Renewables Meeting Only Half of Global Energy Demand Increase in Last Five Years: DNV Report

By Editor


A recently released report by DNV, the Energy Transition Outlook, has underscored that despite a substantial expansion of renewable energy capacity over the last five years, fossil fuels have met half of the new global energy demand.

Between 2017 and 2022, renewables accounted for 51 percent of the increase in energy demand, with the remainder being supplied by fossil fuels. The report emphasizes that renewables are currently meeting the rising demand for energy rather than replacing fossil fuels, and the absolute supply of fossil fuels is still on the rise.

Challenges in Achieving Climate Goals

The report highlights the growing difficulty in limiting global warming to the crucial target of 1.5°C. To align with the Paris Agreement’s goals, CO2 emissions would need to halve by 2030. However, DNV’s projections suggest that this reduction may not be achieved even by 2050. CO2 emissions are forecasted to be only 4 percent lower than today by 2030 and 46 percent lower by midcentury. Energy-related CO2 emissions continue to reach record highs, and the peak is anticipated in 2024, marking the onset of the global energy transition.

Remi Eriksen, Group President and CEO of DNV, noted, “Globally, the energy transition has not started, if, by transition, we mean that clean energy replaces fossil energy in absolute terms.” He emphasized that while the transition has commenced at specific levels—sectoral, national, and community—the global trend indicates increasing emissions from fossil energy.

Energy Security and Geopolitical Factors

Energy security has emerged as a significant driver of energy policy, influenced by changes in the geopolitical landscape. Governments are increasingly valuing locally sourced energy and are willing to invest more for it. This shift has affected the energy transition pace, with regions like the Indian Subcontinent transitioning at a slower pace due to a higher reliance on coal, while Europe’s transition accelerates with a focus on climate, industrial, and energy security alignment.

Renewables Poised to Overtake Fossil Fuels

While the transition is yet to gain full momentum, once it does, renewables are expected to surpass fossil fuels rapidly. Most energy additions from now on are anticipated to be in wind and solar energy, growing 9-fold and 13-fold, respectively, between 2022 and 2050. Electricity production is predicted to more than double, bringing increased efficiency to the energy system. The fossil to non-fossil energy mix is projected to shift from the current 80/20 split to a 48/52 split by mid-century.

Solar installations reached a record 250 GW in 2022, and wind power is expected to deliver 7 percent of global grid-connected electricity, with installed capacity doubling by 2030. However, near-term challenges, such as transmission and distribution grid constraints, are emerging as bottlenecks for renewable electricity expansion and related distributed energy assets in various regions, including North America and Europe.

The world energy system will move from an energy mix that is 80 percent fossil-based to one that is about 50 percent non-fossil-based in the space of a single generation. While this transition is significant, it may not be rapid enough to meet the ambitious goals set by the Paris Agreement.

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