Q3 2017: global power markets at a glance

12 December 2017 (Last Updated December 12th, 2017 16:48)

Global installed power capacity reached 6,473 gigawatts (GW) in 2016 from over 5,047GW in 2010 at a compound annual growth rate (CAGR) of 4.1%.

Q3 2017: global power markets at a glance

Global installed power capacity reached 6,473 gigawatts (GW) in 2016 from over 5,047GW in 2010 at a compound annual growth rate (CAGR) of 4.1%. The global power industry is characterized by heavy dependence on thermal fuel sources for power generation, as major power-generating countries such as China, the US, India, Japan and Russia have abundant coal reserves. In recent years, significant economic development in China and India and the increased use of coal resources have driven the rapid growth of thermal generation. With the insecurity surrounding supply of conventional fuels and volatile prices, renewable energy is emerging as a feasible alternative.

Thermal power is the largest power-generating source, with a 61.1% share of the global installed capacity in 2016. Cumulative installed capacity for thermal power was 3,954GW in 2016 and is expected to reach 5,318GW by 2030 at a CAGR of 2.1%. Hydropower is the second-largest power-generating source with a cumulative installed capacity of 1,200GW in 2016, accounting for 18.6% of the global pie. Renewable energy sources constituted 928GW (excluding hydropower) in 2016 and had an installed capacity share of 14.3%. Wind power was the largest non-hydro renewable source with a share of over 7.6% of the global power capacity in 2016 followed by solar photovoltaic (4.6%) and biopower (1.8%).

The global power sector is undergoing a gradual transition from conventional thermal power-generating sources to clean energy technologies. The share of renewable power in the global installed capacity mix is estimated to increase from 14.3% in 2016 to 23.4% in 2025. Latin America is one of the key regions for renewable power development.

In the US, natural gas is expected to dominate the thermal power sector due to abundant natural gas at affordable prices along with stringent emission standards and safety requirements discouraging the coal and nuclear power industry, respectively. Certain Asian and African countries will witness increased coal-based capacity addition. Nuclear installed capacity is expected to rise in Asia as China, India, and Japan have a number of projects in the pipeline. In the US, plant lifetime extension plans are maintaining capacity while the UK and Russia have plans for massive nuclear capacity addition. In the US, Trump administration’s push to revive coal through regulatory measures might boost the coal power sector.