Russia’s prolonged war in Ukraine roiled global energy markets, forcing fossil fuel prices up, and helped cement energy security as a dominant policy area focus in Europe and beyond. These trends and the continued price competitiveness of renewable energy are combining to boost global solar and wind capacity to historic heights.
IEA Report Outlines Record Expectations for 2023
The International Energy Administration’s (IEA) mid-year Market Update released last month notes the historic growth in renewable energy generation expected this year and next. The agency ascribes much of the expected growth to pro-renewables policy momentum, high fossil fuel prices, and renewed concerns about energy security both arising from Russia’s now years-long war in Ukraine.
The report’s key findings include:
- Global renewable capacity additions are on pace to increase by 107 gigawatts (GW), the largest absolute increase ever, to more than 440 GW in 2023.
- Solar PV capacity accounts for two-thirds of this year’s projected increase in global renewable capacity.
- Cumulative global renewable energy capacity is on pace to reach over 4,500 GW by the end of 2024. This is equal to the total combined power capacity of the United States and China.
Wind & Solar Overtake Coal for the First Time Ever
The renewable energy sector’s historic global capacity growth isn’t the only positive news wave the industry is riding these days. According to analysis by E&E News, wind and solar combined to produce 252 terawatt-hours (TWh) in the first 5 months of 2023, eclipsing the 249 TWh produced by coal over the same time period. This marks the first time ever that solar and wind energy sources collectively outperformed coal over any consecutive 5-month period.
This symbolic milestone seemingly happened in the blink of an eye. Less than two decades ago, coal accounted for almost 50% of the United States’ total energy production. In 2007, coal production topped 1,171.5 million short tons – a record high. Those days now seem like a distant memory. The Administrator of the U.S. Energy Information Administration (EIA), Joe DeCarolis, stated earlier this year, “we expect that the United States will generate less electricity from coal this year than in any year this century.” Put more bluntly, Andy Blumenfeld, an industry analyst at McCloskey by Oil Price Information Service (OPIS) recently told E&E News, “from a coal perspective, it has been a disaster…The decline is happening faster than anyone anticipated.”
The pace of coal plant closures in the U.S. is only expected to accelerate as the economics of coal increasingly lose out to those of renewables. According to the Institute for Energy Economics and Financial Analysis, the U.S. is on track to close half of its coal-fired generation capacity by 2026, just 15 years after hitting its peak in 2011.
Will the Momentum Continue?
The decline of coal in the United States has been steady over recent years. The brief exception being in 2022 when global gas markets were roiled by Russia’s invasion of Ukraine, and the ensuing energy security concerns that forced many countries in Europe to rely on the “quick fix” of doubling down on coal plants.
The global pendulum has since shifted back on the heels of a mild winter in both Europe and the United States. A recent EIA report noted that 11 GW of U.S. coal capacity was retired from June 2022 to May 2023, and the agency anticipates there being 15% less coal-fired generation in the U.S. this summer compared to last.
Meanwhile, the momentum being experienced by the solar and wind industries is expected to swell even further. According to the EIA, the U.S. electric power sector added an estimated 14.5 GW of solar generating capacity and about 8.0 GW of wind capacity during the 12 months ending May 31, 2023. The EIA expects solar generation to increase by 24% (10.8 TWh) this summer versus last summer, which beats the expectations for every other energy source.
A confluence of world events, policy decisions, and economics have combined to put the solar industry on stable footing around the world. On the latter point, solar PV costs have fallen a remarkable 76% since 2010 according to the Lawrence Berkeley National Laboratory.
The summer’s sweltering heat reminds us of the urgency to address the global effects of climate change. The growing prominence of solar energy in the global energy landscape coupled with the continued decline of the emissions-heavy coal industry offers hopeful signs for the future.
Cover Photo Source: Syracuse.com
