Solar is on track to deliver for net zero, while wind needs to be deployed faster. Coal continues to demonstrate its staying power, remaining the main electricity source in 2023, with use continuing to increase.

WHAT: Renewables accounted for 30% of global power generation last year for the first time.

WHY: Growth in renewables was chiefly driven by a surge in solar power generation.

WHAT NEXT: While progress on renewables deployment is encouraging, coal continues to see increased use and it still accounts for over a third of the global power mix.

 

Renewables generated 30% of global electricity for the first time in 2023, on the back of strong growth in solar and wind generation, according to a new report by London-based energy research firm Ember, which predicted further gains in solar this year thanks to low panel prices.

From contributing a mere 0.2% of electricity in 2000, solar and wind supplied a record 13.4% last year, Ember said. The biggest gains were seen in China, which accounted for 51% of extra solar generation and 60% of new wind generation globally. Combining renewables and nuclear, the world generated nearly 40% of its power from low-carbon sources in 2023, according to the report.

Gains in renewables and nuclear last year brought the CO2 intensity of global power generation to a record low that was 12% less than its peak in 2007, Ember said. Absolute power sector emissions would have also fallen if hydroelectric generation had not slumped to a five-year low as a result of drought, according to the research firm. The shortfall was largely covered by increased coal-fired generation.

“Nonetheless, the latest forecasts give confidence that 2024 will begin a new era of falling fossil generation, marking 2023 as the likely peak of power sector emissions,” Ember said.

 

Solar

“Solar is leading the energy revolution,” Ember said in the report. “It was the fastest-growing source of electricity generation for the 19th year in a row, and surpassed wind to become the largest source of new electricity for the second year running.”

The power source supplied a record 5.5% of global electricity in 2023, with 33 countries generating more than a tenth of their power from solar.

Solar saw a record absolute increase in generation last year, producing twice as much extra power last year than coal did, the firm said. And in light of the surge in installations at the end of 2023, the power source is on track for an even larger increase in generation this year.

Solar capacity additions were 76% higher in 2023 than in the previous years, amounting to 444 GW. The technology has seen a boom in deployment thanks to sharp declines in costs, supportive policy, improvements in efficiency and increased manufacturing capacity. Ember said  this trend followed Wright’s Law of technology learning curves, whereby technology gets cheaper as it is deployed more, and is deployed more as it gets cheaper.

Specifically, the amount of solar manufactured in China surpassed demand, triggering a more than 50% drop in spot prices for modules. These prices are now much lower than what would be expected under Wright’s Law. The glut in module supply should persist into this year. 

The growth in solar power capacity far outstripped that of actual solar power generation, which increased by only 23% last year. This was owing to the locations of new additions, Ember said, as well as a growing problem with underreporting.

“Nonetheless, solar generation in 2024 should reflect the capacity boom of this year and next,” the firm said.  

Based on 2023 additions and BNEF’s first-quarter solar installation outlook this year, Ember expects solar generation to come to 2,150-2,350 TWh in 2024, which would represent a year-on-year growth of at least 32%. 

The deployment of solar has been so successful that the International Energy Agency (IEA) raised its projected contribution in its net-zero by 2050 scenario from 48% in 2021 to 55% in its 2023 update. Meeting this goal will require solar to achieve a compound annual growth rate of 9% through to the end of this decade, which is about a third of the 23% rate between 2012 and 2022. The IEA estimates that the amount of land needed to support this growth rate is a mere fraction of the land available.

Still, Ember pointed to some challenges that needed to be overcome, including grid congestion and insufficient storage.

“With long construction lead times, investing in new transmission capacity now will maximise the benefits of solar,” Ember said. “In the meantime, connect-and-manage approaches to planning – ensuring a quick grid connection with some curtailment risk in  exchange – can ensure congestion does not unnecessarily slow the energy transition.”

Meanwhile, there continues to be a significant disconnect between solar resources and solar power deployment, with many sunny countries yet to harness the technology’s potential. Many countries that have this untapped potential face financial and logistical challenges to deployment. 

“Africa alone accounts for one-fifth of the global population and has huge solar potential, and yet the region currently attracts just 3% of global energy investment,” Ember said.

 

Wind

Global wind generation also surged to a record high in 2023, rising by 9.8% to contribute 7.8% of global electricity. Put in context, this was enough generation to power all of Poland, Ember said. 

As is the case with solar, China accounts for the most wind power globally, generating twice as much as the US and five times as much as Germany. Ember noted that 32 countries now relied on wind for more than 10% of their power, with Denmark leading with a share of 58%. In terms of regions, Europe has the highest share of wind generation. 

While solar saw its biggest growth yet in generation in 2023, for wind, last year saw only the third-biggest addition on record, falling short of the increases seen in 2021 and 2022. 

According to the IEA’s net-zero scenario, wind generation needs to more than triple by 2030 to cope with rising energy demand and phase out fossil fuels. It will need to expand to 31% of the global power mix by mid-century.

Ember noted that global wind generation would need to rise by 16.2% every year out to 2030 to align with its projected growth in the IEA scenario. This means an acceleration is needed, as this required growth rate is almost twice as much as what was seen in 2023 and two percentage points higher than average growth between 2015 and 2023.

 

Coal

In less welcome news, coal power generation also rose to a new record in 2023, as a result of low hydropower output. The results for last year highlighted coal’s staying power. It accounted for 35.4% of total electricity generation globally, remaining the single largest source of power and down only 0.3 percentage points from its share in 2022. Indeed, its share has seen limited change since 2000, when it was 38%. In fact, the share continued to expand up until 2013, when it peaked at 41%.

Similarly, coal power generation increased by 1.4% in 2023, which was on trend with the 1.3% annual growth seen in 2021 and 2022.

The IEA projects that coal power generation must be almost entirely phased out by 2040 if the world is to reach net zero by 2050. This pathway requires coal power generation halving by 2030 – which would entail a 8.5% annual decrease between now and then – and its share diminishing to 14% by the end of the decade.

So far, the only cause for optimism is in OECD countries, where coal power generation dropped on average by 5% annually between 2016 and 2022, with the rate of decline accelerating to 13% last year.

This article is from bne IntelliNews’ sister publication NewsBase that covers global energy issues. Sign up for a two-week trial here.