Report: Global energy demand, increase in emissions

In short: the world has not made enough progress in the transition to low-carbon energy because the growing energy appetite is still met mainly by fossil fuels.

This is according to the latest Statistical Review of World Energy report, published on June 20, based on energy data collected last year.

“At a global level, today’s new data does not provide much optimism when it comes to mitigating global climate change,” said Nick Wayth, CEO of the Energy Institute, which co-authored the report with KPMG and Kearney. “Clean energy still does not even fully cover the growth in demand, and therefore at a global level, without displacing any fossil fuels. The transformation probably hasn’t even started.”

The use of fossil fuels has increased around the world despite the increased use of renewable energy sources and other low-carbon energy resources. raises concerns about the pace of emission reduction efforts and the world’s ability to meet the climate goals set out in the Paris Agreement to limit global warming to more than 1.5 °C above pre-industrial levels by 2050.

The data showed that global energy consumption rose by 2% to a record high of 620 exajoules (EJ), driven by increases in coal and oil consumption. This, in turn, increased energy-related emissions by 2%, exceeding 40 gigatonnes of CO₂ for the first time. Fossil fuel consumption reached a record high of 505 EJ in 2023, an increase of 1.5%. The consumption of coal and oil increased by 1.6% and 2%, respectively, while the consumption of natural gas – considered a transition fuel – remained stable.

Renewables (excluding hydropower) reached record levels of electricity generation, reaching 4,748 terawatt-hours. The report found that solar and wind power accounted for almost three-quarters of all net additional electricity generated.

Solar and wind capacity in 2023 surpassed the previous year’s record of 276 GW by approximately 186 GW, an increase of 67%.

However, the share of renewable energy sources in primary energy consumption was only 8%, an increase of 0.4% compared to the previous year. When hydro and nuclear power were added, the share was approximately 18%.

The share of fossil fuels in the energy mix decreased by 0.4% to almost 82%. Its use in different regions varied.

The rising primary energy consumption and emissions came after a full year of conflict in Ukraine, as well as intensifying conflicts in the Middle East, and the first full year without Covid-19 restrictions.

“There (was) an 18-month period during Covid-19 when it looked like the world might be on the right path for Paris, but unfortunately we have bounced back and are back on track in terms of pre-pandemic trends, to a large extent,” he said Simon Virley, vice president and head of energy and natural resources at KPMG in the UK. Since the first Conference of the Parties (COP) in Berlin almost 30 years ago, the share of fossil fuels in the global energy mix has fallen from around 86% to 81.5% today. “This is 30 years of effort despite all the development of renewable energy sources,” he said.

However, he positively noted that China has added more renewable energy sources than the rest of the world combined. China, which also saw record growth in fossil fuel consumption, added 55% of all connected renewables in 2023.

“If China can do this at the scale they intend to, costs should continue to fall, which should hopefully help the deployment of renewables and other low-carbon technologies around the world,” he said.

The report also found that growth economics continue to struggle to use less fossil fuels. For example, in India, fossil fuel consumption has increased by 8%. However, in Africa, primary energy consumption decreased by 0.5%, while electricity consumption remained unchanged.

“The IEA recently estimated that developing economies outside China account for only 15% of the world’s clean energy investment pipeline,” Wayth said, noting that the high cost of capital is holding back the development of new projects. “When I travel to Africa, people often say that we can’t decarbonize until we carbonize. Unfortunately, at the moment it appears that Africa can neither carbonize nor decarbonize.”

In the United States, where there is currently a strong focus on electrification, the report found that electricity demand fell last year. It also declined in Europe.

“The wave of electric vehicles, heat pumps and new data centers has not yet caught up with overall improvements in energy efficiency. … But we may be approaching a tipping point,” Wayth said. The analysis shows that “electricity consumption in data centers could triple by 2030, reaching between 3% and 4.5% of global energy consumption. Extrapolating the five-year renewable growth rate to 2030, this means data centers could absorb up to one-sixth of the new renewable capacity. Of course, in reality it will be much more localized, with data centers being built near places where energy is cheap, clean and abundant.”