Fossil Fuel Production Soaring Despite Data Showing Dropping Renewable Energy Costs

September 25, 2023 12:45:00

Although renewables are performing better than they ever have amid increasing demand and dropping prices, fossil fuel production is still soaring. Solar and wind energy cumulatively accounted for around 12% of global electricity generation in 2023, and experts predict renewable energy production from these sources will increase significantly over the decade.

Wind energy broke the threshold of a terawatt of energy generated this year, which is almost equal to the total capacity of installed wind energy in the United States while solar energy reached the threshold last year. The commercial solar sector installed 1.4 gigawatts of solar, the community solar segment installed a gigawatt’s worth of solar and an estimated 700,000 homeowners installed solar panels last year.

However, even though renewable-energy costs have fallen dramatically in recent years and the U.S. has installed more clean-energy capacity, fossil-fuel production doesn’t seem to be declining. In fact, data shows that fossil fuel use has risen sharply since 2010 with coal-fired energy generation increasing by 27% and natural gas going up by 37%.

The world may be making tangible steps toward achieving its greenhouse emission goals, but fossil fuels still remain a core ingredient in energy systems across the world. Fossil fuels such as coal and oil currently account for more than 60% of global electricity production and are responsible for more than 75% of greenhouse gas emissions and close to 90% of carbon dioxide gas emissions.

These fuels are essentially a double-edged sword for humanity, allowing us to generate tons of electricity because of their high-energy density but slowly choking the planet and inducing climate change in the meantime.

The majority of the world is incredibly reliant on fossil fuels for electricity generation, and it will most likely take several decades before solar, wind and other renewable sources replace fossil fuels as the primary fuel for power plants. Furthermore, most of the world’s roads, railways, oceans and airways are dominated by vehicles that rely on petrol and diesel. Electric vehicle adoption has seen a definite rise in recent months, but as with coal and oil in electricity generation, it will likely take quite some time to fully replace fossil-fuel vehicles with zero-emission electric alternatives.

Asia has been especially active in the coal-fired electricity segment in recent months, thanks to surging energy prices and dwindling supplies. For a large portion of 2022, China was permitting a record two new coal plants every week as it scrambled to shore up energy supplies for its 1.4 billion-strong population and a plethora of factories.

A 2021 analysis by financial thinktank Carbon Tracker found that India, China, Vietnam, Japan and Indonesia accounted for 80% of planned new coal plants at the time. This level of new coal project development shows that coal companies such as Arch Resources Inc. (NYSE: ARCH) may still have a role to play in enabling various countries to meet their energy demand as renewables establish themselves as reliable replacements for fossil fuel energy.

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