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Tuesday, September 27, 2022

The Renewable Boom Has Barely Impacted Oil & Gas

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A decade ago, fossil fuels accounted for just over 80 percent of final energy consumption in the world. During the last ten years, renewable energy has boomed, and installations continue to soar to record highs. But oil, gas, and coal still represent over 80 percent of final energy consumption, despite the rising share of renewable energy in the world’s total energy consumption.

Fossil fuel use around the world hasn’t retreated despite the avalanche of net-zero pledges, significantly increased support to clean energy from governments, and record-high installations of solar and wind power in recent years.

To be fair, fossil fuel use has dropped in overall global energy consumption over the past decade, but by a meager 0.1 percentage point, from an 80.3 percent share back in 2009 to 80.2 percent in 2019, a new report from REN21, a global renewable energy community advocating for a transition to clean energy, showed.

“We are waking up to the bitter reality that the climate policy promises over the past ten years have mostly been empty words. The share of fossil fuels in final energy consumption has not moved by an inch,” REN21’s Executive Director Rana Adib said

This is a sobering thought for green energy enthusiasts: How come the record renewable energy capacity additions over the past decade failed to significantly dent the global use of oil and gas?

Here’s how: energy demand in the world continues to rise, most evident in developing countries where the population continues to grow, and the number of people in need of accessing ANY form of energy is also growing. In many of those countries, fossil fuels are the only option for meeting a large part of the continuous rise in energy demand.

Fossil Fuel Is Still Kingnull

While most of the attention has been focused on the ambitious climate pledges and policies in developed economies, the countries with the largest growth in energy demand are the developing economies. Renewables have dented the use of fossil fuels in the United States and Western Europe. However, energy demand there has been mostly stagnant or has only slightly increased over the past decade. At the same time, developing economies in Asia and Africa have seen surging energy demand, which has been mostly met by oil, gas, and coal. Case in point—China, the largest renewables market, installed a record-breaking 52 gigawatts (GW) of wind power capacity last year, breaking the world record for most wind capacity installed in a single year by any country in history as it doubled its annual installations compared to 2019. But China also commissioned more coal-fired capacity last year than the rest of the world retired.

When looking at the uptake of renewable energy, analysts have tended to focus on the surging capacity additions of solar and wind power in both developed and developing economies, and on the falling costs for batteries and solar and wind power. They tend to overlook the fact that globally, it is not Sweden that is the poster child of energy trends, it is Southeast Asia.   

Renewable Share In Energy Consumption Grows Only Moderately

As of 2019, modern renewable energy, which excludes the traditional use of biomass, accounted for an estimated 11.2 percent of global final energy consumption, up from 8.7 percent a decade earlier, REN21’s report found.

“Despite tremendous growth in some renewable energy sectors, the share of renewables has increased only moderately each year. This is due to rising global energy demand, continuing consumption of and investment in new fossil fuels, and declining traditional use of biomass (which has led to a shift towards fossil fuels),” the authors of the report wrote.

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