What’s happening? Renewables made up 30% of global electricity generation in 2023, marking a historic high, according to a report by climate think tank Ember. The analysis of data from nations representing over 92% of global electricity demand found solar electricity generation increased by 23% YoY while wind generation rose by 10%. Solar generation surpassed coal by more than double, driven by a surge in installations in the latter half of the year. Ember predicts a decline in power sector emissions from 2024 onwards, suggesting a major shift as economies transition from fossil fuels, driven by decreasing costs and robust climate commitments. (edie)

Why does this matter? At the COP28 climate summit last December, world leaders pledged to triple global renewables capacity by 2030 to align with the Paris Agreement goal of limiting warming to 1.5C. Ember highlights that to reach this target, 60% of electricity will need to be generated by renewables within seven years, potentially almost halving power sector emissions. COP28 delegates also agreed to double energy efficiency improvements by the end of the decade, which is key to maximising electrification and meeting electricity demand. 

Radioactive input – When adding nuclear to the mix, Ember found that 40% of global electricity generation came from low-carbon sources in 2023. As a result, CO2 intensity of electricity generation hit a new record low of 480 gCO2/kWh, a 1.2% drop from 2022. However, hydropower generation dropped to a five-year low due to drought conditions, particularly in China, India, Vietnam and Mexico, where coal generation was predominantly used to cover the shortfall. This contributed to a 1% rise in global power sector emissions, which reached a record high of 14,153 million tonnes of CO2.   

Global demand – Ember also pointed out that global electricity demand increased by 627 TWh in 2023. While this was a record high, the 2.2% growth was below recent averages due to a decline in demand in OECD countries, especially in the US and the EU, with drops of 1.2% and 3.4%, respectively. Conversely, China’s demand surged by 6.9%. The increase was associated with the increased usage of electric vehicles (EVs), heat pumps, electrolysers for green hydrogen, air conditioning, and data centres. 

While electricity demand is expected to rise by 3.3% or 968 TWh in 2024, Ember forecasts that renewable growth will be even higher with an additional 1,300 TWh. The increase will likely be met by a rebound in demand in OECD countries alongside a rise in EVs, heat pumps, data centres and industrial growth in China and India. Consequently, fossil generation is projected to fall by 333 TWh, or 2%, marking a significant turning point in the shift to clean electricity. 

Clean tech investment rising – A separate report by the International Energy Agency found that global investment in the manufacturing of five critical clean energy technologies – solar PV, wind, batteries, heat pumps and electrolysers – jumped by 70% in 2023 to hit $200bn, accounting for approximately 4% of global GDP growth. Solar PV investment doubled, while battery manufacturing grew 60%. Therefore, solar PV module manufacturing now meets the IEA’s 2030 net-zero emissions scenario, and battery cell projects will fulfil 90% of that demand by the decade’s end. Additionally, 40% of clean energy manufacturing investments were in facilities set to become operational in 2024, rising to 70% for batteries.  

Race against time – As Ember highlights, how quickly emissions from the power sector fall depends on the speed at which the rollout of clean electricity continues. Certain challenges remain, including slower growth of nuclear and hydropower, bottlenecks in getting wind and solar connected to the grid and financing for developing countries to implement renewable electricity projects. Wood Mackenzie also recently warned that a five-year delay to the broader energy transition, driven by political uncertainties, elections and inflation, could put the world on track for 3C warming.