2025-04-10

Energy Transition: from fossil fuels to a renewable future

The world is breaking free from the constraints of fossil fuels and embracing a cleaner, more sustainable energy future. The transition to renewable energy is not just a response to climate change—it’s a fundamental shift that is reshaping global economies, industries, and the environment.

The Decline of Fossil Fuels

For centuries, fossil fuels have powered industries and economies. However, their environmental and economic drawbacks have become increasingly apparent. The heavy reliance on coal, oil, and natural gas has led to pollution, resource depletion, and energy security concerns.

The Slowdown of Coal

Coal was the backbone of the Industrial Revolution, but its dominance is fading due to environmental pressures and dwindling reserves. The number of operational coal mines is shrinking, and coal combustion remains a major source of air pollution.

• In 2024, global coal production reached 7.8 billion tons, but with a growth rate of just 0.8%—the lowest in a decade.
• In the UK, coal’s share in energy consumption fell to 4% in 2024, down from 18% a decade ago.

The Oil Market’s Struggles

The once-booming oil industry is also facing headwinds. Demand growth has slowed, refineries are struggling with overcapacity, and geopolitical instability causes price volatility.

• In 2024, global daily oil consumption was approximately 99.8 million barrels, with a year-on-year growth of just 0.5%—well below the average of the past decade.
• The Middle East holds about 48% of the world’s proven oil reserves, leaving many countries heavily dependent on imports.

Natural Gas: A Cleaner but Costly Alternative

Natural gas is often considered a cleaner fossil fuel, but it comes with logistical challenges. Transporting and storing gas requires costly infrastructure, limiting its accessibility.

• In 2024, global natural gas production was 4.2 trillion cubic meters, with a modest growth rate of 2.1%.
• The cost of building and maintaining extensive pipeline networks remains a barrier to wider adoption.

The Rise of Renewable Energy

In contrast, renewable energy has experienced rapid expansion, offering a cleaner and more sustainable alternative. From solar and wind to biomass, renewables are transforming the global energy landscape.

Solar Power’s Breakthrough

Technological advancements have made solar power more efficient and affordable, bringing it to the forefront of the energy transition.

• In 2024, global new solar PV installations reached 205 GW, an 18% increase from the previous year. China alone accounted for 87 GW, or 42% of the global total.
• The cost of solar PV has dropped by 82% over the past decade, making it cost-competitive with traditional energy sources.

Wind Power’s Growing Impact

Wind energy is now a major pillar of electricity supply in many countries, especially with advancements in offshore wind technology.

• In Denmark, wind power accounted for 62% of total electricity generation in 2024, significantly reducing the country’s carbon footprint.
• Offshore wind farms are unlocking new opportunities, transforming vast oceans into renewable energy hubs.

The Role of Biomass Energy

Biomass is playing a key role in diversifying the renewable energy mix, particularly in agricultural economies.

• In 2024, global biomass power generation capacity reached 165 GW, a 6.5% increase from the previous year.
• In Brazil, bioms energy, particularly biofuel ethanol, accounts for 18% of the country’s energy mix, reducing reliance on oil.

Challenges on the Road to a Renewable Future

Grid Integration and Storage Issues

Renewable energy sources like wind and solar are intermittent, creating challenges for energy grids.

• In 2024, wind curtailment rates in some Chinese provinces remained as high as 12%, leading to wasted energy.
• Energy storage technology is essential for stability, but current battery costs remain high.

Social and Economic Adjustments

The shift to renewables requires changes in workforce skills and public perception.

• About 40% of coal workers will need retraining for new roles in the renewable sector.
• Around 35% of the public has concerns about renewable energy projects, citing issues like visual impact and noise pollution.
  

The energy transition is a defining challenge of our time. Moving away from fossil fuels and embracing renewables requires innovation, policy support, and global cooperation. While the journey is complex, the benefits—cleaner air, energy security, and a sustainable future—make it a necessary and rewarding path forward.