Wind and solar production capacities are growing faster than liquefied natural gas and nuclear ever did. A recent report from Shell Plc examined and compared the growth trajectories of these four energy forms, which have all emerged within the past 60 years, and which tell a very clear story about how the global energy sector is growing and changing. Put simply: our youngest and cleanest energy technologies are the fastest growing the world has seen in at least 50 years.
Renewables are taking off. Not only have they become cost-competitive with major fossil fuels, in many cases they are more cost effective. And on top of these dropping costs, governments around the world are increasingly sweetening the deal with hefty incentive and subsidies packages. In the United States, the Biden Administration recently passed the Inflation Reduction Act, which offers billions of dollars to support the growth of the domestic clean energy sector. The Act may not do a damn thing to actually reduce inflation, but it does stand as the single-biggest climate bill ever passed by U.S. Congress. In the European Union, leadership has responded with a comparable plan called REPowerEU. While subsidies and tax breaks, along with improved renewable energy technologies and economies of scale, have given a massive boost to the solar and wind power sectors, the breakneck growth of renewable energies is increasingly related to issues of energy security. The recent (and ongoing) energy crisis emanating from Russia’s illegal invasion of Ukraine has made waves in energy markets around the world, spooking global leaders. The result has been a mad dash to shore up domestic energy production capacity to the greatest extent possible, as quickly as possible.
Related: Recession Fears Loom Over Oil Markets Once Again
In Europe, this has led to record-breaking addition of solar power. And last year, for the first time in history, solar and wind power produced more energy and natural gas in Europe. According to figures released this year by the European Electricity Review, solar and wind accounted for more than a fifth (22%) European energy in 2022, just edging out natural gas at 20%.
Shell measures the growth of these power sectors from a baseline of when they began to contribute meaningfully to the global energy mix. This bar is set at when any certain energy source contributes at least one exajoule per year (about the annual energy use of Mexico). This makes it easy to compare, for example, solar and nuclear head-to-head, by seeing where their growth rate is at one year past first exajoule, three years past, etc.
From this comparison we can see the striking growth of renewables, but we can also see another trend, which complicates the picture a bit. While solar and wind are seeing a much steeper growth trajectory than nuclear and liquefied natural gas did, energy demand, too, has seen an extreme growth trend. “Global energy consumption has more than doubled in the 50 years since nuclear reached the 1 exajoule mark.,” reports Bloomberg. “In 1973, the world consumed 238 exajoules of energy; in 2021, it consumed 595.” For this reason, although wind and solar are outpacing those older technologies, they are overall contributing less to the global energy mix.
This has major implications for how much of an impact these nascent technologies have had on the global energy mix and its associated carbon footprint: “In the year that nuclear first appears as a significant energy contributor, it supplied about 0.4% of the energy the world used. By the time that LNG hit an exajoule, it provided about 0.3%. By 2016, when solar provided its first exajoule, it met less than 0.2% of much-increased global energy demand.” 316 gigawatts of solar power are already slated to be added to the global fleet this year alone, and the prognosis is promising. Many feel that the clean energy revolution is just now starting in earnest. And it’s not a moment too late.
By Haley Zaremba for Oilprice.com
More Top Reads From Oilprice.com:
- Citi Doesn’t See $100 Oil Despite Shock OPEC+ Cuts
- Inventory Draws Across The Board Push Oil Prices Higher
- Middle East Oil Prices Jump After Surprise OPEC+ Cuts