3.1
The evolution of the energy mix in 2020
This year’s report includes 2020 as the last year of the analysis and as such the major trends are heavily influenced by the effects on the energy system resulting from the Covid‑19 pandemic as of the beginning of 2020. Consequently, caution should be taken when looking at some of the broad and high-level indicators, as these need to be interpreted and reviewed alongside additional indicators to understand the emerging trends and to provide context.
At a global level, both electrification and the low-carbon share of power generation progressed significantly over 2019‑2020, increasing at a much higher rate than what was observed over 2010‑2019 (Figure 3.1). In 2020, an acceleration of the share of total final consumption (TFC) was observed also for natural gas, although to a lesser extent than for electricity.
Oil saw the largest decline, losing 2.1 percentage points over 2019‑2020. It was the only fuel that saw a decline in share, with electricity, renewables, gas, heat and coal all seeing an increase in share of TFC. Renewables and heat were the only two sources that saw an increase in absolute levels, while the global demand for fossil fuels and electricity declined. Coal saw an increase in share for the first time in eight years, as its demand diminished less than TFC. Overall, fossil fuels still dominate the end-use energy mix, at 65% of total final consumption, with the decline of their combined share in 2020 equalling that of the previous eight years combined.
The share of electricity in TFC in 2020 increased 0.8 percentage points – an almost fourfold increase compared with the average seen over the previous decade (2010‑2019) at just over 0.2 percentage points (Figure 3.2a). The apparent increase in electrification was not due to an increase of electricity demand, but rather to a decrease of overall energy demand, which decreased by a much larger extent than that for electricity. More than 85% of the drop in total final energy demand in 2020 was due to reduced oil demand, followed by lower natural gas consumption that accounted for a further 10% (Figure 3.2b).
In 2020, the 15 countries analysed in detail in this report (see Chapter 5) accounted for almost two-thirds of total final energy consumption and for more than 70% of total final electricity consumption in the world. All of these countries saw a decline both of electricity use and of total energy demand in 2020 with respect to the previous year, with the notable exception of China.
Contrary to the other 14 countries, China increased consumption for all fuels, albeit in different proportions with respect to the past. While total energy demand over the last year grew faster than in the previous decade, the growth of electricity was less than half that in the past, resulting in an evident slowdown of electrification in the country. As China accounted for almost 70% of the growth of global electricity demand over 2010‑2019, this slowdown will need to be closely monitored for its possible future implication over the next editions of the GEM.
More than 85% of the drop in total final energy demand in 2020 was due to reduced oil demand.
Electricity demand in all the other 14 countries decreased less than the drop of total energy demand, resulting in an apparent increase of electrification. The diminished oil consumption accounted almost always for the largest share of the decrease, apart from Russia, where gas consumption accounted for two-thirds of the drop. The notable exception in this group was India, where electricity demand decreased more than other fuel sources (in percentage terms). As a result, India was the only country among those analysed that saw a lower electrification rate in 2020 compared with 2019 (Figure 3.3).
When looking at electrification at the sectoral level, it can be observed that each sector registered only a minor increase.
The largest contributor to the acceleration of electrification in 2020 at a global TFC level is the lower demand for oil products in the transport sector. As this sector accounts for more than one-quarter of global final demand and has a low electrification rate, a significant change in its relative weight results in the apparent increase at global TFC level. Nonetheless, when looking at electrification at the sectoral level, it can be observed that each sector registered only a minor increase (Figure 3.4).
The transport sector saw the highest surge of the share of electricity due to the sharpest oil reduction, with very minor increases in the buildings and industry sectors, by 0.11% and 0.06% respectively. For the latter two sectors, this represents a slowdown of the electrification rate respectively threefold and fivefold with respect to 2010‑2019. The global slowdown in industry was mainly determined by a slowdown in China, while within the buildings sector, two opposite trends were observed, with an increase in residential electricity demand being more than compensated by the drop in the services sector (see section 3.4 for further details). Additional demand in other sectors (agriculture, fishing and non‑specified) does not alter these trends.