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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
The old BP annual review of global energy statistics may have moved to a new home at the Energy Institute, but the central message from this year’s EI Statistical Review of World Energy is of a second year of energy and emissions growth during 2022, despite strong progress with new renewables.
The news from BP a year ago was that energy demand and emissions had bounced back to around pre-pandemic levels during 2021, reversing the temporary reduction in 2020 resulting from the COVID-19 pandemic.
Last year was a tumultuous one for the energy industry, with the pandemic demand crisis giving way to the Ukraine conflict, which caused major disruption to both energy supplies and prices – that energy markets struggled to respond to.
Five key themes from the latest Review are that:
- Global primary energy consumption grew by around 1% in 2022, taking it to nearly 3% above the 2019 pre-COVID level. Within this, gas fell by 3% and renewables (excluding hydro) increased by 13%. However, the dominance of fossil fuels was largely unchanged at almost 82% of total consumption.
- Global energy-related emissions continued to rise, up by 0.8%, despite strong growth in renewables.
- The strong pace of deployment of renewables in the power sector continued, driven by solar and wind. 2022 saw the largest ever increase in wind and solar newbuild capacity. Together they reached a record 12% share of power generation. Renewables (excluding hydro) met 84% of net electricity demand growth in 2022.
- The Ukraine conflict and curtailment of Russian supplies to Europe precipitated record international gas prices in Europe (a threefold increase) and Asia (twofold), and unprecedented shifts in global oil and gas trade flows.
- Post-COVID, transport fuel demand patterns continued to return, but with major variations across geographies and fuel types. China was a major outlier, in particular in terms of jet fuel remaining significantly below its pre-COVID level, due to its ‘zero COVID’ policy.
The Energy Institute (EI) and partners KPMG and Kearney released the 72nd annual edition of the Statistical Review of World Energy, presenting full global energy data for 2022, on 26 June. Oil major BP produced the previous 71 issues.
EI President Juliet Davenport OBE HonFEI said: ‘2022 saw some of the worst ever impacts of climate change – the devastating floods affecting millions in Pakistan, the record heat events across Europe and North America – yet we have to look hard for positive news on the energy transition in this new data. Despite further strong growth in wind and solar in the power sector, overall global energy-related greenhouse gas emissions increased again. We are still heading in the opposite direction to that required by the Paris Agreement.’
Simon Virley CB FEI, Vice Chair and Head of Energy and Natural Resources, KPMG in the UK, went further: ‘Despite record growth in renewables, the share of world energy still coming from fossil fuels remains stubbornly stuck at 82%, which should act as a clarion call for governments to inject more urgency into the energy transition.’
- Primary energy demand growth slowed in 2022, increasing by 1.1%, compared to 5.5% in 2021, and taking it to around 3% above the 2019 pre-COVID level.
- Consumption increased in all regions apart from Europe (–3.8%) and CIS (–5.8%).
- Renewables’ (excluding hydro) share of primary energy consumption reached 7.5%, an increase of nearly 1% over the previous year.
- Fossil fuel consumption as a percentage of primary energy remained steady at 82%.
- CO2 emissions from energy use, industrial processes, flaring and methane (in CO2 equivalent terms) continued to rise to a new high, growing by 0.8% in 2022 to 39.3 GtCO2e.
- In contrast, CO2 emissions from flaring decreased by 3.8% and emissions from methane and industrial processes decreased by 0.2%.
- Oil consumption continued to increase in 2022, rising by 2.9mn b/d to 97.3mn b/d, a smaller increase than was seen between 2020 and 2021. Consumption remained 0.7% below 2019 levels.
- Brent crude oil prices averaged $101/b, their highest level since 2013.
- Global oil production increased by 3.8mn b/d in 2022, with OPEC+ accounting for more than 60% of the increase.
- Natural gas prices reached record levels in Europe and Asia in 2022, rising nearly threefold in Europe and doubling in the Asian LNG spot market. US Henry Hub prices rose over 50% 2022 – their highest annual level since 2008.
- Global natural gas demand declined by 3% in 2022, dropping just below the 4tn cm mark achieved for the first time in 2021. Its share in primary energy in 2022 decreased slightly to 24% (from 25% in 2021).
- Global gas production remained relatively constant compared to 2021.
- LNG supply grew 5% (26bn cm) to 542bn cm in 2022, similar to 2021.
- Coal prices reached record levels in 2022, with prices in Europe and Japan climbing by 145% and 45% respectively.
- Coal consumption continued to increase, rising by 0.6% on 2021 to 161 EJ; the highest level of coal consumption since 2014.
- The growth in demand was largely driven by China (1%) and India (4%). Their combined growth of 1.7 EJ was sufficient to offset declines in other regions by 0.6 EJ. Coal consumption in both North America and Europe declined by 6.8% and 3.1% respectively.
- Global coal production increased by over 7% compared to 2021, reaching a record high of 175 EJ. China, India and Indonesia accounted for over 95% of the increase in global production.
Renewables, hydro and nuclear
- Renewable power (excluding hydro) rose by 14% in 2022 to reach 40.9 EJ. This was slightly below the previous year’s growth rate of 16%.
- Solar and wind capacity continued to grow rapidly in 2022, recording a record increase of 266 GW. Solar accounted for 72% (192 GW) of the capacity additions.
- The largest portion of solar and wind growth was in China, accounting for about 37% and 41% of global capacity additions respectively.
- Hydroelectricity generation increased by 1.1% in 2022 whilst output from nuclear fell by 4.4%.
- Global electricity generation increased by 2.3% in 2022, which was lower than the previous year’s growth rate of 6.2%.
- Wind and solar reached a record high of 12% share of power generation, with solar recording 25% and wind power 13.5% growth in output.
- Coal remained the dominant fuel for power generation in 2022, with a share around 35.4%, marginally down from 2021.
- Renewables (excluding hydro) met 84% of net electricity demand growth in 2022.