When Russia’s invasion of Ukraine put the world on red alert over their energy security last year, fear spread that the clean energy transition would be derailed as retired coal plants came back online, and oil and gas companies walked back their climate pledges amid soaring profits. But one year later, not only have renewable sources made even further inroads in the global energy system, some experts are saying global fossil fuels use could start permanently declining as early as this year.
The Ukraine War likely ended up accelerating, not delaying, the clean energy transition, as a short-term surge in fossil fuel use is being overshadowed by many countries’ turn to renewables and nuclear power to guarantee their energy security, the International Energy Agency, a watchdog group, announced in February. Now, the share of global electricity generated by renewables including wind and solar power is growing so fast there may be no going back, according to a new report released Wednesday by research firm Ember, an independent environmental non-profit and think tank.
Renewables and nuclear power were responsible for a record 39% of global electricity generation last year, according to the report. The gains came almost entirely from new wind and solar installations, which now account for a record 12% of global electricity generation, up from 10% in 2021. The growth of wind and solar alone last year was enough to meet 80% of all new electricity demand, while all renewables together satisfied 92%.
“In this decisive decade for the climate, it is the beginning of the end of the fossil age. We are entering the clean power era,” Małgorzata Wiatros-Motyka, Ember’s senior electricity analyst and the report’s lead author, said in a statement. “A new era of falling fossil emissions means the coal power phasedown will happen, and the end of gas power growth is now within sight.”
Reaching peak emissions
The surge in wind and solar use last year significantly outpaced a slight uptick in coal-fired generation, while natural gas consumption declined slightly as high prices last year discouraged its use, according to the report, which analyzed data from 78 countries representing 93% of global electricity demand.
Renewables’ surge in affordability and the declining appeal of fossil fuels could mean that the global energy system is nearing a tipping point, where there is little incentive to continue tapping coal and gas to satisfy our electricity needs.
The report said that peak emissions for the power sector, when greenhouse gas emissions from electricity generation culminate before starting to trend downwards, could happen as early as this year. The UN has warned that global emissions need to peak before 2025 to avoid more catastrophic warming scenarios, and that drawing down emissions from electricity generation and heating is critical to achieving that goal, as the power sector accounted for 46% of emissions increases in 2021. The power sector needs to reach net-zero emissions by 2040 to stay consistent with climate goals, according to the International Energy Agency.
Plunging prices for renewables and fossil fuels’ rising costs are combining to make peak power sector emissions achievable this year, largely due to the Ukraine War, which the Ember report referred to as a “turning point” in the world’s transition to clean power.
While many advanced economies have been phasing out coal for years, natural gas has been a harder habit to kick, but Russian President Vladimir Putin may have expedited the transition last year when he unilaterally shut down the majority of Russia’s natural gas pipelines to Europe, its largest historic buyer.
While Europe has turned to the U.S. and the Middle East for liquified natural gas imports, new solar installations in the EU were 50% higher than in 2021. And the continent’s revised energy policy announced last year calls for 210 billion euros ($231 billion) in new investments through 2027, the bulk of which is earmarked for renewables and partly financed by the nearly 100 billion euros Europe will save on Russian fuel imports. The plan also increased the continent’s 2030 renewable energy target in a bid to increase domestic energy security.
But renewables were cost-competitive with coal and gas long before the stark reduction in fossil fuel use. Between 2020 and 2022, the cost to generate electricity from onshore wind fell by 15% and 13% for solar power. In the U.S., where clean energy technology is receiving a massive boost from the Biden administration’s Inflation Reduction Act, solar panels and wind turbines were found to be cheaper than 99% of coal-fired power plants earlier this year.
Questions hang over the ability to scale renewables fast enough in countries where electricity demand is still growing, namely China and India, which according to the report made up three quarters of new demand over the past decade. In China, clean energy sources met 77% of new demand last year, while they accounted for 38% of demand growth in India, the report found. But both countries remain heavily reliant on coal, especially China, which last year was responsible for over half of global coal-fired electricity generation. And unlike Europe, China remains an important buyer of Russian fuel, trade that is expected to increase significantly in the coming years.
The report said that the energy transition’s impressive gains are a testament to successful early policies and investments in renewables, but warned that there is still a mismatch in many countries between stated climate ambitions and actual policy, a divergence that needs to be reconciled to hit clean energy goals.
“Change is coming fast. However, it all depends on the actions taken now by governments, businesses and citizens to put the world on a pathway to clean power by 2040,” Wiatros-Motyka said.
Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.