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Providing coverage of Alaska and northern Canada's oil and gas industry
July 2025

Vol. 30, No.27 Week of July 06, 2025

A year of much change

Different energy approaches across the world for increased energy usage in 2024

Alan Bailey

for Petroleum News

An underlying message from the Energy Institute's Statistical Review of World Energy for 2024 is that, while the year saw a significant surge in global energy demand, the manner in which energy was supplied to meet that demand varied greatly across different parts of the world. Both renewable energy production and fossil fuel production increased to meet the energy demand level.

During a June 16 presentation on the statistical review Dr. Nick Wayth, CEO of the Energy Institute, said the world is moving through a period of immense energy transformation, but not in a linear or coordinated way. The transition to renewable energy sources is progressing "but it is doing so with sharp contrasts across regions, technologies and fuels," he said.

The Statistical Review had been produced for many years by BP but was taken over by the Energy Institute in 2022. The Energy Institute is a chartered professional membership body with a mission to facilitate a transition to low emissions energy sources.

Record high energy demand

In 2024 global energy demand grew by 2%, reaching an all-time record high of 592 exajoules. But, while demand grew by 2.6% in countries outside the Organization for Economic Co-operation and Development, demand only grew by 0.5% in OECD countries, Wayth said.

Oil accounted for 34% of global energy demand and, thus, remained the dominant fuel worldwide. Oil demand rose by 0.6%, breaking through the demand level of 101 million barrels per day for the first time, Wayth said. However, the growth rate of oil demand has fallen sharply, he added.

Coal demand also hit a new record, but with 83% of that demand coming from the Asia-Pacific region, in particular from China and India. India and Indonesia saw significant production increases, while the rest of the world experienced declines, with the United States recording its lowest coal production in about 44 years. On the other hand, natural gas demand increased by 2.5%, with significant growth in demand in the Asia-Pacific region, in particular in China, and with something of a bounce back in demand in Europe, Wayth said.

In general, rather than falling last year, fossil fuel demand increased by a little over 1%, a rate of increase consistent with the average growth rate over the past decade, Wayth said. Essentially, the demand for fossil fuels has been shifting but not shrinking.

"Overall fossil fuels made up 86.6% of total energy, down about half a percentage point from last year," Wayth said, adding that a change in the Energy Institute's methodology had slightly impacted the figures.

At the same time there had been a "phenomenal growth" in the use of renewable energy sources last year, with a 16% increase in the use of wind and solar energy, Wayth said. This in turn led to a significant improvement in power generation energy efficiency, coupled with savings of about 10 gigatons in the emission of pollutants associated with generation. But production records were set for all forms of energy generation, including coal, oil natural gas, renewables, hydropower and nuclear power.

The global oil and natural gas markets

When it comes to the oil market, the United States reached an all time production high of more than 20 million barrels per day, a production rate that is close to equaling the combined outputs of Saudi Arabia and the Russian Federation. However, given declining volumes in oil reservoirs and a continuing focus on capital discipline by U.S. exploration and production companies, this production rate may turn out to be the high watermark for the United States, Wayth suggested. In addition, China has increased its oil production by more than 10% in the last five years, he said.

The United States, Russia, Iran and China together accounted for more than half of the global natural gas production last year. But European production dropped, primarily because of falls of production in Norway, the United Kingdom and the Netherlands. Overall global production of liquefied natural gas fell by just under 1%, with the Asia-Pacific region accounting for 69% of LNG imports and Europe accounting for 25% of imports. The U.S. remained the largest global exporter of LNG.

New record for renewable energy generation

In terms of renewable energy sources, 2024 saw a new record for total renewable energy generation, in particular with new records set for additions in the use of solar energy. Globally, solar energy generation grew by 28%, a growth level 2.5 times higher than the growth in wind energy, the next highest contributor to the renewable energy growth. Solar in itself added 50% more additional energy for electricity power grids than additions from coal and natural gas combined, Wayth said.

However, a sharp decline in the wind power growth rate in Europe to just 2%, compared with the annual growth rate of 8% in recent years, resulted from technical, regulatory and economic challenges, Wayth said. And, despite falls in the use of hydropower across the Americas, global hydropower production saw its largest annual increase since 2010, the year in which China's huge Three Gorges Dam project reached its full power generation capacity.

Integrating intermittent renewable energy sources like wind and solar into a power grid raises challenges over maintaining the stability of power supplies. That, in turn, drives a need for significant energy storage capacity. Globally, battery storage capacity more than doubled last year to a level of 126 gigawatts, thus rapidly catching up with pumped hydro, a long established storage technology. China was responsible for around two-thirds of the increase in storage capacity, followed by the United States with 20%. The United Kingdom accounted for about 5%, Wayth said.

Globally, nuclear power generation increased by nearly 3% in 2024, thus reaching a level amounting to 9% of total electricity generation. About two-thirds of this production increase came from France and Japan, countries that had been returning nuclear plants into service after they had been inoperative for an extended period of time. The current rate of increase in the global use of nuclear power falls short of the annual 4% target that had been set to address global warming concerns, Wayth said.

And given the amount of global fossil fuel usage, in 2024 emissions from energy use rose by 1%, to reach a record high of 41 gigatons of carbon dioxide equivalent. While China and India together accounted for 60% of the global emissions rise, emissions fell in the United States and continued to drop in Europe.

"So all of this points to an energy transition that is underway, but with very different starting points, and at very different paces across the globe," Wayth said. "This is not a clean handover from fossil fuels to renewables ... we are witnessing a highly disorderly shift rather than a coordinated global effort."

Worldwide trends

Wayth particularly focused on China, a country that he said seems to be shaping the future of energy. Last year the country added renewable energy generation capacity that amounted to more than 2.5 times the combined renewable generation of the United States, Europe and India. But, although last year China accounted globally for more than 60% of new solar and wind power additions and now has nearly half of globally installed capacity of both energy sources, the country also remains the world's largest emitter of greenhouse gases. In particular the country remains highly dependent on coal fueled power generation for 60% of its electrical power.

"It is the world's biggest driver of clean energy growth, but also its largest source of emissions," Wayth said.

Despite its rapid increase in the use of solar power, India is also a major consumer of coal for power generation, with coal consumption continuing to grow and the country now using more coal than Europe, North America, Central America and South America combined.

In the United States, on the other hand, the use of natural gas and renewables is squeezing the use of coal for power generation. Last year the use of wind power grew by 7% after falling in the previous year. Europe has also been seeing a fall in the use of coal coupled with an increase in the use of renewables.

In Africa the growth in energy use has lagged the rest of the world, with a lack of energy infrastructure and many people having minimal access to energy resources. Energy demand only increased by 1% in 2024, Wayth said. On the other hand, electricity generation in Africa grew in line with the average global rate of growth of 4%, with this growth being primarily driven by coal and gas fueled power generation.

Oil demand flattening

A key question in the energy industries revolves around the issue of when global oil demand will peak. Wayth said that it does now appear that oil demand is flattening or even falling, despite a small increase in demand in non-OECD countries. Oil demand in China fell by 1.2% last year, he said.

And there are clear signs of structural changes in the energy market, particularly with electricity becoming the fastest growing sector of the market.

Wayth said that over the past decade electricity generation has grown on average by 2.6% per annum. He said that the strong growth in demand has been driven by several factors, including record breaking temperatures across Asia, Europe and North America causing sharp increases in the need for cooling systems. Cloud computing and artificial intelligence are also driving up electricity demand. Electric vehicle sales have been increasing and there are shifts to electrical heating, cooking and mobility, particularly in China, India and Southeast Asia.

"At a global level, renewables are driving most of this growth," Wayth said, adding that now just over 40% of energy comes from low or zero carbon emission sources. So, around 60% of energy comes from fossil fuels.

In the European Union in 2024 70% of power generation came from low carbon sources. In the Middle East and parts of Africa, on the other hand, fossil fuels still dominate the energy markets, with renewables playing a very marginal role in energy growth. The United States sits somewhere between these extremes, with 41% of power now coming from low carbon sources, led by nuclear, hydro and growing solar. Last year there was a major increase in the use of natural gas in the U.S., offsetting coal usage. China has seen a huge growth in the use of solar energy. And more than 50% of power generation in the United Kingdom is now coming from renewable sources.

"To sum up, the world is using more energy than before," Wayth said. Electricity use is growing rapidly, increasingly generated by low or zero carbon emission sources, while the use of fossil fuels still dominates globally in absolute terms. China continues to lead the energy transition while also creating the highest level of emissions and continuing to increase its dependence on coal. The energy transition is real but disorderly, with stark differences between what is happening in different parts of the world, Wayth said.

A key question in the energy industries revolves around the issue of when global oil demand will peak. Wayth said that it does now appear that oil demand is flattening or even falling, despite a small increase in demand in non-OECD countries. Oil demand in China fell by 1.2% last year, he said.

And there are clear signs of structural changes in the energy market, particularly with electricity becoming the fastest growing sector of the market.

Wayth said that over the past decade electricity generation has grown on average by 2.6% per annum. He said that the strong growth in demand has been driven by several factors, including record breaking temperatures across Asia, Europe and North America causing sharp increases in the need for cooling systems. Cloud computing and artificial intelligence are also driving up electricity demand. Electric vehicle sales have been increasing and there are shifts to electrical heating, cooking and mobility, particularly in China, India and Southeast Asia.

"At a global level, renewables are driving most of this growth," Wayth said, adding that now just over 40% of energy comes from low or zero carbon emission sources. So, around 60% of energy comes from fossil fuels.

In the European Union in 2024 70% of power generation came from low carbon sources. In the Middle East and parts of Africa, on the other hand, fossil fuels still dominate the energy markets, with renewables playing a very marginal role in energy growth. The United States sits somewhere between these extremes, with 41% of power now coming from low carbon sources, led by nuclear, hydro and growing solar. Last year there was a major increase in the use of natural gas in the U.S., offsetting coal usage. China has seen a huge growth in the use of solar energy. And more than 50% of power generation in the United Kingdom is now coming from renewable sources.

"To sum up, the world is using more energy than before," Wayth said. Electricity use is growing rapidly, increasingly generated by low or zero carbon emission sources, while the use of fossil fuels still dominates globally in absolute terms. China continues to lead the energy transition while also creating the highest level of emissions and continuing to increase its dependence on coal. The energy transition is real but disorderly, with stark differences between what is happening in different parts of the world, Wayth said.






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