Renewables vs. Coal: Will Clean Energy Emerge Triumphant?

Written By: Michael Kraten, PhD, CPA - https://www.linkedin.com/in/michaelkraten/

Did you know that coal remains the #1 fuel source of global electricity generation? Even though our economy has been transitioning towards clean renewable sources for many years, King Coal remains dominant.

Furthermore, the past few years have featured a dispiriting increase in global coal consumption. Excluding the unique pandemic year of 2020, “coal consumption in 2021 rose above 2019 levels, taking it very close to its all-time high and significantly contributing to the largest ever annual increase in global energy-related carbon dioxide (CO2) emissions in absolute terms.” These trends have continued into 2022; as a result, even the United Kingdom has decided to open a new coal mine for the first time in three decades.

If we are still increasing our coal consumption, and if we are continuing to rely on coal for electricity generation more than on any other natural resource, how can we possibly hope to reduce global carbon emissions? Fortunately, the International Energy Agency (IEA) delivered some good news about these concerns last week.

Namely, the IEA predicted that renewable energy sources will finally replace coal as the world’s leading source of electrical power by the year 2025. Its prediction was released in last week’s publication of Renewables 2022, a voluminous 159 page report that presents a five year forecast of energy trends.

And why is the IEA a credible predictor of future trends? In response to the 1970s energy crisis, the agency was established by the OECD to coordinate energy reserves, respond to supply disruptions, and produce economic data. It now serves 31 member and 11 associated nations, a group that is responsible for three quarters of the world’s energy consumption.

If you are worried about our ability to wean away from coal, the IEA’s report should provide you with some comfort. After all, despite some significant short-term concerns, we may cross a historic threshold of electricity generation in just three years.