However, coal-fired power and emissions jumped to new highs in 2021 as the global economy regained its footing following the COVID-19 pandemic, says BNEF’s annual Power Transition Trends report.

Commenting on these key findings, Michael Bloomberg, UN Secretary General’s Special Envoy for Climate Ambition and Solutions, and Founder of Bloomberg LP and Bloomberg Philanthropies, says: ‘New spikes in coal generation are a troubling sign for the economy, our health and the fight against climate change. This report should be a rallying cry to leaders around the world that the transition to clean energy requires bigger and bolder actions, including actions that empower nations that have contributed the least to climate change – but bear many of its worst consequences – to make progress tackling it.’

With nearly 3,000 TWh of electricity produced in 2021, wind and solar accounted for a combined 10.5% (wind 6.8%, solar 3.7%) of global generation. A decade ago, these two technologies combined accounted for well under 1% of total electricity production. In all, 39% of all power produced globally in 2021 was carbon free, according to the study, with hydro and nuclear projects meeting just over 25% of the world’s electricity needs.

Every year since 2017, wind and solar have accounted for the majority of new power-generating capacity added to global grids. In 2021, they hit a record three-quarters of the 364 GW of new capacity built. Including hydro, nuclear and others, zero carbon power accounted for 85% of all new capacity added.

‘Renewables are now the default choice for most countries looking to add or even replace power-generating capacity,’ says Luiza Demôro, Head of Energy Transitions at BloombergNEF. ‘This is no longer due to mandates or subsidies, but simply because these technologies are more often the most cost-competitive.’

Solar continued to expand at a particularly fierce pace in 2021, both in terms of new capacity additions and new markets. Solar was half of all global capacity added, at 182 GW. Its contribution to global grids topped 1,000 TWh for the first time. Solar has also become essentially ubiquitous, reports BNEF. In nearly half of all countries it tracked, where some capacity was added, solar was the top choice in terms of volume. At least 112 countries now have at least 1 MW of solar capacity installed, according to the report.

However, despite the incredible inroads renewables have made, the report paints a stark picture of the enormous work that remains for the power system to address its role in climate change. As the global economy recovers from the COVID-19 pandemic, electricity demand has surged 5.6% year-on-year, putting new strains on existing infrastructure and fossil fuel supply chains.

Lower-than-expected production from hydro plants and higher natural gas prices also helped put coal-fired power back in the spotlight in more markets. Production from coal plants set records by jumping 8.5% from 2020–2021 (up 750 TWh on a net basis), to 9,600 TWh, according to the study. Over 85% of that generation came from 10 countries, with China, India and the US alone accounting for 72%.

Meanwhile, countries continued to complete construction of new coal plants in 2021, and coal still accounts for the single largest share of global capacity at 27%, according to BNEF. There is one small bright spot, however – the speed at which new coal is being added to the grid is reported to be slowing. Just 13 GW of new coal-fired capacity was completed in 2021, down from 31 GW in 2020 and 83 GW in 2012.

Nonetheless, the result was a commensurate 7% spike in global CO₂ emissions from the power sector in 2021 compared to 2020.