Renewables and Natural Gas Surge Ahead of Oil and Coal in 2024
Published · 5 min read
In 2024, the world’s energy demand grew at an unexpected rate of 2.2%, almost double the average growth rate of the past decade. The International Energy Agency (IEA) reported that the rise in energy demand was largely driven by a sharp increase in global electricity consumption. The increase in energy demand was led by emerging economies like China and India, which accounted for more than 80% of the global growth. Even advanced economies, like those in Europe and the U.S., saw a return to energy demand growth after several years of stagnation.
The Rise of Electricity Consumption
Electricity demand surged in 2024, with global consumption increasing by 4.3%, which was almost double the average yearly increase of the past decade. This significant rise was mainly due to three factors:
- Extreme Weather Events: Record temperatures, especially in regions like the U.S., China, and India, drove up the demand for cooling, such as air conditioning.
- Electrification of Transport: More electric vehicles (EVs) were sold, further increasing electricity demand as people shifted from gasoline-powered cars to electric ones.
- Growth in Industry and Data Centers: The demand for electricity also grew due to expanding industries, data centers, and the increasing use of artificial intelligence (AI).
This rapid rise in electricity use shows how dependent the world has become on electricity. It highlights the need for reliable and sustainable energy sources to meet rising demand. The increase in global electricity consumption in 2024 was the result of these combined factors.
The Role of Renewables and Natural Gas
Renewable energy sources and natural gas were the main contributors to meeting the rising energy demand in 2024. The IEA reported that renewable energy capacity saw a massive increase of 700 gigawatts (GW) globally, setting a new record for the 22nd consecutive year. The vast majority of this new capacity came from solar and wind energy. This growth in renewables was crucial to meeting the rising demand for clean electricity.
Renewable Energy Leads the Charge
Solar and wind energy played a leading role in the growth of global electricity supply. Together, these two sources contributed nearly 80% of the rise in global electricity generation. Solar power alone added around 480 TWh, and wind power contributed about 180 TWh.
In particular, China continued to be the dominant player in the renewable energy space. The country added 340 GW of solar and 80 GW of wind in 2024, which accounted for two-thirds of global renewable capacity additions. India also made impressive strides, adding 30 GW of solar, a threefold increase from the previous year.
Renewable energy’s role in global electricity generation can be seen in the table below:
| Energy Source | Global Increase in 2024 (TWh) | Percentage of Total Global Electricity Growth |
| Solar | 480 TWh | 40% |
| Wind | 180 TWh | 15% |
| Hydropower | 190 TWh | 15% |
| Nuclear | 40 TWh | 10% |
As shown, solar energy led the way, making up 40% of the overall increase in global electricity generation in 2024.
Natural Gas in High Demand
In addition to renewables, natural gas also played a significant role in meeting the surge in electricity demand. Global natural gas demand rose by 2.7%, reaching an all-time high of 115 billion cubic meters (bcm) in 2024. This was largely due to the demand for electricity during heatwaves and increased use of liquefied natural gas (LNG) trucks.
Asia, particularly China, was the main driver of this growth. China’s natural gas demand rose by more than 7% in the first half of the year. However, the IEA noted that by the end of 2024, China’s natural gas demand slowed due to rising LNG prices, which curbed the country’s appetite for the fuel.
Fossil Fuels Struggle to Keep Up
Despite the growth in natural gas demand, fossil fuels like oil and coal are seeing slower growth compared to renewables. While global coal demand increased slightly by 1% in 2024, much of this increase was driven by extreme heat in China and India. These two countries were responsible for over 90% of the global rise in coal demand, with China remaining the world’s largest coal consumer.
Oil’s Demand Growth Slows
Oil demand, on the other hand, grew at a much slower pace, rising by just 0.8% in 2024. This was due in large part to the ongoing transition toward electric vehicles (EVs), which significantly reduced the need for oil in transportation. EV sales surged by more than 25% in 2024, with electric cars now accounting for one in five cars sold globally.
The slower growth in oil demand signals a long-term shift away from fossil fuels, as more people adopt cleaner forms of energy and transportation. For the first time in decades, oil’s share of total energy demand fell below 30%, marking a historic milestone in the global transition to cleaner energy.
The Impact of Extreme Heat and Climate Change
The extreme heat experienced globally in 2024 had a direct impact on energy consumption patterns. Heatwaves in the U.S., China, and India pushed up the demand for electricity, especially for air conditioning. This surge in electricity demand often resulted in increased use of fossil fuels, such as coal and natural gas, leading to higher carbon emissions.
This created a vicious cycle: warmer weather led to higher energy demand for cooling, which, in turn, led to increased use of fossil fuels, thus worsening the climate crisis. The IEA estimated that without the extreme weather in 2024, global carbon emissions could have been much lower.
Emissions and the Path Forward
Despite the challenges posed by extreme weather, there is some positive news. The global economy is increasingly decoupling economic growth from emissions growth. In advanced economies, emissions fell by 1.1% in 2024, even as their economies grew threefold over the past few decades. This trend suggests that it is possible for economies to grow without contributing to rising emissions, thanks to the adoption of renewable energy technologies and energy-efficient systems.
However, much work remains to meet global climate goals. The United Nations estimates that to keep global warming below 1.5°C, global carbon emissions must fall by 43% by 2030. This means that countries must accelerate their transition to clean energy and reduce their reliance on fossil fuels.
