Five facts show peak power emissions are getting closer. But we have one big problem to tackle first
Generation Investment Management
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There are a lot of numbers published about the energy transition. These are the ones that count.
The world is drowning in data and it’s becoming increasingly important to sort out the numbers that matter from those that don’t.
The numbers that matter for the energy transition are the ones we’ve included in our Sustainability Trends Report. For Al Gore, our chairman, they indicate definite signs of hope.
“Our world is finally getting very close to peak emissions, at least in the power sector of the economy,” he says. “One think tank says it will happen this year. If it doesn't happen this year, it will happen soon, because we're seeing alternative technologies become cheaper and better than fossil fuel technologies.”
Here are the five key facts and figures we’ve found that we believe back this up – along with one that highlights how much work the world still has to do.
1. Solar is breaking records
Solar power generation is growing faster than wind power for the first time. It climbed 25% last year[1] while wind rose 14%.[2]
Supportive government policy has been key to a 45% rise in solar panel installations,[3] but soaring energy bills have also been influential.
Households are realising solar panels can cut their bills, and rooftop installations are up 49% from a year earlier. Another 35% rise is forecast this year.[4]
The Netherlands is leading the way in Europe. Solar makes up 14% of its electricity supply[5] , up from around 9% in 2021.[6]
2. Wind and solar are meeting 80% of electricity demand growth
The US, India, China and the EU are the standout performers on wind and solar thanks to new climate regulations.
As other policies designed to speed up renewables kick in, we expect wind and solar to account for more than 100% of electricity demand growth, meaning they will claim market share from fossil fuels.
Global wind and solar power generation rose by 557 terawatt-hours in 2022, barely below electricity demand growth of 694 terawatt-hours.[7] Solar is the biggest star right now, with offshore wind growth slowing from record levels[8] and onshore wind additions expected to fall 5% next year.[9]
3. China is using its coal plants less
China is not just leading the world on renewable installations, but it’s also using its coal-fired power plants approximately half the time – and that figure is falling.
This is welcome news, as one in around every four tonnes of coal used worldwide is fuelling electricity production in China.[10]
Unfortunately, China has also dialled up its approval of new coal power plants in the past two years, following panics over large power outages. Thankfully, many are currently sitting on standby.
4. Europe’s gas demand fell 13% last year[11]
The Ukraine war forced Europe to come to terms with decades of foolish energy policy, exposing its over-reliance on Russian gas supplies.
Gas use dived 15% in industrial powerhouse Germany, and there were drops of almost 10% in Italy and France, the continent’s other biggest gas consumers.[12] Wind and solar stepped into the breach, providing 22% of EU electricity and overtaking gas in the power mix for the first time.[13]
There is no turning back now. Policy changes such as the REPowerEU plan promise to ramp up renewables and flatten fossil fuel use.[14]
5. Power-sector emissions are plateauing
Electricity is getting cleaner. While electricity use rose 2.5% last year, emissions from electricity are climbing at half that pace, by 1.3%.[15]
And if we ignore the gyrations associated with the pandemic, emissions have really been bouncing along a plateau since 2019.
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Grid cleanups are not yet global but they are under way in many countries. This suggests they can happen globally, but the biggest indication they actually will happen is the fact that renewables are now a cheaper power source than fossil fuels. than fossil fuels.[16]
But …
The cleanup is not happening fast enough. Why? Grid bottlenecks are preventing renewable projects from connecting to consumers.[17] Waiting lists that used to stretch for 18 months now extend beyond five years, and the situation is getting worse.
This is because grids were built to take power from a few large fossil fuel plants, rather than large numbers of small renewable projects. The way forward has to be for governments to streamline planning and permitting rules around grids.
To find out more about exactly where the world is on its journey to a cleaner future, read The Sustainability Trends Report .
[1] IEA, Solar PV – https://www.iea.org/energy-system/renewables/solar-pv
[2] IEA, Wind – https://www.iea.org/energy-system/renewables/wind
[3] Solar Power Europe, New report: Solar for the masses as global solar rooftops skyrocket by 50% – https://www.solarpowereurope.org/press-releases/new-report-solar-for-the-masses-as-global-solar-rooftops-skyrocket-by-50-2
[4] Solar Power Europe, New report: Solar for the masses as global solar rooftops skyrocket by 50% – https://www.solarpowereurope.org/press-releases/new-report-solar-for-the-masses-as-global-solar-rooftops-skyrocket-by-50-2
[5] Ember, European Electricity Review 2023 – https://ember-climate.org/insights/research/european-electricity-review-2023/
[6] Ember, European Electricity Review 2022 –
[7] Ember, Global Electricity Review 2023 – https://ember-climate.org/insights/research/global-electricity-review-2023/
[8] IEA, Wind – https://www.iea.org/energy-system/renewables/wind
[9] IEA, Renewable Energy Market Update, June 2023 – https://www.iea.org/reports/renewable-energy-market-update-june-2023/executive-summary
[10] IEA, China – https://www.iea.org/countries/china
[11] Energy Institute, 2023 Statistical Review of World Energy – https://www.energyinst.org/statistical-review
[12] Eurostat, Natural gas demand down 13% in 2022 in cutback efforts – https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20230504-2#:~:text=Following%20a%204.3%25%20increase%20in,2022%20to%2013.72%20million%20terajoules .
[13] Ember, European Electricity Review 2023 – https://ember-climate.org/insights/research/european-electricity-review-2023/
[14] European Commission, REPowerEU – https://ec.europa.eu/commission/presscorner/detail/en/IP_22_3131
[15] Ember, Global Electricity Review 2023 – https://ember-climate.org/insights/research/global-electricity-review-2023/
[16] UN, Renewables: Cheapest form of power – https://www.un.org/en/climatechange/renewables-cheapest-form-power
[17] FT, Grid bottlenecks delay transition to clean energy – https://www.ft.com/content/bf1b788a-f366-4637-9ae4-08dbc0bd90fa