pwr_january-2025 - 9

GLOBAL MONITOR
2. Electricity generation by source in advanced economies and EMDE in the STEPS, 2023-
2030. Over the next five years, clean power in advanced economies is set to grow twice as fast
as electricity demand, driven by wind, solar, and nuclear, while coal use declines by 50% and
gas by 15%. In emerging markets, solar and wind dominate clean power growth, yet unabated
fossil fuel use remains largely unchanged, with China contributing 70% of the category's clean
energy expansion. Source: IEA
fired power plants in advanced economies
declines from 36% in 2023 to 31%
in 2030 and 26% in 2035, " it says. " If they
had to meet the higher demand seen in
the sensitivity case, the average capacity
factor for gas-fired power plants would
still decline over time, but it would do so
at a slower rate. "
For now, the technical potential for coalto-gas
switching still harbors a tremendous
potential of 450 billion cubic meters
(bcm). If natural gas prices were to fall low
enough, STEPS suggests an additional
300 bcm could be opened to possible
switching in China, India, and Southeast
Asia. The IEA also notably suggests oilto-gas
switching in the Middle East-oil
generation amounted to about 340 TWh
in the region in 2023-could precipitate
another surge in demand for natural gas.
Challenges in scaling renewables, including
delays in permitting, supply chain disruptions,
and grid connection issues for
wind and solar PV, particularly in the U.S.
and the European Union (EU), could also
amplify this trend. Conversely, however,
rapid progress in solar PV deployment
could temper natural gas growth.
5. Supply Chain Risks-the Achilles'
Heel of the Clean Energy Transition.
Along with fuel supply disruptions, the
WEO 2024 expresses concerns about lingering
vulnerabilities in supply chains, particularly
for clean energy technologies. A
key concern is that manufacturing capacities
are highly concentrated geographically.
" Owing to its supportive industrial
policies, China has a very large proportion
of existing manufacturing capacity for solar
PV, wind, heat pumps, electrolyzers,
and battery components, " it notes. " In
the case of batteries, for example, China
January 2025 |POWER
holds almost 90% of global capacity for
battery cathode active materials, often a
combination of lithium with nickel, cobalt,
and manganese, or iron phosphate, and
98% of capacity for battery anode
active materials, frequently graphite
or silicon-doped graphite. "
Risks extend to critical minerals,
whose markets were turbulent in
2023. " From 2023 to 2035, some
50%-75% of supply growth for
refined copper, lithium, and cobalt
is projected to come from today's
largest producers, and the same
is true for about 90% of batterygrade
graphite supply and nickel
growth, " the report warns.
As IEA Chief Energy Economist
Tim Gould explained, many
of the battery metals-lithium,
nickel, cobalt, and graphite-
show " impressive growth " in
supply over the next decade.
Copper, a fundamental metal for
power infrastructure, however, is
facing a potential shortage. " With
declining ore quality and not a lot
of new projects coming through,
this means that, with the rapid
expansion of demand, there are
important gaps between our demand
(net of recycling) and the
anticipated supply we see coming
through from different projects, "
he said. While these material constraints
" don't mean that our projections
are unattainable by any
means, " they " provide a strong
signal to policymakers and decisionmakers
that we need to close
those gaps, " he said. To mitigate
risks, the IEA emphasizes innowww.powermag.com
vation,
including recycling and alternative
technology development, alongside
policy interventions like incentives for
" responsibly sourced materials " through
subsidies, tax credits, and environmental,
social, and governance standards.
6. China Is Now an Undeniable Influential
Powerhouse. Finally, setting the
WEO 2024 apart from previous editions,
IEA experts repeatedly underscored China's
ascent as a defining force in the global
energy market. Already today, China is
among the most electrified economies
in the world for a variety of reasons: its
manufacturing sector, its industry, and its
policies. For example, over the past decade,
efforts to combat air pollution in cities
have resulted in the number of people
heating their homes with electricity doubling, "
said Laura Cozzi, IEA director of
Sustainability, Technology, and Outlooks.
China's push for electrification will impact
everyone, she said. " Why? Because
of the sheer amount of new electricity
China will demand between now and
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