Global Energy Transition: Solar, Wind, and EVs Driving 60% Growth Towards a Cleaner Future – Report

The global energy transition is speeding up, with renewable energy sources such as solar, wind, and batteries becoming more affordable and accessible at an unprecedented rate. In 2023, solar installations surged by 60%, reaching 360 gigawatt-hours (GWac), while electric vehicles (EVs) made up 23% of new passenger car sales, a massive increase from just 3% four years ago. This rapid growth has led to a shift in investments, with annual spending on renewable energy infrastructure surpassing oil and gas investments for the first time.

The world is entering a phase of transformational change in energy systems, driven by three key tasks: expanding solar, wind, and battery storage capacity, electrifying industries and sectors that rely on fossil fuels, and addressing residual emissions from hard-to-decarbonize sectors such as heavy industry and aviation.

Solar, wind, and EVs are advancing faster than expected, and the transition to clean energy is no longer a distant goal but an ongoing reality. However, to limit global warming to 1.6 degrees Celsius, this transformation must accelerate. According to Rystad Energy’s latest research, achieving the 1.6-degree scenario requires a steep increase in technology adoption. Without faster technological advancements, the global energy system could settle into a 1.9-degree scenario. A 2.2-degree scenario would involve a significant slowdown in cleantech deployment and reduced urgency for decarbonization.

Renewable energy currently accounts for over one-third of global electricity production, and by 2050, solar and wind power must grow to supply 44% of the world’s energy to meet the 1.6-degree target. In the 1.9-degree scenario, this share would be 25%. As solar and wind power become more affordable, they are now outcompeting fossil fuels without subsidies. The solar module supply chain alone is expected to reach 1.65 terawatts direct current (TWdc) by the end of 2024, a 63% increase from the previous year. This capacity growth will drive further economic advantages and reduce the cost of clean energy.

For the global energy system to meet the goals of the Paris Agreement, decarbonization must occur across all sectors. This includes increasing the share of renewables in electricity generation, transitioning industries like transportation and buildings to electricity, and addressing residual emissions from hard-to-decarbonize sectors. The power sector alone contributed 39% of global carbon dioxide emissions in 2023, making it a primary focus for clean energy expansion.

Electrification plays a critical role in decarbonization, with industries such as transportation and buildings relying heavily on fossil fuels. Maximizing the electrification of these sectors could achieve 43% of the required emissions reductions for the 1.6-degree scenario.

The final challenge is addressing residual emissions that cannot be eliminated through electrification. This requires the development of emerging technologies such as carbon capture, utilization, and storage (CCUS), hydrogen-based fuels, and biofuels. However, these technologies are still in their early stages, and more progress is needed to reduce risks and increase investment in these areas.

Despite these challenges, several strategies could help achieve more ambitious climate targets. Reducing methane emissions, which are highly potent greenhouse gases, is one such strategy. Additionally, land use improvements, such as co-locating solar installations with agriculture, can help meet energy demand while minimizing land use. The transition to a cleaner, more efficient energy system is possible, but it will require continued technological innovation, faster adoption of renewable energy, and strong policy support to reach global climate goals.