24-03-2025
IEA Global Review Details A Sputtering Energy Transition
Fatih Birol, executive director of the International Energy Agency (IEA), at the World Economic ... More Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 21, 2025. The annual Davos gathering of political leaders, top executives and celebrities runs from January 20 to 24. Photographer: Stefan Wermuth/Bloomberg
Everyone engaged in business or policy activities related to the aspirational energy transition recognizes the reality that no such transition is possible without the full buy-in by the world's two most populous nations, China and India. It's a stark reality that just isn't happening, which means the transition desired by western governments and global organizations like the United Nations and World Economic Forum isn't happening, either.
Intentionally or not, this stubborn reality is highlighted by the Global Energy Review 2025 released Monday by the International Energy Agency (IEA). The report's key findings highlight the fact that 2024 was a year for record growth in the solar power sector, which accounted for 38% of total energy supply growth globally. Less highlighted, though is the fact that global demand for every form of fossil fuel - oil, natural gas, and coal - also rose to new record highs in 2024.
The main driver of the rising demand for all fossil fuels was, to no one's surprise, China, followed by India. This is especially true with coal, of which China alone consumes more than every other nation combined. As if to highlight its own role as a rising user of coal, India's Ministry of Coal put out a post on X celebrating its having reached the milestone of 1 billion tonnes of coal production on Sunday, 24 hours ahead of the IEA's publishing of its annual report.
Celebratory announcement by India's Ministry of Coal honoring historic milestone of 1 billion tonnes ... More of coal production, March 23, 2025.
'India has crossed a monumental 1 BILLION TONNES of coal production! With cutting-edge technologies and efficient methods, we've not only increased production but also ensured sustainable and responsible mining,' G. Kishan Reddy, India's Union Minister For Coal and Mines, said in the post. 'This achievement will fuel our increasing power demands, drive economic growth, and ensure a brighter future for every Indian. Under the visionary leadership of Hon'ble PM Shri Narendra Modi, India is on its path to becoming a global energy leader.'
That is assuredly true, but no one should think India is also on its path to becoming a global leader in this energy transition, a planned endeavor in which governments allocate trillions of dollars annually to subsidies for alternative forms of energy in an effort to eliminate the very fuels - coal, oil, and natural gas - which are driving the robust growth and modernization of India's economy. Yes, both India and China are rapidly growing their own renewable energy sectors, but both are seeing even more rapid growth in fossil fuel usage at the same time. Despite these realities, China maintains it will somehow achieve net-zero emissions by 2060, while India clings to the less ambitious target of reaching that goal by 2070.
The real trends seen in those two countries are in fact global trends, as shown in the IEA chart below. While renewables like solar and wind did account for a robust 38% of global energy demand growth in 2024, fossil fuels accounted for 54%, with nuclear filling the remaining 8% of increase for the year.
Chart by IEA illustrating Global Growth Rates and Share by Energy Source for 2024
Thus, despite trillions of dollars in global subsidies for renewables having been allocated by governments in this century, these alternative sources still fail to account for even half the rate of increase in energy demand. Just one more bit of evidence that we are not in the midst of an energy transition, but a period of energy addition and innovation instead.
One unsurprising result of this continuing reality is that global CO2 emissions rose again in 2024 at essentially the same pace they've risen since around 1950, as seen in the chart below.
IEA Global Change in CO2 Emissions Chart - Global Energy Review 2025
While some had predicted that the sudden drop in CO2 emissions during 2020 caused by the global response to the COVID-19 pandemic would result in a slowing if this trend, that has not been the case. Instead, thanks to a rapid recovery in the global economy, the rate of emissions growth simply resumed its previous path starting in 2022.
Predictably, as seen in this IEA chart, China and, to a lesser extent, India are the primary drivers of this ongoing emissions increase. By contrast, the United States, the European Union, and Japan have continued to steadily cut their emissions in this century via various strategies they've adopted.
IEA CO2 Emissions Per Capita and by Region, 2000 - 2024
As is always the case in these annual Global Energy Reviews, this one is filled with an almost bewildering wealth of data and analysis about the global energy situation. But no amount of verbiage and data can distract from the inescapable conclusion that this most ambitious of all of mankind's periodic energy transitions is shaping up exactly the way those prior transitions have turned out: Not as a transformative process in which a pre-existing form of energy is eliminated, but as an additive process in which new forms of energy are stacked atop the others to help satisfy inexorably rising energy demand.
As best-selling author Daniel Yergin points out in a recent piece about the transition in Foreign Affairs, a transition from using wood as a heating source for iron production began in England in 1708, when an iron worker noticed that coal was a far more efficient heating fuel for that purpose. The ambitious global move to transition from a coal-based economy to one based on oil in turn began around the turn of the 20th century. Yet, in 2024, the world still used record amounts of not only oil and coal, but also a record amount of wood for energy. Reality dictated that the identified alternatives to those pre-existing energy sources were not adequate to eliminate them in the face of rising energy demand.
It is increasingly apparent now that alternatives chosen by western and global governments - wind, solar, and electric vehicles - are not adequate in and of themselves to eliminate the various pre-existing forms of energy, and that in some instances - offshore wind is a prime example - governments have been subsidizing failure. If these alternatives were adequate, affordable, and scalable replacements, then India and China would find it easier to truly buy into the global effort while sustaining their economic growth.
Thus, it is also increasingly apparent that any successful effort to eliminate fossil fuels and truly achieve net-zero emissions in any year in the distant future will require a better, more scalable alternative to come into prominence. Many believe nuclear energy in the form of small modular reactors and potentially fusion technology will ultimately become that better alternative.
In the meantime, in the absence of a real energy transition, countries will have to make do with and strive to derive benefits from the energy addition and innovation that is actually taking place.
