity generation is expected to rise by 145 TWh, or almost 18%, and to approach 1 000 TWh in 2021.

China is expected to generate over 900 TWh from solar PV and wind in 2021, the European Union around 580 TWh, and the United States 550 TWh.

Together, they represent almost three-quarters of global solar PV and wind output.