Energy Review: Global Growth Sets New Records in 2023

    Dive into the electrifying world of renewable energy as we unveil a global energy revolution in this riveting review! Brace yourself for record-breaking highs in renewable capacity additions across Europe, the United States, and Brazil. But the real star of the show? Guess who takes the spotlight with an extraordinary feat, commissioning an astounding amount of solar photovoltaic (PV) capacity. In 2023 that matches the entire world’s efforts in the preceding year. Get ready to be amazed and inspired by the monumental strides toward a sustainable future!

    Record-Breaking Growth

    In 2023, the global landscape of renewable energy, as highlighted by the International Energy Agency (IEA) in their January report. We witnessed significant growth, reaching a total renewable capacity of nearly 510 gigawatts (GW). This represents a remarkable 50% increase, marking a milestone for the year.

    This energy review underscores the swiftest growth rate observed in the past two decades, emphasizing the 22nd consecutive year of setting new records. Notably, solar photovoltaic (PV) installations emerged as the driving force, constituting three-quarters of all global renewable capacity additions. China played a pivotal role, commissioning as much solar PV in 2023 as the entire world did in 2022. On top of that also experiencing a 66% year-on-year growth in wind additions.

    Projections indicate that the global renewable capacity is expected to reach 7,300 GW by 2028 under existing policies, although overcoming challenges and implementing policies more rapidly could propel this figure to over 11,000 GW, aligning with the IEA’s Net Zero Emissions by 2050 Scenario. These figures underscore a sustained and escalating momentum towards a future dominated by sustainable and low-carbon energy sources.

    The report also emphasizes the critical role of governments in addressing challenges and implementing policies to achieve the ambitious goal of tripling global renewable power capacity by 2030.

    Cumulative renewable electricity capacity in the main and accelerated cases and Net Zero Scenario

    Solar PV Dominance

    Solar photovoltaic (PV) has dominated the year 2023 for several reasons, showcasing its pivotal role in the global renewable energy landscape. Key factors contributing to the dominance of solar PV are the following:

    1. Cost Competitiveness:

    Solar PV is increasingly cost-competitive. With the prices of PV modules experiencing a significant decline, once again, in 2023. The reduced costs make solar PV installations more economically attractive compared to other energy sources.

    2. Global Manufacturing Expansion:

    The manufacturing capacity of solar PV substantially expanded, reaching three times the 2021 levels by the end of 2023. This surge in production makes solar PV more widely available. Hence, contributing to its dominance in renewable capacity additions.

    3. Chinese Leadership:

    China, exhibited extraordinary acceleration in solar PV installations. Last year alone, China commissioned as much solar PV as the entire world did in 2022. The country’s commitment to renewable energy and the economic attractiveness of solar PV technologies positioned it as a global leader in solar capacity additions.

    4. Policy Support:

    Supportive policy environments in various regions, including China, the United States, the European Union, India, and Brazil, drive the growth of solar PV. Incentives, subsidies, and clear regulatory frameworks encourage businesses and consumers to adopt solar PV installations.

    5. Global Renewable Targets:

    Many countries and regions worldwide set ambitious renewable energy targets, and solar PV is a preferred choice for meeting these goals. The emphasis on clean energy and reducing carbon emissions aligns with the characteristics of solar PV technology.

    6. Technological Advances:

    Ongoing technological advancements in solar PV improved efficiency, making it a more reliable and efficient source of electricity generation. Innovations in PV module design and energy storage solutions further enhance the appeal of solar PV systems.

    7. Consumer Adoption:

    Increased awareness of environmental issues and a growing commitment to sustainability among consumers drive demand for solar PV. Residential and commercial consumers, seeking to reduce their carbon footprint and energy costs, increasingly turn to solar PV.

    In summary, the dominance of solar PV in 2023  to its cost competitiveness, global manufacturing expansion, strong policy support, leadership from key countries like China, alignment with renewable targets, technological advances, and growing consumer adoption. As solar PV continues to evolve, its role in the global energy transition is likely to strengthen further.

    COP28 Urgency outlined in the energy review

    COP28, the 28th Conference of the Parties, marked a pivotal moment in the global effort to address climate change, as urgency took center stage in the discussions. The International Energy Agency (IEA) urged governments to support five key pillars for action by 2030. Thus emphasizing the critical need to triple global renewable power capacity.

    Against the backdrop of the fastest growth rate in renewable capacity additions in the past two decades. The urgency expressed at COP28 underscored the need for swift and decisive measures to accelerate the transition to sustainable energy sources.

    The Global Stocktake text, agreed upon by 198 governments at COP28, mirrored several IEA priorities. Amongst those are the ambitious goals of tripling renewables and doubling the annual rate of energy efficiency improvements each year until 2030.

    The urgency emanating from COP28 reflects a collective call to bridge the gap between current growth trajectories and the more ambitious targets essential for achieving a net-zero emissions future by 2050, reinforcing the global commitment to combat the urgent threat of climate change.

    Global Growth Trajectory and G20’s Role

    The comprehensive analysis presented in the report anticipates a substantial growth trajectory in the global renewable energy landscape. The forecast suggests that, under existing policies and market conditions, the world is poised to witness a surge in renewable capacity, reaching an impressive 7,300 GW by the year 2028. This projected expansion signifies a notable advancement in the renewable sector, showcasing the persistent global commitment to transitioning towards sustainable and low-carbon energy sources.

    Central to this transformative journey is the pivotal role played by the Group of Twenty (G20) nations, which currently command almost 90% of the global renewable power capacity. The report highlights the immense potential of these influential nations to triple their collective installed capacity by the year 2030. This ambitious target aligns with the broader global objective of achieving significant strides in renewable energy deployment. The G20’s commitment to renewable energy becomes increasingly crucial as they emerge as key players in steering the world towards a future dominated by clean and sustainable power sources.

    Growth acceleration

    The energy review underscores the imperative for an accelerated pace of installations on a global scale. Recognizing the challenges and opportunities in the renewable energy landscape, the report emphasizes the pressing need for collaborative efforts and swift actions. Overcoming hurdles such as policy uncertainties, grid infrastructure limitations, administrative barriers, and financing gaps is crucial to realising the full potential of renewable energy. The IEA envisions a concerted global effort to address these challenges, fostering an environment conducive to the rapid expansion of renewable capacity.

    In essence, the anticipated global growth trajectory in renewable energy is not just a numerical projection but a testament to the collective will and determination of nations worldwide. The G20’s role in tripling their installed capacity amplifies the significance of international collaboration. Therefore, setting the stage for a transformative shift towards a sustainable and resilient energy future. The report serves as a comprehensive roadmap, outlining the key milestones and challenges, urging nations to embark on a trajectory that ensures a cleaner, greener, and more sustainable global energy landscape.

    Share of renewable electricity generation by technology energy review 2023, 2000-2028

    Five-Year Projections and Global Milestones

    The next five years are crucial in achieving significant renewable energy milestones, including renewables surpassing coal as the largest electricity source in 2025 and wind and solar PV outpacing nuclear electricity generation. China’s contributes almost 60% of new renewable capacity expected to become operational globally by 2028.

    Biofuel Expansion

    The report highlights a significant and dynamic expansion in biofuels, projecting impressive growth to outpace the last five years by 30%. Emerging economies, with Brazil at the forefront, play a pivotal role, contributing to a forecasted 70% expansion in global biofuel demand over the forecast period.

    Brazil, in particular, takes a substantial 40% share of the predicted biofuel expansion by 2028. This robust growth primarily results from the steadfast implementation of strong biofuel policies, rising demand for transport fuel, and the abundant potential of feedstocks.

    The forecast emphasizes how biofuels, especially those used in the road transport sector, emerge as the primary source of new supply, constituting nearly 90% of the overall expansion. The seamless synergy between electric vehicles (EVs) and biofuels emerges as a powerful combination. It is forecasted to offset more than 7% of the anticipated oil demand for transport by 2028.

    As the world seeks cleaner alternatives, this biofuel expansion represents a pivotal shift towards sustainable energy solutions, with the potential to play a vital role in curbing oil dependence and mitigating environmental impact.

    The role of Electric Vehicles (EVs) in the energy review

    Globally, the momentum for electric vehicles (EVs) is growing, surpassing biofuels in gasoline consumption by 2028. This shift is particularly evident in the United States, Europe, and China, where governments actively implement robust EV policies. Major automakers such as Tesla, Nissan, and Volkswagen are leading the charge, making significant investments in electric vehicle technology.

    The notable transition to EVs plays a pivotal role in reducing greenhouse gas emissions and aligns with international efforts to combat climate change. The forecast predicts that EVs will offset a substantial 4 million barrels of oil-equivalent per day by 2028, marking a crucial milestone in the transition to sustainable transportation.

    Renewable Heat expanded, yet needs to expand at a faster rate

    Renewable heat witnessed significant expansion globally, rising from 13% to 17% of total heat consumption by 2028. This growth, driven by increased adoption of electric heat pumps and boilers in buildings, was particularly pronounced in China, the European Union, and the United States.

    Supportive policy environments, updated targets, financial incentives, and the implementation of renewable heat obligations contributed to this positive trend. However, the pace of expansion remains insufficient to address the use of fossil fuels for heat. This development is still posing a challenge to meet the goals of the Paris Agreement. Without stronger policy action and broader energy efficiency improvements, the global heat sector alone could consume more than one-fifth of the remaining carbon budget for a 1.5°C global warming pathway between 2023 and 2028. The energy review calls for urgent measures in need to accelerate renewable heat adoption and align with more ambitious climate goals.

    Conclusion

    In conclusion, the energy review highlights that the world has made remarkable strides in renewable energy. An increase of almost 50% in annual capacity additions to nearly 510 gigawatts of total capacity in 2023.

    This momentum signifies a collective commitment towards sustainable and low-carbon energy sources. This is evidenced by the 22nd consecutive year of record-setting growth. As nations address the urgency expressed at COP28, the report underscores the need to overcome policy uncertainties, enhance grid infrastructure, streamline administrative processes. Further, it address financing challenges to achieve the ambitious goal of tripling global renewable power capacity by 2030.

    The G20 plays a pivotal role in this trajectory, with the potential to triple their collective capacity. Despite hurdles, the forecast points to a future where wind and solar PV dominate. Therefore, marking significant milestones in electricity generation.

    The review also sheds light on the expansion of biofuels, the rise of electric vehicles, and the imperative to accelerate renewable heat adoption. In navigating the dynamic landscape of renewables, the energy review underscores the vital importance of policy advancements, international collaboration, and technological innovation.

    The future is now, and it’s electrifying!

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