2024 Energy Industry Forecast
Global energy demand slowed in 2023, but industry forecasts predict a slow but consistent recovery in 2024. The International Energy Agency (IEA) is anticipating growth next year, though significant barriers remain. From economic headwinds to changing public and private investment, energy remains a question mark.
Energy Consumption Slows
Global energy demand is expected to grow by less than 2% in 2023, continuing a gradual decline that predates but was accelerated by the COVID-19 pandemic. The global growth rate for energy consumption clocked in at 2.3% in 2023 and averaged 2.4% in the five years predating the pandemic.
Early estimates place 2024 energy consumption on a 3.3% growth trend, according to the IEA.
Renewable Energy in 2024
Encouragingly, growth in renewable energy has largely absorbed 2023 energy growth capacity and is forecast to meet 2024 consumption needs as well. The IEA estimates that renewable energy will account for more than a third of global energy needs in the new year.
Not all renewables are expected to grow. Hydropower generation has declined by 2% since 2022. The 240 terawatt-hour decrease represents a substantial generative capacity equal to Spain's total annual energy consumption. Minimizing hydropower dependency now may pay off in the long run. Climate change and arid conditions in many parts of the globe are contributing to low reservoir levels in many parts of the world, with more challenges on the way.
The European Union Leads the Way
Carbon emissions will slowly decline as renewables meet a growing share of energy needs, but significant barriers remain. China and India, the two most populous countries on earth, registered increased emissions year-on-year, a trend neither country will remedy for a decade or more.
While progress is being made, most emission reductions are focused on the European Union. Considerable investments in renewables away from gas and coal have helped the EU to lower emissions in 2023, representing 40% of the total decline in emissions from all power generation.
Energy programs and a challenging economic environment contributed to a 6% decline in energy demand in the EU in the first half of 2023.
Energy in the US
As a net energy exporter, the US was largely a beneficiary of the changing energy market in 2022 and 2023, with gas exports playing a small role in meeting European demand created by Russian embargoes. Domestic demand has fallen, with an annual decline of 1.7% in 2023. US energy consumption is forecast to rebound in 2024 to 2%, though it remains below 2022 levels.
The Elephants in the Room
China’s energy needs are expected to reach 5.1% in 2024, and it is one of the few economies expected to slow down in the new year. China is facing considerable challenges in finance, manufacturing, and investment, contributing to what could be a sizeable decline in total output.
India’s energy demand is forecast to exceed that of Japan and Korea for the first time in 2024, but the IEA expects a 0.7% decline in demand growth. Like China, record-breaking summer heatwaves and the associated energy requirements could see demand surge next year.
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