Fossil fuel electricity market to hit $1.316t by 2029

An increase in electricity demand will boost the fossil fuel market.

The fossil fuel electricity market is projected to reach $1.316t by 2029, with a compound annual growth rate (CAGR) of 4.5%.

According to The Business Research Company's (TBRC) latest report, this market expansion can be attributed to factors such as environmental concerns, integration of renewable energy, energy efficiency, and energy storage.

The company said there has been a consistent expansion in the size of the fossil fuel electricity market in the past few years. It's estimated to rise from $1.062t in 2024 to $1.102t in 2025, with a CAGR of 3.8%.

“This growth seen in the historic period can be linked to factors such as the demand for energy, economic progress, development of infrastructure, as well as policy and regulation,” the company said.

The market’s expansion in 2029 is seen to be greatly influenced by the anticipated increase in electricity demand. The surge can be linked to expanding economies and population growth, particularly in emerging nations like China, India, Brazil, and certain African countries.

TBRC cited the International Energy Agency, which reported that global electricity demand expanded by 2.2% in 2023 as of January 2024. Notably, the US saw a 2.6% rise in electricity demand in 2022.

It also noted that the Asia Pacific region led the fossil fuel electricity market in 2024.

The growth of the fossil fuel electricity market is also being influenced by the adoption of the latest technologies, such as carbon capture and storage (CCS).

“Around the world, governments are growing more supportive of the use of carbon capture and storage (CCS) technology in various sectors, including power generation. CCS can prevent up to 90% of the carbon dioxide emissions that result from burning fossil fuels from being released into the atmosphere,” TBRC said.