Global energy demand witnessed a 1% increase last year, and despite the unprecedented expansion of renewable energy sources, fossil fuels retained their dominant position, accounting for 82% of the global energy supply, as stated in the recent report by the industry’s Statistical Review of World Energy.
The energy markets faced considerable turmoil in the past year due to Russia’s invasion of Ukraine, which resulted in soaring gas and coal prices in Europe and Asia, reaching record levels.
In spite of the remarkable surge in renewable energy capacity, with a combined addition of 266 gigawatts, primarily led by solar power, oil, gas, and coal products maintained their firm hold on meeting the majority of energy demand in 2022. This resolute position comes despite renewable energy sources achieving their highest-ever growth.
Juliet Davenport, the president of the UK-based global industry body Energy Institute, expressed her concern about the situation, stating, “Despite further strong growth in wind and solar in the power sector, overall global energy-related greenhouse gas emissions increased again. We are still heading in the opposite direction to that required by the Paris Agreement.”
The annual report, which serves as a benchmark for the industry, is now published jointly by the Energy Institute and consultancies KPMG and Kearny, having taken over the task from BP (NYSE:BP), the author of the report since the 1950s.
Scientists emphasize the urgent need to reduce greenhouse gas emissions by approximately 43% by 2030, relative to 2019 levels, to have any chance of meeting the goals set by the international Paris Agreement, aiming to limit global warming to well below 2°C above pre-industrial levels.
Key highlights from the report on the energy landscape in 2022 are as follows:
Global primary energy demand grew by approximately 1%, which represented a slowdown compared to the previous year’s growth of 5.5%. Nevertheless, energy consumption remained around 3% higher than the pre-coronavirus levels of 2019.
Energy consumption increased in all regions except Europe, including Eastern Europe.
The share of renewable energy, excluding hydropower, in global energy consumption reached 7.5%, marking a 1% increase from the previous year. Fossil fuels accounted for 82% of global energy consumption, maintaining their substantial share.
Electricity generation increased by 2.3%, with wind and solar power reaching a record share of 12% in power generation. Nuclear power decreased by 4.4% but still contributed to 84% of net electricity demand growth. Coal remained the dominant source for power generation, holding around 35.4% share.
Oil consumption rose by 2.9 million barrels per day (bpd), reaching a daily consumption of 97.3 million bpd. However, the growth rate slowed down compared to the previous year.
Oil consumption was 0.7% lower than the pre-Covid levels of 2019. The majority of oil demand growth originated from increased consumption of jet fuel and diesel-related products.
Oil production witnessed a growth of 3.8 million bpd, mainly driven by OPEC members and the United States, while Nigeria experienced the largest decline.
Non-OECD countries primarily contributed to the growth of oil refining capacity, which increased by 534,000 bpd.
Despite experiencing record prices in Europe and Asia, global gas demand decreased by 3%, yet it continued to constitute 24% of primary energy consumption, slightly lower than the previous year.
Gas production remained stable compared to the previous year. Liquefied natural gas (LNG) production increased by 5% to 542 billion cubic meters (bcm), similar to the previous year, with notable growth from North America and the Asia-Pacific region.
Europe witnessed significant growth in LNG demand, increasing imports by 57%, while the Asia-Pacific region and South and Central America reduced their purchases. Japan surpassed China as the world’s largest LNG importer.
Coal prices soared, rising by 145% in Europe and 45% in Japan. Coal consumption reached its highest level since 2014, increasing by 0.6%. The growth was mainly driven by demand from China and India, while consumption in North America and Europe declined.
Coal output rose by 7% compared to the previous year, with China, India, and Indonesia being the primary contributors to this growth.
The growth rate of renewable power, excluding hydropower, slightly decelerated to 14%. Nonetheless, solar and wind capacity achieved a remarkable increase of 266 gigawatts, with solar energy leading the way. China stood out as the country with the highest additions to solar and wind power capacity.
Global energy-related emissions, including industrial processes and flaring, increased by 0.8%, reaching a new record high of 39.3 billion tonnes of CO2 equivalent.
The prices of lithium carbonate surged by 335%, while cobalt prices increased by 24%. Lithium and cobalt production saw a notable rise of 21%.
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