It is possible to briefly describe the development of the global energy sector over the past decade. most. More factories under construction; more descendants of these plants; more renewables everywhere,” but also more coal and gas.
The 2022 Energy Transition Trends Report, recently published by research firm BloombergNEF, shows signs of profound change in the industry. Wind and solar energy currently account for 11 percent of the world's energy production. Of the newly added power generation capacity in 2021, solar accounted for 50 percent and wind for 25 percent. At the same time, last year also saw an unprecedented rise in coal-fired power generation thanks to the economic recovery from the worst effects of the Covid-19 pandemic. This is 750 terawatt hours more than in 2020, which is a very high level between the annual energy consumption of Brazil and Japan, the sixth and fifth largest national electricity consumers in the world. Carbon dioxide emissions from the energy sector also increased by 7 percent year on year.
A deeper dive into the report reveals other key drivers. First, the development and construction of new generating capacity is highly concentrated geographically. The vast majority of new capacity is located in a small number of markets.
The wind is the most concentrated. Between 2012 and 2021, the top 10 wind energy markets accounted for 89 percent of all new installed capacity during that period. Solar power is slightly more popular, with the top 10 markets accounting for 85% of all installations in the same period. At the time, the largest markets for solar energy were China, the US, Japan, and India; China, the US, India and Germany were the largest producers of wind power.
And then there's coal. Two markets alone, China and India, accounted for 78 percent of all new coal-fired power generation capacity over the past 10 years. China alone accounted for 62 percent of the total 414 gigawatt installations. India is the only market with at least 100 gigawatts of installed capacity. Vietnam and Indonesia, which each built 21 gigawatts between 2012 and 2021, are in third place.
Another way to look at trends is the number of countries developing industrial power plants (which BloombergNEF classifies as over 1 megawatt built per year).
In 2012, more countries added hydropower on a commercial scale than solar or wind power. In 2012, almost 70 countries built hydroelectric power plants. 55 solar energy buildings; 48 wind farms have been built. Ten years later, hydroelectric power has dwindled to 47 countries. Solar has more than doubled to 112, and wind is about the same and is currently under construction in 53 countries.
Market activity for all three fossil fuel technologies (oil, natural gas and coal) is declining. In 2012, about 70 countries were building electricity from oil, more than 60 were adding gas, and 24 were using coal. Ten years later, the expansion of oil-based electricity generation has been reduced to 30 countries, gas to 42, and coal to 15. Coal is a global climate problem. its expansion is also concentrated in very few places.
A notable trend is the overall expansion of the solar energy market. Although project development is still very concentrated, solar generation, energy from reserves, is declining. In 2012, 90 percent of all solar energy was produced in 10 countries, compared to 80 percent in the previous year.
This is certainly good for solar energy and the countries that build it. Market diversification with a wider distribution of local benefits, such as reduced emissions and protection from variable fuel costs, is a feature of solar energy.
It is also worth looking into why the number of active wind energy markets has barely grown since 2012. One reason is simply the methodology. The 1 megawatt solar project that will be included in this BNEF report is made up of thousands of individual panels, but it is quite small. A megawatt can be on a rooftop, an open space, or a small island.
In contrast, there are virtually no 1 megawatt wind power projects with today's utility-scale turbines. A megawatt is a fraction of the power of a single turbine, and some new offshore turbines up to 14 megawatts are under development. In other words, solar energy is practically being phased out to reach smaller markets; ride the wind until you grow up.
Given their different magnitudes, this proves that wind energy is always creating new markets. As a result, it is becoming cost-competitive in more and more places, while also spreading the industry knowledge required for heavy engineering production.
As for solar energy, please. more markets, more scale. Solar installations are expected to reach 250 gigawatts this year, a quarter of all installed capacity to date.
