Despite more than $2 trillion in spending on renewables over the past three decades, there is scant evidence that an energy transition is underway
We are in the middle of what some analysts are calling the "biggest global energy crisis in history." However, despite the fact that this crisis threatens to ruin the European economy, put tens of millions of people in energy poverty, and cause widespread food shortages, one phrase keeps coming up: "energy transition." NGOs, politicians, and the media all use this phrase all the time. Friends of the Earth Europe says on its website that the world needs to quickly stop using fossil fuels. The energy transition is part of this picture. We need a new, fair, and 100% renewable energy system."
The Inflation Reduction Act, a $700 billion spending bill that President Biden signed into law in August, was opposed early on because it would "speed up the country's energy transition too quickly," according to an article written by three Washington Post reporters. In July, the Sierra Club, the largest environmental group in the United States, said, "The right way forward is to double down on the clean energy transition."
But there is a problem: even though more than $2 trillion has been spent on renewable energy over the past 30 years, there isn't much evidence that a change is happening in the way energy is used. According to the BP Statistical Review of World Energy, the growth of oil, natural gas, and coal far outpaced the growth of wind and solar energy in both the US and the rest of the world last year.
Renewable energy can't take the place of hydrocarbons because it doesn't have enough money. Statista says that the US spent about $577 billion on renewables between 2004 and 2019. At the same time, the rest of the world spent another $1.5 trillion on renewables during the same time period. But the numbers from BP show that despite all this spending, wind and solar are not making a big dent in our insatiable need for oil, gas, and coal. There are many reasons for this, such as the huge amount of energy used around the world and the limited amount of neodymium, steel, aluminum, copper, and many other materials that the gigaton will need to move away from hydrocarbons on a large scale.
Before I go on, I'll admit that greenhouse gas emissions from energy are going down in some parts of the world. For example, emissions have been going down in the US and in many countries in Europe. These drops are caused by a number of things, such as moving heavy industry overseas, using more renewable energy, natural gas replacing coal in the power sector, and making better use of energy. But the hard truth is, as I explain in my most recent book, A Question of Power, more than three billion people on the planet still don't have enough money to buy energy. Also, both the amount of energy that comes from hydrocarbons and the amount of pollution that comes from using that energy keep going up quickly in Asia and Africa. The average African uses less than 15 gigajoules of energy per year, according to the last BP Statistical Review of World Energy. The average American uses 18 times more than the average European, and the average European uses eight times more than the average American.
Also, the electric sector isn't getting less carbon, it's getting more. Coal is in high demand around the world. For several months in a row, the Newcastle benchmark price for thermal coal going to the Asian market has been at or near $400 per ton. That's eight times as many as there were at the beginning of 2020. European power companies are rushing to buy as much coal as they can to replace the natural gas they get from Russia. The International Energy Agency said in July that the amount of coal used around the world this year will be the most ever.
Now, let's look at the numbers. First, let's look at what's going on in the US. New data from BP's Statistical Review show that in 2021, the US used 2.8 exajoules more oil (EJ). An exajoule is about the same amount of energy as one quadrillion British thermal units (Btu) or one trillion cubic feet of natural gas. To compare, the use of solar energy grew by 0.3 EJ and the use of wind energy grew by 0.4 EJ, for a total increase of 0.7 EJ. So, in the US, oil use grew four times faster than wind and solar combined last year. In the meantime, coal use went up by 1.4 exajoules, which is twice as much as wind and solar. Even though the US used less natural gas last year, the numbers from BP show that the country used 4 EJ more hydrocarbons. This is more than five times the growth seen in wind and solar.
The data from all over the world show a trend that is almost the same. Last year, the amount of oil, gas, and coal used went up by 10.5, 7.7, and 8.7 EJ, respectively. This made a total increase of 26.9 EJ in the amount of hydrocarbons used in one year. In 2021, wind and solar power each grew by 3.4 EJ and 2.1 EJ, for a total of 5.5 EJ. So, by 2021, the world's use of hydrocarbons grew almost five times faster than the growth of wind and solar power combined.
Here's another way to look at these numbers: Last year, the increase in the world's use of hydrocarbons, which I mentioned above added up to 26.9 EJ, was about the same as the output of all wind and solar projects on Earth. Last year, the world got 17.5 EJ of energy from wind and 9.7 EJ from solar, for a total of 27.2 EJ. If you think that last year was an exception, you're wrong. Dates from the middle of the 1980s show the same trends. Between 1985 and 2021, the world's use of hydrocarbons increased by 224 EJ. This is more than eight times as much as the increase in wind and solar power, which, as I said above, now contribute about 27.2 EJ to the world's energy mix.
Want to hear something good? Last year, there were some good things happening in the nuclear industry, at least on a global scale. The output of nuclear energy in the US is down by about 1.5 percent, which is a bad sign. Nuclear grew by 0.9 EJ around the world, and China was responsible for almost half of that growth.
To be clear, I'm not saying that the mix of energy sources on a global scale will never change. What I'm trying to say is that, as the author and polymath Vaclav Smil wrote in 2014, "energy transitions are inherently long-term events." "The ongoing shift away from fossil fuels will be no different," he said.
In fact, the BP numbers make it clear that wind and solar energy are not taking the place of hydrocarbons. Instead, we are adding them to the energy mix we already have. Why don't they move forward more? It's easy to see why: wind and sun can't provide the huge amount of energy the world needs at prices that people can afford. Also, big wind and solar projects are getting turned down all over the world. I have recorded in the Renewable Rejection Database that since 2015, more than 370 communities across the US have rejected or limited wind projects. And more than 90 have turned down projects to use solar power. About 40 townships in Ohio have banned the building of wind and solar projects just in the last year.
If policymakers are worried about climate change and greenhouse gas emissions, the next step is clear: we need to put more and more money into developing, regulating, and using nuclear energy so that it can help slow the growth of global emissions. And in the last few months, the nuclear industry has made a lot of progress. In July, the Nuclear Regulatory Commission (NRC) approved NuScale Power's small modular reactor design. This means that NuScale Power can now build its small modular reactor (SMR). So far, the NRC has only given SMR certification to this one company. In Europe, Poland, Romania, and Britain are among the countries that have said they will build SMRs. Another good sign is that in August, Dow, a big chemical company, said it would build an SMR at one of its US Gulf Coast petrochemical plants. The company works with X-energy, which is making an SMR with an output of 80 megawatts. Also, in the past few weeks, California lawmakers voted to extend the life of the 2,250-megawatt Diablo Canyon nuclear plant, and Ontario Power Generation changed its mind and said it would extend the lives of the reactors at the 3,100-megawatt Pickering Nuclear Generating Station, which is about 45 kilometers east of Toronto.
The Biden administration is also speaking out more and more in favor of nuclear energy. Energy Secretary Jennifer Granholm said last month that the US is committed to getting back to being "a leader in nuclear energy, non-proliferation, and climate action."
Again, this is great news. But I'll end with another quote from Smil, a well-known professor at the University of Manitoba who has written more than 40 books on energy and other topics and has often warned about how hard it is to stop using hydrocarbons. In 2016, he wrote, "There is no evidence that the global primary energy transition has been speeding up over the past few decades." He went on to say, "Even the fastest possible adoption of non-carbon energies will not be enough to stop burning fossil fuels by the middle of the 21st century."
The same things are still true as they were six years ago. A lot of people are talking about the energy transition. But the numbers from BP show that, so far, the energy transition is still more hype than reality.