Renewable energy generation surpassed coal-fired power generation worldwide last year for the first time in about 100 years, data showed. Coal has ceded its position as the largest source of electricity, which it had held for the past century, to renewable energy. However, rising coal demand stemming from the Middle East energy crisis triggered by the U.S.-Iran war is expected to be a major variable in the transition of the power structure.
According to Ember, a UK-based energy think tank, on Tuesday, renewable energy generation from solar, wind and other sources reached 10,730 terawatt-hours (TWh) globally last year, accounting for 34% of total electricity production and surpassing coal, which generated 10,476 TWh for a 33% share. It marks the first reversal in 106 years, since 1919, when renewable energy accounted for 52% compared with coal's 48%. Coal had maintained its position as the largest source of power generation since the early 20th century, when humanity commercialized electricity.
While hydropower accounted for most renewable energy generation in 1919, solar and wind are now driving the growth of renewables. Carbon Brief, a climate and energy publication, reported that solar power generation last year rose more than 30% from a year earlier to 636 TWh, a record high, exceeding the amount of electricity that could be produced from all liquefied natural gas (LNG) exported through the Strait of Hormuz. Wind power generation rose to 205 TWh last year, the second-largest increase on record.
Coal-fired generation, by contrast, declined last year for the first time since 2020, during the COVID-19 pandemic. "While previous declines in coal generation stemmed from economic shocks such as the pandemic, this time it can be seen as a signal that a structural reorganization of the power market is underway," Ember said. In fact, renewable energy generation overtook coal generation in every region of the world except Asia. Coal generation also declined in China (0.9%) and India (3.3%), the largest greenhouse gas emitters.
Still, observers say it remains to be seen whether this trend will continue this year. With Middle Eastern oil and gas supplies destabilized by the closure of the Strait of Hormuz, demand for coal as an urgent alternative is rising. The trend is particularly pronounced in Asia, which is heavily dependent on Middle Eastern energy. Thailand and Bangladesh have raised coal power plant utilization rates to the maximum. Japan, which depends on the Middle East for more than 90% of its crude oil, has issued an emergency measure temporarily allowing the operation of aging coal-fired power plants, which had been restricted on environmental grounds, for one year starting this month. The Korean government has also lifted its cap on coal-fired power generation. With India and China likewise increasing their use of coal, analysts question whether the decline in coal generation seen last year can be sustained.