Secure, Sustainable and Affordable Power Systems in Emerging Economies

In this report

The global power sector will change significantly in the coming years, as variable renewable resources are deployed on a large scale and new flexibility options appear, such as energy storage devices. In this context, thermal plants that use fossil fuels will experience a reduction in their share of power sector output, particularly in advanced economies, as efforts to achieve climate goals are increased. In developing economies, overall electricity demand will increase as power demand is pushed up by economic growth, urbanisation and increasing energy access. This report clarifies the role that thermal plants will play in the power systems of emerging economies in different IEA scenarios, including the Stated Policies Scenario and Sustainable Development Scenario of the 2019 World Energy Outlook. International co-operation and knowledge sharing can play significant roles in helping emerging economies carry out an affordable energy transition.


The power sector’s vital importance for modern society will only increase as electrification allows the decarbonisation of other sectors, like transport. However, the power sector accounts for 40% of greenhouse gas emissions, most of which is emitted from thermal plants, and in particular from those using fossil fuels. What roles will thermal plants play in enabling decarbonisation, satisfying energy needs and providing electricity security? To what extent will emerging economies need to rely in these sources in coming years?

To answer these questions, this report builds on the scenarios in World Energy Outlook 2019. IEA scenarios are internally consistent visions of the world that can be compared with each other to understand what global energy supply and demand could look like depending on the paths that are taken.

The Stated Policies Scenario (STEPS) describes what would happen if countries successfully implement the plans and ambitions they have announced. The Sustainable Development Scenario (SDS) charts a global path to meet Paris Agreement climate objectives and Sustainable Development Goals on energy access and air quality.

This report uses STEPS and SDS to describe two different pathways to meeting electricity demand in emerging economies without compromising security of supply. It includes regional reviews of Africa and Southeast Asia. Each region presents unique challenges in terms of projected electricity demand growth, current resource mix and resource potential.

The first chapter examines how recent announcements and current policies are expected to change the global power sector under STEPS assumptions, comparing advanced economies with developing economies. The chapter then focuses on Africa and Southeast Asia, and shows how taking a fast development path could increase possibilities in Africa. This scenario, the Africa Case, highlights how the continent that will experience the largest population growth can boost social and economic development while keeping emissions to a level similar to that in STEPS.

The second chapter explains the transformation that the global power sector would experience under the SDS at a global level, emphasising the implications of a fast decarbonisation path for power systems in Southeast Asia and Africa. By 2040, coal-fired electricity generation will be 90% lower in developing economies under the SDS. In particular, the chapter details the need for dramatic increases in investments in the SDS rather than in STEPS. Reaching SDS goals requires drasticly reducing coal-fired electricity generation by lowering operating rates of coal plants, shifting from less efficient coal plants in emerging market power systems to more efficient plants and plants equipped with carbon capture, utilisation and storage (CCUS), and decreasing overall capacity of coal plants.

The final chapter discusses the role of dispatchable thermal capacity in providing electricity security in STEPS and SDS. To ensure secure, sustainable and affordable power systems while meeting development goals, the chapter shows, international cooperation in technical and financial support is crucial, as well as sharing of best practices. It is also vital that advanced economies engage in the development and power system transitions in developing countries.