As the global energy landscape continues to evolve, the divide between developed and developing nations remains stark, especially in how energy is consumed and accessed. The Energy Institute’s latest Statistical Review of World Energy offers a snapshot of this shifting reality, prompting critical reflection on how countries with growing populations and economies such as India, Indonesia and nations across sub-Saharan Africa can meet surging energy demands without repeating the fossil-fuel-heavy paths of the past.

In this piece, I consider the trends behind the data and explore how the developing world might leapfrog into a cleaner, more sustainable energy future.

As we all know, there’s a big disparity between OECD and non-OECD in energy consumption per capita. Countries with fast-growing populations and economies will consume more energy than today as they grow and develop. How can they achieve that?

Take the case of India, now the most populous country in the world. How it manages to satisfy its energy demand is increasingly crucial. Its coal consumption went up 4% last year. Three-quarters of electricity generation is coal in India. Because of coal and no CO₂ tax, and in some cases because of government subsidy, the average electricity price in India is 7 p/kWh, compared to the US’ 18 p/kWh (low because of cheap shale gas) and 30 p/kWh in Western Europe, a price set by imported gas prices, CO₂ levies and infrastructure.

The affordability of modern solutions and the cost of the build-out of the grid to accommodate mass renewable deployment is a big concern. I think there is a challenge of how we can make and create an affordable solution for places like India to grow green energy. That said, the Statistical Review shows India is growing its solar capacity fast, doubling in three years and now 7% of total electricity generation.

Another interesting question is how flexible is the energy delivery system; is energy secure? We know that oil is a globally traded commodity. LNG does that for gas, and it will become much more important going forward, especially after the war in Ukraine. It has proven energy security, because it can be sourced in many parts of the world. Shell’s 2040 outlook on LNG last year predicted that demand would grow 50% to 2040; now it predicts 60%. I think gas is going to have a pretty long future in the energy mix. Should we be afraid of that? I don’t think so. It emits half the CO₂ of coal in power generation. If we use it to wean countries off coal, it’s net positive.

On the other hand, taking gas, liquefying it and transporting it as LNG has a minimum price of $8–10/mn Btu. We have all got to get used to higher future gas prices in Europe, and therefore higher future electricity prices. It is quite an expensive resource to set the electricity price in the developing world. So, the challenge is, what can they afford and how good is the infrastructure?

For example, take the sub-Saharan west African country of Nigeria. When I visited Nigeria working as upstream director of Shell, there was a real shortage of electricity generation capacity for the whole country of nearly 200 million people. The country has a relatively weak grid, poor infrastructure and little central power generation. When you drive through the Niger Delta towns at night, they are dark. An energy-rich country in darkness, because of the lack of investment to take an indigenous gas resource and develop infrastructure to turn it into something for the people. Infrastructure is crucial for the developing world.

In contrast, China is leading the world’s energy transition drive. Around 57% of new global renewable capacity installed during 2024 was in China. Not only is China supplying 80% of the world’s solar panels and batteries, it is also world’s biggest deployer of renewables. China is dragging the world into the renewable energy future. That said, it produced 31.5% of the world’s greenhouse gas (GHG) emissions last year. That figure increased again, and hasn’t peaked yet. Coal-fired power was still 58% of electricity generation, but that is down from 70% a decade ago. China is the most electrified major economy and its electricity generation increased 6.4% last year – that addition alone is equivalent to twice the UK electricity system. However, only 10% of the increase was met by coal and an encouraging 40% by solar, 20% by hydro and 16% by wind.

Oil consumption might have peaked there also. If that turns out to be true, it would demonstrate the effect of EV penetration; 50% of new cars sold in China are now EVs. Perhaps oil will peak in 2029, but if so, only because EV penetration is picking up. Through batteries and EVs, China has created an opportunity that now allows the world to start to wean itself off oil.

In summary, renewable energy is growing extraordinarily fast, but not fast enough to drive a transition – it’s still in addition (more oil, gas, coal and renewables power). Integration of renewable energy into grids, and into affordable energy provision for customers, is still proving difficult. We’re making progress, but we need to accelerate our early steps on what will be a long journey. There is still so much work to be done to create an energy system that is affordable, sustainable and provides secure energy for the world’s population.

• Further reading: ‘A tale of two countries: India achieves record rooftop solar capacity while Pakistan struggles to attract energy investments’. India’s rooftop solar market reached a record 3.2 GW of new capacity in 2024, driven primarily by residential installations, according Mercom India Research. In contrast, neighbouring Pakistan faces significant challenges in enticing investments for its energy sector, even from long-standing ally China, reports the Institute for Energy Economics and Financial Analysis.
• Find out how China plans to accelerate offshore wind and green trade measures as it strives to peak carbon emissions before 2030 and achieve carbon neutrality by 2060.