The Energy Institute (EI), in collaboration with KPMG and Kearney, has released the 73rd edition of the Statistical Review of World Energy, providing comprehensive global energy data for 2023. This year’s review highlights several pivotal trends and developments in the energy sector, reflecting the ongoing complexities and challenges in balancing energy demand with sustainability goals.
In 2023, global primary energy consumption reached an unprecedented high, rising 2% from the previous year to 620 Exajoules (EJ). Fossil fuels played a significant role in this surge, with consumption increasing by 1.5% to 505 EJ. Coal consumption rose by 1.6%, while oil demand increased by 2%, surpassing 100 million barrels per day for the first time. Despite natural gas consumption remaining flat, fossil fuels accounted for 81.5% of the total energy mix, a slight decrease from 82% in the previous year.
Renewable energy, particularly from wind and solar, continued its rapid ascent in 2023. Renewable electricity generation, excluding hydro, surged by 13% to a record 4,748 TWh. It was predominantly driven by wind and solar power, which accounted for 74% of the net additional electricity generated globally. Renewables (excluding hydro) now represent 8% of primary energy use, or 15% when including hydro.
These advancements highlight renewable energy’s potential to alter the energy landscape significantly. However, the transition remains uneven, with varying adoption rates and infrastructural developments across regions.
The ongoing conflict in Ukraine has further reshaped Europe’s energy dynamics. European gas demand fell by 7%, following a 13% decline the previous year. Russia’s share of EU gas imports plummeted to 15%, down from 45% in 2021, as LNG imports outpaced piped gas for the second consecutive year. The net trade of natural gas pipelines fell by around 8% (or 35 billion cubic meters). European pipeline imports fell by 26% (40 billion cubic meters), almost entirely due to reduced supplies from Russia, which accounted for 91% of the drop. These shifts signify a strategic rebalancing of Europe’s energy sources, emphasizing reduced dependence on Russian gas.
In advanced economies, there are clear signs that the reliance on fossil fuels may have peaked. Europe saw fossil fuels drop below 70% of primary energy consumption for the first time since the Industrial Revolution, driven by reduced demand and increased renewable energy use. In the United States, fossil fuels accounted for 80% of primary energy consumption.
These trends suggest a gradual but significant shift towards cleaner energy sources in developed regions, reflecting the effectiveness of policies promoting energy efficiency and renewable adoption.
Emerging economies, however, continue to grapple with rising fossil fuel consumption amid efforts to enhance renewable energy capacity. In India, fossil fuel consumption rose by 8%, representing almost all demand growth and reaching an 89% share of overall consumption. For the first time, India’s coal usage surpassed that of Europe and North America combined.
Africa’s primary energy consumption fell by 0.5% in 2023, with fossil fuels constituting 90% of total energy consumption. Renewables (excluding hydro) accounted for only 6% of electricity generation. Meanwhile, China experienced a 6% increase in fossil fuel use, yet the share of fossil fuels in its primary energy mix has been declining since 2011, reaching 81.6% in 2023. China also led global renewable energy additions, contributing 55% of new capacity. Additionally, China regained its position as the world’s largest LNG importing country, followed by Japan and South Korea, accounting for around 45% of global LNG trade.
From the record levels recorded in 2022, coal prices fell 46% on average, with European delivered prices settling around $130/tonne and delivered prices in Asia averaging around $125/tonne. Global coal production reached its highest-ever level at 179 EJ, surpassing the previous high set the year before. The Asia Pacific region accounted for nearly 80% of global output, with activity concentrated in Australia, China, India, and Indonesia.
Global coal consumption continued to increase, breaching 164 EJ for the first time. The increase of 1.6% over 2022 was seven times higher than the previous ten-year average growth rate. China remains the largest consumer of coal, accounting for 56% of the world’s total consumption. In 2023, India’s coal consumption exceeded the combined consumption of Europe and North America for the first time.
Global electricity generation increased by 2.5% in 2023, reaching 29,925 TWh. While electricity demand in the Asia Pacific and the Middle East increased by around 5%, demand in Europe and North America fell by 2.4% and 1%, respectively. Coal remained the dominant fuel for power generation, accounting for around 35% of the total. Natural gas held a 23% share, and oil-fired plants contributed just over 2%.
Renewables’ share of total power generation rose from 29% to 30%. Southern & Central America recorded the highest contribution from renewables at 72%, with Brazil seeing significant increases in wind and solar power. The share of nuclear power remained flat at around 9%, with new builds in China and the return to service of plants in France and Japan offset by the closure of Germany’s remaining plants. In 2023, the grid-scale battery electricity storage system (BESS) capacity stood at 55.7 GW, with nearly 50% installed in China.
Solar and wind capacity continued to grow rapidly in 2023, surpassing the previous year’s record of 276 GW with an addition of around 186 GW, a 67% increase. Solar accounted for 75% (346 GW) of the capacity additions, with China responsible for around a quarter of the growth. Europe installed just over 56 GW of solar, representing 16% of total solar capacity additions. Wind also had a record year, with over 115 GW coming online, nearly 66% of capacity additions in China. Although Europe has the highest share of offshore wind in its portfolio (12%), China leads with 37 GW compared to Europe’s 32 GW.
Global biofuel production grew by over 8% in 2023, significantly increasing in the US and Brazil. Indonesia contributed substantially to the Asia Pacific region’s production. The production split in 2023 was 54% biogasoline and 46% biodiesel, with the US, Brazil, and Europe responsible for around three-quarters of global biofuel consumption.
Prices for key metals and materials fell by around 26% in 2023. The biggest declines were in cobalt (-47%), pet needle coke (-36%), and lithium carbonate (-32%). Africa accounted for nearly 75% of the world’s cobalt production, with the Democratic Republic of Congo producing 56% of the global total.
While significant progress has been made in renewable energy generation, the continued dominance of fossil fuels and rising emissions highlight the formidable challenges ahead.
