Clean Energy Growth Twice That of Fossil Fuels Since 2019
Since 2019, the world has seen a remarkable surge in clean energy deployment, driven by government responses to the Covid-19 pandemic and the energy crisis of 2022. This acceleration in clean energy adoption has not only outpaced the growth of fossil fuels by two to one but has also led to significant policy actions worldwide aimed at boosting the uptake of clean energy technologies.
The production of low-emissions electricity skyrocketed by approximately 1,800 terawatt-hours (TWh), despite challenges faced by hydroelectric power due to droughts and forced closures of nuclear power stations, particularly in Western Europe. In contrast, the generation of electricity from fossil fuels increased by just under 850 TWh, which is notably less than the growth seen in solar photovoltaic (PV) systems alone, which added around 910 TWh since 2019, as well as the incremental output from wind power, which contributed an additional 885 TWh.
The trend continues when we look at end-use consumption. The push for greater electrification, combined with the growing supply of clean electricity, has led to an increase in clean electricity consumption by about 6 exajoules (EJ). Additionally, modern biofuels expanded by around 2.3 EJ. These increases are roughly twice the rate of growth in the consumption of fossil fuel-based energy carriers, which includes both electricity generated from fossil fuels and the direct use of fossil fuels in end-use applications.
Impact of Clean Energy Deployment on Energy Market Development
The last five years have seen significant growth in clean energy, with solar PV, wind power, nuclear power, electric cars, and heat pumps avoiding about 25 EJ of fossil fuel demand annually. This accounts for roughly 5% of global fossil fuel demand in 2023, equivalent to Japan and Korea's combined annual energy demand. The majority of this saving comes from the use of wind and solar power, which together avoid around 555 Mtce of coal demand, equal to the total coal consumption for electricity generation of India and Indonesia in 2023.
Natural gas demand has been cut by around 180 bcm, mostly through increased wind and solar capacities, saving more than double the actual increase in global natural gas demand since 2019. Electric cars contribute significantly to this saving, preventing an increase in oil demand that would have otherwise exceeded pre-pandemic levels.
In summary, clean energy deployment over the past half-decade has substantially reduced fossil fuel consumption, offsetting a rise in global demand and contributing to a more sustainable energy future.
Cumulative Impact of Solar PV Expansion on Emission Reductions
Globally, solar photovoltaic (PV) capacity witnessed a monumental surge, with additions skyrocketing over 80% from 2022 to 2023, shattering records with an impressive surpass of 420 GW. China dominated this growth, contributing to over 80% of the global increase in solar PV capacity. Despite phasing out central government subsidies for utility and commercial-scale applications, China's deployment soared by 250%, accounting for a staggering 62% of global additions. The country's aggressive expansion in manufacturing led to a significant 50% reduction in PV module costs since December 2022, enhancing the competitive edge of solar PV against provincial benchmark electricity prices, which are largely dependent on coal power.
In the European Union, solar PV advancements also scaled new heights, with annual additions increasing by a quarter, hitting a record 52 GW in the previous year. Russia's conflict with Ukraine spurred EU member states to refine their policy landscape to hasten renewable energy deployment aiming to curtail natural gas consumption. Consequently, annual solar PV additions have nearly doubled since 2021. Additionally, elevated retail electricity prices due to the energy crisis have incentivized consumers to promptly install solar PV systems on their rooftops to alleviate their energy bills. Meanwhile, in the United States, solar PV capacity additions rose by 50% year-on-year as supply chain constraints began to ease, reversing a decline seen in 2022. Federal tax incentives and state-level support continue to propel both utility-scale and residential solar PV applications.
Indian solar PV additions reached 12 GW in 2023, marking a one-third decrease from the previous year, influenced by reduced competitive auction offerings for large-scale solar projects and ongoing supply chain challenges. Brazil, however, experienced a robust increase of over 20% in solar PV additions, fueled by its net metering scheme that encourages rooftop solar installations. In 2023, Brazil's solar PV capacity additions surpassed those of India. On a global scale, from 2019 to 2023, the deployment of solar PV has cut annual CO2 emissions by approximately 1.1 billion tonnes, equivalent to Japan's total annual emissions. The most substantial contribution to emission reductions is in China, where new solar PV capacities prevent over 600 Mt of emissions. In Australia and New Zealand, solar PV deployment over the same period avoids emissions amounting to 10% of the region's total annual energy emissions in 2023.
