The Rising Era of Clean Energy

Global electricity demand rose by 2% in 2022 but it is expected to accelerate in 2023. 2022 electricity demand growth of 2% was even lower than pre-pandemic level of 2.4%. This growth decelaration was the combined outcome of high energy prices and global uncertainties. The demand for electricity in this period was mainly driven by Asia and USA, where higher economic activities and extreme weather conditions required more heating and cooling. In the coming years, Asia is expected to lead the way in energy demand growth, and global energy demand is projected to increase at an annual rate of 3% until 2025.

The Era of clean power, Energy at its cleanest:

In 2022 share of all renewable electricity sources reached 39% of global electricity. Solar and wind emerged as the largest contributor to the share with contribution of almost 75% in the total.

Together solar and wind represent 12% of the global electricity generation in 2022, bringing the cumulative electricity capacity larger than the electricity demand of entire European continent.

Going ahead, between 2022 and 2025, production of electricity from natural gas and coal is projected to remain relatively unchanged worldwide. However, coal and gas-fired power generation is expected to decrease in Europe and the Americas, while there will be a corresponding increase in the Asia-Pacific and the Middle East regions. As the proportion of renewable energy in the global electricity generation mix rises, the share of coal and gas-fired power generation is expected to decrease. This will result in a decline in the CO2 intensity of global power generation soon.

Wind and solar energy generation are approaching a global tipping point, where the growth in electricity demand will be met by an increase in clean electricity generation. In 2022, clean electricity generation was able to meet 92% of the global electricity demand growth. Moving forward, wind and solar energy are expected to gain market share at the expense of coal and gas-fired power, indicating a significant reduction in power sector emissions and a decrease in the carbon intensity of electricity.

Global energy crisis is pushing the accelerator on renewable energy expansion:

The current global energy crisis has resulted in a significant increase in expansion of renewable energy capacity. In the next five years, renewable energy sources are expected to account for more than 90% of global electricity expansion, with an estimated increase of almost 2,400 GW, which is nearly 75%. This growth is equivalent to the amount of renewable power added to the global energy mix in the last two decades. This trend is driven by the decreasing cost of renewable energy and government policies promoting sustainable energy, as well as increasing demand from businesses and consumers.

According to the most recent data, despite the COVID-19 pandemic and the economic crisis, global renewable energy capacity grew in 2021-22. The International Energy Agency (IEA) reports that capacity additions for renewable energy reached a record level of 200 GW+ in 2021-22, and early data indicates that 2023 will also see robust growth.

With a projected 250 GW of new solar capacity added in 2023, solar energy is expected to continue to lead the way in terms of capacity increases. This is because solar technology is becoming more affordable, as well as because of favorable government policies and incentives.

Estimated addition of 90 GW new capacity for wind energy in 2023 is another important development area. Due to their high energy output and diminished aesthetic impact as compared to onshore wind farms, offshore wind projects are becoming increasingly popular, especially in Europe.

Overall, the data indicates that global market for renewable energy is expanding, with solar and wind energy dominating this growth. The rising demand for clean energy, encouraging government policies and incentives, and declining cost of renewable energy technology all contribute to this increase. In order to lessen the effects of climate change and help the world transition to a low-carbon economy, the renewable energy sector is projected to be vital.

# Contributed by Vijay Kumar and Rupam Gautam Rupam Gautam

* This content is based on the personal knowledge of the contributors. Stay tuned for more volumes on this topic!

Nitin Sikri ; Gopichand Gurada ; Harish Mehra ; Nishant Mehta ; Amit Kumar ; Aakash Agarwal ; Yogesh Dhond ; Taranpreet Khambay ; Piyush Manocha ; PRASANT MISHRA