Five trends that will define global power markets in the next 10 years

From 2015 to 2023, the worldwide deployment of clean energy resources grew from 120 GW/year to 530 GW/year. By 2035, the reference outlook of S&P Global Commodity Insights sees this figure reach 730 GW/year. This evolution is transforming power market operations worldwide, stimulating the sector's supply chains, and advancing the global effort to decarbonize.

Commodity Insights recently published a report analyzing how the build-out of renewables is expected to grow rapidly in the coming decades, how the mix of resources for power generation will trend toward more clean energies, and how power sector emissions will vary substantially across major markets. Here is a portion of the discussion topics and a summary of five trends that will define power markets worldwide between now and 2035.

1. Global power demand will increase by a third in the next 10 years

Economic growth in the emerging markets and electrification -- including data center demand -- will drive the bulk of new electricity consumption, dampened by increasing energy efficiency efforts. The Asia-Pacific region alone, with its strong industrial base, will capture 66% of overall demand growth.

2. Renewables will capture nearly 90% of all new power generation capacity globally, becoming a dominant source of power by 2035

Renewables will grow by over 740 GW annually between now and 2035. Carbon-free resources, such as renewables plus hydro, nuclear and batteries, will account for 70% of all installed generation capacity in 2035.

Solar and wind capacity will make up most clean energy additions, growing by 5.9 TW and 1.9 TW, respectively, between now and 2035. Electricity storage capacity -- a critical source of grid flexibility enabling the renewables deployments -- is expected to expand by 30% per year during the period.

3. Conventional thermal fuels will still make up 35% of global generation and 30% of installed capacity by 2035

Natural gas will play an important role as a baseload source of power and as a flexible resource providing reliability to power systems. In emerging markets in particular, rapid demand growth will drive more additions of conventional resources, mainly natural gas. Over 2024-35, natural gas will add 47 GW/year globally and on a net basis.

Coal generation, on the other hand, will be in net decline everywhere except India and a few smaller markets.

4. Investment in renewables, battery storage and hydrogen electrolyzers will average $775 billion annually between now and 2030 -- or about 40% above 2023 levels -- in real terms

Large regional variations will exist in investment levels, resulting from differences in resource endowment, energy security concerns, policy initiatives including incentives and supply chain localization requirements and the ability to attract financing.

The rapidly growing Asia-Pacific region will capture about 46% of the investment total, Europe another 26% and North America 16%. Utility-scale and distributed solar projects will represent almost 40% of investments. The cost of clean energies per megawatt will fall.

5. Global power generation will emit 10% less CO2 in 2035 than it does today

The emissions reductions are driven mainly by coal retirements in Europe and North America, a slowdown in coal generation in China, and the widespread penetration of clean energies. This reduction is insufficient, however, to position the world toward meeting its long-term climate goals.

with analysis from Francesco D'Avack

The information summarized in this video is sourced from the Global Power and Renewables service and the Clean Energy Technology service , both part of S&P Global Commodity Insights.