Report: Global Energy Demand, Rising Emissions

In short: the world has not made enough progress in the transition to low-carbon energy, as its growing appetite for energy remains filled mainly by fossil fuels.

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

“Globally, today’s new data offer little encouragement for global climate change mitigation,” said Nick Wayth, CEO of the Energy Institute, who co-authored the report with KPMG and Kearney. “Clean energy is still not fully meeting the increase in demand and therefore globally, without replacing any fossils. It can be said that the transition has not even begun.”

Fossil fuel use has increased globally despite increased use of renewable and other low-carbon energy resources. It is concerned about the pace of efforts to cut emissions and the world’s ability to meet the Paris Agreement’s climate goals to limit global warming to more than 1.5C above pre-industrial levels by 2050.

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

Renewables (excluding hydro) reached record levels for electricity production, reaching 4,748 terawatt-hours. Solar and wind accounted for nearly three-quarters of all net additional electricity generated, according to the report.

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

However, the share of renewable energy in primary energy use was only 8%, representing an increase of 0.4% compared to the previous year. The share was about 18% if hydro and nuclear are added.

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

The increase in primary energy consumption and emissions followed a full year of conflict in Ukraine, in addition to several conflicts in the Middle East, as well as the first full year without COVID-19 restrictions.

“There (was) an 18-month period during COVID when it looked like the world might be on the right track for Paris, but unfortunately we bounced back and got right back on the horse in terms of pre- -COVID, almost,” said Simon Virley, vice president and head of energy and natural resources for KPMG in the UK. Since the first Conference of the Parties (COP) in Berlin, nearly 30 years ago, the fossil fuel quota of the global energy mix has decreased. from about 86% to 81.5% today. “It’s 30 years of effort despite all the growth in renewables,” he said.

However, on a positive note, he pointed out that China has added more renewables than the rest of the world combined. China, which also saw fossil fuel consumption rise to a record high, added 55% of total generation additions from renewable sources in 2023.

“If China can do this on the scale that it will, then costs should continue to come down and hopefully help the deployment of renewables and other low-carbon technologies around the world.” he said.

The report also showed that the growth economy continued to struggle to use less fossil fuels. In India, for example, fossil fuel consumption has increased by 8%. In Africa, however, primary energy consumption decreased by 0.5%, electricity consumption is constant.

“The IEA recently estimated that developing economies outside of China account for only 15 percent of the global 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 we can’t decarbonize until we decarbonize. Unfortunately, at the moment it appears that Africa can neither carbonize nor decarbonize.”

In the US, where the focus is on electrification today, the report showed that electricity demand fell last year. It also fell in Europe.

“The wave of electric vehicles, heat pumps and new data centers has yet to catch up with overall improvements in energy efficiency. … But we may be approaching an inflection point,” Wayth said. The analysis shows that “data center electricity consumption could triple by 2030, reaching 3% to 4.5% of global energy consumption. Extrapolating the five-year growth rate of renewables to 2030, this means that data centers could absorb up to a sixth of new renewable energy capacity. Of course, in reality it will be much more localized where data centers will be built near places where energy is cheap, clean and abundant.”