July 22, 2024
As the global shift towards sustainable energy intensifies, it is essential to understand the evolving landscape of electric power generation. Incorrys projections foresee a significant transformation in the electric power generation mix over the next seven years; out to 2030.
Total global power generation, from all energy sources, grew at an average annual rate of 2.8% between 2010 and 2023 from under 20,000 TWh to almost 28,000 TWh. Coal and natural gas have been the primary energy sources for power generation accounting for about 60% of the total in 2023 (37% and 23% respectively), down from 67% in 2010.
Incorrys expects total generation to grow at a robust 3.3% annually through 2030 reaching 35,000 TWh. To meet this growth of over 7,000 TWh, all forms of electric generation are forecast to grow, with the exception of coal which remains relatively flat; note that Incorrys does not expect any great reduction in global coal-fired generation through at least 2030. While nuclear, hydro, and biogas, forecast to grow at an annual rate of 3%, contribute about 1,800 TWh to the growth (about 25%), the majority (about 4,700 TWh or 2/3) is met by wind and solar. Natural gas generation accounts for the remaining 600 TWh or 8% of the expected growth. Now, let’s take a closer look at the pivotal drivers of this structural change in electricity generation – primarily wind and solar, and the key role natural gas plays.
2023 Market Share 2030 Market Share
Wind Energy
Advancements in technology, increased investments, and supportive government policies, have led to substantial growth in wind generation over the past few decades, the fastest growing renewable energy source.
Wind power generation increased from just 340 terawatt-hours (TWh) in 2010 to 2,300 TWh in 2023, a 16% annual growth rate representing 8% of the total market. Wind power is expected to reach over 4,600 TWh in 2030, increasing its market share to 13% of the global generation mix. It should be noted that the majority of wind farms are found onshore although more costly offshore projects do contribute.
This rapid growth underscores the global commitment to harnessing wind energy as a critical component of the energy mix. The expansion of wind farms, improvements in turbine technology, and supportive government policies are driving this growth. Additionally, offshore wind projects are expected to contribute significantly, providing a reliable and abundant source of clean energy.
Solar Energy
Solar power generation, like wind, has experienced remarkable growth driven by technological advancements, declining costs and government support. Solar generation has increased from near zero TWh in 2010 to over 1,400 TWh in 2023, a 34% annual growth rate and a 5% share of the global generation mix. Incorrys is forecasting solar generation to increase at an annual rate of 15% through 2030 reaching 3,900 TWh; 11% of the global power generation mix.
The rapid adoption of solar energy can be attributed to several factors, including the declining cost of solar panels, improved efficiency, and increased capacity of solar power plants. Residential, commercial, and industrial sectors are all contributing to this growth, with large-scale solar farms playing a pivotal role. Furthermore, innovations in energy storage are enhancing the reliability of solar power, making it a more viable option for continuous clean energy supply.
Natural Gas
While renewable energy sources like wind and solar are gaining prominence, natural gas remains a critical part of generation as it acts as a “bridge” fuel providing reliability and stability to the power grid. Incorrys is forecasting gas-fired power generation to grow at an annual rate of about 1.5%, considerably lower than wind and solar, from 6,400 TWh in 2023 to almost 7,000 TWh in 2030; 20% of the global power mix. Ongoing developments in carbon capture and storage (CCS) technology aims to reduce the environmental impact of natural gas, aligning it more closely with global sustainability goals. However, advancements in energy storage and grid integration will further enhance the viability of renewable energy, reducing the dependency on fossil fuels.
Comparative Analysis and Implications
The forecasted growth rates for wind and solar energy are significantly higher than those from all other sources, including natural gas. This demonstrates a clear shift towards renewable energy sources, driven by global efforts to reduce carbon emissions and combat climate change. However, the continued reliance on gas highlights the need for a balanced and diversified energy portfolio.
Wind and solar energy are expected to be approaching parity in terms of generation by 2030, together contributing almost 8,500 TWh to the global energy mix, about 25%. The balance between the two leading renewable sources is crucial for ensuring a stable and resilient energy supply. Moreover, the advancements in energy storage and grid integration will further enhance the viability of renewables, reducing the dependency on fossil fuels.
The steady growth of gas energy production suggests that it will continue to play a supportive role in the transition to a low-carbon economy. The development of cleaner gas technologies and the integration of renewable energy sources into the grid will be essential in achieving this balance.
The forecast for global electricity production from 2024 to 2030 highlights a robust growth trajectory for renewable energy sources, particularly wind and solar. This shift is driven by global efforts to reduce carbon emissions, promote sustainability, and harness cleaner energy alternatives. Wind and solar energy are set to become dominant forces in the global energy landscape, while gas will continue to provide the necessary stability and reliability during the transition period.