Renewable Gains Offset Coal’s Decline In 2016

Coal consumption fell in 2016, and renewables picked up the slack. But global energy consumption continues to be dominated by fossil fuels.

Last month BP released its Statistical Review of World Energy 2017. Overall world primary energy consumption hit a new record, increasing by 171 million metric tons of oil equivalent (MTOE) from 2015 to 2016. The largest share of that increase came from new oil consumption, which accounted for 77 MTOE of the increase. Natural gas took the second biggest share with 57 MTOE of new consumption.

Interestingly, coal consumption declined by 53 MTOE, but modern renewables like wind and solar power increased by 53 MTOE. So one could accurately argue that the increase in the consumption of modern renewables like wind and solar power exactly offset the decline in coal consumption. That seems to be the first time that has ever happened.

The balance of the energy consumption increase was made up of increases in nuclear power (+9 MTOE) and hydropower (+27 MTOE).

Over the past decade, global primary energy consumption has increased by 17%, but the energy mix is slowly shifting. For overall energy consumption in 2016, fossil fuels continued to maintain a dominant share. Oil led all sources with a third of global energy consumption.

Primary energy consumption by source.
Primary energy consumption by source.

Coal still had the second largest share with 28% of global consumption, but natural gas at 24% is closing the gap on coal. In 2016, fossil fuels made up 85% of global energy consumption. Nuclear contributed 5%, while renewables like wind, solar, geothermal, and biomass contributed 3%. Along with hydropower, renewables made up 10% of primary energy consumption.

For reference, in 2010 the renewable share was 1.3%, and fossil fuels were at 86.9%. So global energy systems are shifting, albeit it slowly because of the large share held by fossil fuels. Renewables will likely keep growing at exponential rates for the foreseeable future, and even then it is going to take some time to capture significant market share from fossil fuels.

8 thoughts on “Renewable Gains Offset Coal’s Decline In 2016”

  1. Won’t coal use start rising again, albeit slowly, when most of Africa starts ramping up its energy generation? It seems likely to be a combination of coal and nat gas. It is hard to get a sense of how permanent the growth of renewables will be because of how heavily subsidized they are. In any case, you can’t run a high energy consumption civilization from low energy density sources.

  2. All in all good trend lines. Steam turbine coal power is inefficient and the highest polluter. Natural gas is the cleanest fossil fuel and hot air turbines are very efficient. Renewable energy is growing at high rates.

    U.S. energy is doing fine. Trump has stated more nuclear energy will be pushed into production. He has not changed the course of renewable energy. I read EIA report on ethanol that’s interesting. They expect gasoline type fuels use to start decreasing in ’20. Note that gasoline consumption was 129b gallons in ’00 and still 129b gallons in ’16. Why? We did use more fuel, but ethanol blending made up the difference. EIA projects ’30 gasoline use will decrease by -28b gallons or a 22% decrease. They expect E15 will become the new normal fuel. Also, a new fuel is being developed to meet the needs of engineering for high efficiency and low polluting engines. This will be a blended product and alcohol will play a big role.

  3. Good points. I would add that there are limits to the addition of unreliable power (solar & wind) to the grid before technology and economic constraints cause consumers to rebel.

  4. Good article on how shale gas has confounded its critics:

    “Shale Gas Revolution” is still a teenager. However, the volume of operational and financial evidence demonstrating that natural gas shales “work” is overwhelming at this point. This evidence leaves no doubt, in my view, that North America is well supplied with low-cost natural gas (NYSEARCA:UNG) for at least a decade, and possibly much longer. Given that natural gas shortages were a clear and present danger as recently as 2008, this is a true paradigm shift for the continent’s energy security (and, arguably, the world’s energy security).

    During the new technology’s early years, shale skepticism was understandable. However, at this point, “peak gas” and “gas shales do not work” claims have largely moved into the category of conspiracy theories.

    As they say, the proof of the pudding is in the eating. Two macro metrics – volumetric growth and market price – speak loudly in support of shale gas having a low cost of supply. Geologic assessments of resources in the ground indicate that this low cost of supply is likely to be sustained over a long period of time.

  5. ” So one could accurately argue that the increase in the consumption of modern renewables like wind and solar power exactly offset the decline in coal consumption.”

    Is there a MTOE cost comparison of those two sources to see what the cost of the renewables like wind and solar is, compared to coal extraction costs ?

    If so, what is that parameter called, so I can look it up ?

  6. RBM’s comment made me think of comparison of coal extraction cost vs wind extraction cost. But that cost comparison is a meaningless comparison. Wind extraction costs produce power directly. Coal must suffer material handling and storage costs. Same with coals wastes including environmental risks and environmental costs. Coal, also, suffers low conversion efficiency to convert coal btu to Kwhs.

    However, coal is dispatchable power and coal itself is low cost easily stored energy. That makes coal extremely attractive to utilities. So, both wind and coal have attractive attributes and both work or can be made to work together. That’s the ticket. Maximize the value of both. Same with nuclear, hydro, solar, and natural gas.

    I don’t believe the talk of pundits that claim one source of energy should power the country. The equation has many variables and geographically dependant. Utilities must engineer the assets given to maximize value to customers including environmental concerns. We don’t want to pull the plug on best in class nuclear or coal. Better to obsolete old power plants on intelligent time frame. We need to be vigilant and push regulators to this wisdom and thwart activist attempts to hamstring nuclear or hydro per some stupid onerous reg that achieves little other than stop investments. We need to be smart and practical and adjust to conditions on the ground. Also, never be vulnerable to foreign power. Maximize domestic power and do so with maximum versatility and flexibility. That’s the role government should play. To maximize the market choice and open competition.

  7. There are three advantages of the fracking revolution: more oil, more security and lots of jobs for American workers.

    But the oil production of first year wells in the Permian have been dropping in the last year, and American workers are averaging less pay despite technical improvements.

    Fracking is obviously not going to last as long as earlier oil plays. Any thoughts on the near future? Personally, I see renewables picking up more of the slack. I’m concerned that fracking may be fine at the moment but that it could slip very quickly because of costs.

  8. “Fracking” (by which you mean shale oil and gas development) has been way more resilient to low prices than Robert or many other critics thought.

    And it has grown faster and stayed longer than many of them thought (the whole burn itself out hypothesis). Yes, individual wells decline. Yes, there are sweet spots. Yes, yes. But still, there are a lot of locations to drill to replace decline. It’s a big resource. Especially on the gas side. Especially in the App.

    Of course low prices impact shale development. But really what you need to acknowledge is that shale CAUSED the low prices. First for regional gas markets, than for LNG spot markets, than for regional and global LNG prices, than for global oil prices. It is essentially a large marginal resource.

    Sure, if SA decides to pump 15 MM bpd, Texas frackers will suck wind. But similarly if SA decides to pump 5 MM bpd, frackers will fill the gap. When the market saw US oil production adding 1 MM bpd year after year and accelerating, it basically had a cow and crashed the price. Now OPEC is essentially incapable of driving prices above $60 per bbl. That is a huge win from fracking.

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