The world just broke four big energy records

The annual Statistical Review of World Energy just dropped its 73rd annual edition over the weekend, but if you haven’t heard of it, don’t feel bad.

Last year’s edition hit just as Yevgeny Prigozhin launched his bizarre if short-lived Wagner mutiny (can you believe that was a year ago?), so the report’s findings were overshadowed. And Covid buried the editions before that.

But this weekend was relatively pandemic and mutiny-free, so let’s take a quick look at the report, and four of the biggest new energy records the world set last year (our hottest year on record):

1. Record energy consumption

Our world is now consuming more energy than ever, up 2% in a year. And the ‘global south‘ – which consumes more than half the world’s energy – is really driving that trend, with energy demand there growing at twice the global rate.

China alone accounts for almost a third of the world’s total energy demand, growing at triple the global rate (6%). And that’s all led to…

2. Record fossil fuel consumption

We chewed through 1.5% more fossil fuels last year, driven by new highs in our top two energy sources: oil (a third of the world’s energy) and coal (a quarter). All up, fossil fuels now comprise 81.5% of our energy mix, and that’s a new low, though not by much: that number stood at 82% last year, and 86% in 1995.

Things get a little more dramatic when you zoom in: fossil fuels dipped below 70% of Europe’s energy mix for the first time last year, while US coal consumption has halved in the last decade.

But India is now burning more coal than the US and Europe combined, while China burns more coal than the rest of the world, combined. So that’s led to…

3) Record CO2 emissions

Our world’s emissions hit 40 gigatonnes of CO2 for the first time last year, up 2%. That’s partly because we used more fossil fuels, but also because our mix of fossil fuels got dirtier (ie, more coal and oil, rather than gas).

But again, the picture gets a little more dramatic when you zoom in: US and EU emissions declined by 2.7% and 6.6% respectively, which sounds impressive. But… the jump in Asia’s emissions was triple the combined drop in the US and EU.

And notwithstanding all that, our world also saw…

4. Record renewables

Total renewables output hit 15% of the world’s energy mix last year, and it’s growing fast: solar and wind have quintupled their share of the mix in a decade (now 8%), overtaking nuclear in 2021 and likely hydro this year (hydro shrunk last year due to droughts, particularly in China).

But even still, as the world consumes more energy, that growing demand is being met mostly by fossil fuels rather than renewables.

So here’s the takeaway: at a global level, renewables don’t seem to be keeping up with – let alone displacing – fossil fuels. That’s why the head of the Energy Institute, the industry body that now publishes this report, wrapped things up with this little bomb: “arguably, the energy transition has not even started“.

INTRIGUE’S TAKE

So after decades of summits, declarations, and investments, our energy mix now looks – on aggregate – kinda similar to how it did in 1995.

The wild-card is solar. The boffins over at The Economist recently published some stats that capture solar’s epic evolution over the past half a century:

• Solar prices have dropped by a factor of 500
• The break-even point for solar projects has dropped by a factor of 1000, and
• Total photovoltaic shipments have increased by a factor of a million.

And yet at each stage, we’ve still consistently underestimated just how rapidly solar will grow next.

But even with all that exponential growth, this year’s report suggests that fast-growing solar has still really just enabled us to consume more energy, rather than displace our dirtier energy (fossil fuels). And if that continues, it looks a lot more like an energy addition rather than an energy transition.

Also worth noting:

• We just had our hottest May on record, capping off the 12th consecutive record month. The World Meteorological Organisation found in April that weather and climate-related disasters have hit Asia the hardest.
• Solar reportedly produced a record one fifth of the world’s electricity during the northern summer solstice over the weekend.
• BP (the UK-based oil and gas major) published this energy report every year from 1952 until 2023, when it handed the reins over to the London-based Energy Institute (with Kearney and KPMG).