Electricity market report July 2022 update
In the first half of 2022, many electricity markets continued to experience skyrocketing prices, particularly in Europe, reflecting deep uncertainties over both fossil fuel supplies and the economic outlook. Russia’s invasion of Ukraine shattered any hope of energy prices declining in the near term following the strong increases seen in the second half of 2021. In Europe, the situation prompted heightened ambitions and strengthened policies to advance clean energy transitions and reduce dependency on fuel imports. But in the short term, it also resulted in a partial return to coal-fired electricity generation. Sluggish economic growth is expected to dampen global electricity demand growth in 2022 and 2023 to less than half the rate seen in 2021. Despite gas-to-coal switching and low nuclear power plant availability in Europe, global electricity sector emissions may decline slightly in 2022 and 2023 – reflecting a combination of slowing power demand and displacement of fossil fuels by renewables. This July 2022 update of the IEA Electricity Market Report presents the latest forecasts for global electricity demand, supply and emissions through 2023. In light of Russia’s invasion of Ukraine, also provide a special focus on the situation in Europe, discussing recent developments and future plans.