Apr 01 2022
Wind and Solar Hit 10%
The percentage of world electricity generated by wind and solar energy hit 10% in 2021 according to a recent analysis. Total clean energy (including nuclear, hydro, geothermal, and bioenergy) was 38% of world electricity, exceeding coal at 35%. Gas was 22%, for a total fossil fuel contribution of 57%. Also, total demand for electricity rose sharply in 2021, partly due to the bounce back from the pandemic, with coal rising 9% total and making up most of the increased demand – so this is a very mixed story.
According to the analysis there are two major forces at work across the world in determining the relative growth of the various sources of electricity, economics and regulations. In political fights over energy (including frequently in the comments to this blog) people will often assume one or the other factor is the only or the major factor involved. For example, the argument has been explicitly made that economics is the only relevant factor and policy is therefore irrelevant, but that is demonstrably not true. Neither is the notion that we can totally control the energy sector through policy without consideration of economic factors. That approach is likely to lead to policy overreach with backlash and unintended consequences. Both factors are involved, and a rational energy policy should consider the relevant economics.
For example, coal surged in 2021 because it is cheap relative to its major competitor, gas. Both rose in price, but gas rose much more than coal, so coal predominated. However, wind and solar are cheaper than both, so they also rose significantly. Even though they are now the cheapest option for adding new capacity, they were outpaced by coal because of regulations and infrastructure – showing that price alone is not the only determining factor.