Energy Transition Happening Slowly

The Energy Institute (EI), which has been providing impartial energy data since 1952, just released its Statistical Review of World Energy for 2022. EI has always prided itself on being “first and fast” with this data and analysis. Its figures can provide some much-needed context to constantly repeated claims that we are undergoing a rapid “energy transition.” Among its takeaways:

Fossil fuel consumption as a percentage or primary energy remained steady at 82 percent of world energy.

Coal consumption rose 0.16 percent worldwide in 2021, with increases in China and India more than offsetting declines in the rest of the world. Coal prices reached record levels in 2022, with European prices averaging 145 percent above those of the previous year.

Coal production in 2022 increased by 7 percent compared to the previous year, with 95 percent of the increase happening in China, India and Indonesia. Coal remained the “dominant” power generator, at about 35.4 percent of global power generation, slightly down from 35.8 percent the previous year. By comparison, natural gas generators produced 23 percent of world power, the same as the year before.

While the data paints a mixed picture,  renewables met 84 percent of increased demand for power generation. Lithium and cobalt production (necessary for batteries) increased by 21 percent in 2022.

Wind and solar continued rapid growth. In 2022, nearly all of the growth in global electricity generation (about 645 terawatt-hours) was met by the surge in wind and solar production, which grew by 251 and 263 terawatt-hours, respectively. Global wind energy output grew by 13 percent in 2022 and solar increased by 24 percent.

The U.S. saw similar percentage increases, with wind and solar generation growing by 15 percent and 24 percent respectively.  The U.S. Energy Information Administration reported on March 27 that in the U.S., “generation from renewable sources—wind, solar, hydro, biomass, and geothermal—surpassed coal-fired generation in the electric power sector for the first time.” It also noted that generation from all renewables “surpassed nuclear generation for the first time in 2021.”

In short, we are not undergoing the rapid “energy transition” being touted and promoted by some media sources. While real change is happening at a sustainable pace,  we do not have to worry that energy-related cargoes will disappear from the waterways any time soon.

According to the EIA, the U.S. was set to add a total of 5.1 billion cubic feet per day of LNG export capacity in the first half of 2023, beating the full-year record of approved volumes from 2014.