Electricity represents 25% of the demand for energy in its final form. According to the IEA, the demand for and generation of electric power is expected to increase by an average of 2.5% annually through 2030, or double current levels.

World electric power generation is estimated at about 18,800 TWh in 2006, compared with 5,217 TWh in 1971. Growth was 3.5%, significantly higher than the average record over the 1990-2004 period (2.9%). Growth was particularly strong in Asia-Pacific (5.5%), Africa (4.3%) and the Middle East (4.7%). According to the IEA, world electric power generation should reach about 32,000 TWh by 2030.

In 2006, the electricity generation was divided up as follows:

2006 Worldwide electric power generation by source



Source: IEA - Energy Information (2006).

Future demand for electricity will come mostly from emerging and developing countries. Between now and 2030, electricity production will more than double in the Asia-Pacific region.

World electricity generation by region (in TWh)



Source: IAE

The challenge for the coming years is to identify the optimum energy mix of for power generation so as to meet growing demand while addressing issues such as CO₂ emission reduction, the price and availability of energy resources, and security of supply.

Significant capital spending ahead
Again according to the IEA, these growth rates call for estimated capital spending in the electricity sector is forecast at 11,276 billion dollars over the 2004-2030 period, including 5,186 billion for power generation projects (5,087 GWe of additional capacity for power plant replacement and to meet growing demand) and 6,090 billion for electricity transmission and distribution projects, with networks expected to expand from 3.5 million kilometers currently to 7.2 million kilometers by 2030.

Moreover, energy markets are expected to become increasingly interdependent as deregulation increases. The market for electricity is becoming increasingly regional, requiring additional interconnections between power grids to improve their efficiency. Grid interconnection is one way to reconcile occasional gaps between power demand and power production, without building and maintaining excess capacity. These interconnections reduce costs without penalizing the final user.

Useful links

www.iea.org: International Energy Agency (World Energy Outlook - 2004 report)
www.worldenergy.org: World Energy Council.
www.industrie.gouv.fr/energie: Energy and raw materials department of the French government
www.energy.gov: U.S. Department of Energy (DOE)
www.europa.eu.int: European Commission (World Energy, Technology and Climate Policy Outlook in 2030 - WETO report).