World close to peak emissions in the power sector

Analysis by Ember reveals that the world is close to a turning point where power sector emissions stop increasing and start declining.

Hannah Broadbent

Director of Communications & Strategy

Ember

Dave Jones

Head of Data Insights

Ember

8 December 2023 | 4 min read

The power sector is currently the single largest source of emissions globally and it needs to be the first sector to decarbonise ahead of an economy-wide net zero. Reaching peak emissions is the first crucial turning point to begin a new era of declining emissions.

At COP28, countries are negotiating the ‘decision text’ of the global stocktake–a key outcome from COP which will set out what all countries agree should happen going forward. The draft text contains an option for countries to agree that the world needs an economy-wide peak of emissions before 2025, and the current draft leaves room for wording around a phase-out of fossil fuels (or a ‘phasedown’ of ‘unabated’ fossil fuels – see Carbon Brief). 

The latest evidence from the power sector shows that here, the peak is imminent and perhaps already here, giving governments confidence that setting a target to peak emissions overall within the next couple of years is eminently feasible.

A new era of falling power sector emissions is very close

The world is close to a turning point where the rapid growth of wind and solar pushes the world into a new era of falling fossil generation, and therefore falling power sector emissions. This will happen when clean power is increasing fast enough to meet rising electricity demand, so displacing fossil fuels. 

The world is getting very close. In our Global Electricity Review 2023, we showed that in 2022 the growth in wind and solar generation (+557 TWh) met 80% of global electricity demand growth (+694 TWh). This has already helped to significantly slow the growth in power emissions: without wind and solar power, fossil fuel generation would have been 20% higher than it was in 2022.

We forecasted that with average growth in electricity demand and clean power, 2023 would see a small fall in fossil generation (-47 TWh, -0.3%), with bigger falls in subsequent years as wind and solar grow further. That would have meant 2022 being the year of peak emissions. However, issues with hydro this year so far are now making that look unlikely.

Poor hydro conditions blocking fossil decline in 2023 so far

Despite hopes for a decline in fossil fuel emissions in the power sector this year, adverse hydro conditions prevented emissions from falling in the first half of 2023, according to Ember’s mid-year analysis. 

Global power sector emissions plateaued in the first half of 2023 as wind and solar continued to grow. Power sector emissions would have fallen by 2.9% had global hydro generation been at the same level as last year.

Nonetheless, it is clear from the latest global data on electricity generation that the world is nearing the point of falling power sector emissions. The rapid pace of growth in solar and wind–with a 71% increase in capacity expected this year–is closing the gap on rising electricity demand. Already in the first half of 2023, growth in solar and wind met all of the increase in demand. However, avoiding an increase in fossil fuels will require a return to normal for hydro, and for nuclear generation to stay steady. 

Global power sector emissions are likely to peak this year. If not this year, there’s a small chance that they would need to wait until 2024, but an equally small chance that 2023 data comes in lower-than-expected and actually emissions already peaked in 2022. 

The global peak is close, and the unstoppable progression of wind and solar has already pushed many countries past the peak and into a decline of fossil power.

Half of the world is past a peak in fossil power

According to analysis by Ember, 107 of 215 economies passed peak fossil generation at least five years ago, setting the stage for a global peak and subsequent decline in power sector emissions.

In these 107 countries, power sector emissions have fallen by almost 20% in the last decade. Together, they represent 38% of global electricity demand. Major economies like the US, EU and Japan are already beyond peak emissions. Economies at least one year past a peak in fossil power, according to the latest year of available data, represent 50% of electricity demand.

Tipping the world into a global peak of power sector emissions will require a few more countries to pass this point. Most notably, major economies China and India have an outsized impact on the global trend. 

China is already very close to a tipping point. India will take more time but solar and wind are already helping to slow emissions growth. India’s latest electricity plan, analysed by Ember, shows a historic turnaround ahead. Solar and wind are expected to meet two-thirds of India’s power generation growth by FY 2032. This stands in contrast to the past decade when coal-fired generation met 83% of electricity demand growth.

Not just peaking: Tripling global renewables and doubling efficiency would unlock large falls in fossil fuels

Reaching ‘peak’ fossil emissions in the power sector is a crucial milestone in the global transition to a clean, electrified economy. But the most critical part is what happens next. To achieve the rapid declines in emissions required this decade, there needs to be a rapid acceleration in the deployment of wind and solar power. 

As we recently showed, tripling renewables and doubling efficiency will deliver 85% of the cuts in unabated fossil fuels required by 2030. By 2035, renewables and efficiency will alone more than halve total CO2 emissions. This will on its own eat into fossil fuel demand, and will also allow many more countries to enact fossil fuel phase-out policies.

It’s clear from this pathway the tiny role that ‘abated’ fossil fuels–i.e. fossil with CCS–will play. It delivers just 6% of the reduction in unabated fossil fuels by 2035. It’s important to remember this point if COP28 sees an agreement to phase out unabated fossil fuels: this means deep and rapid cuts in fossil fuels and just a small increase in fossil with CCS. As recent research shows, CCS is expensive and cannot deliver the scale of cuts in fossil emissions that can be achieved with renewables and efficiency.

According to the IEA Net Zero pathway, the power sector would see a 76% fall in unabated fossil fuel use by 2035, even as it increases in size as electrification picks up. And the rest of the energy sector dramatically shrinks, partly because of efficiency and partly because of electrification. Renewable electricity doesn’t just decarbonise the power sector, it decarbonises the global energy sector.

At COP28 so far, over 120 countries signed a pledge to secure a global tripling of renewables capacity, and this has been proposed for inclusion in the final decision text. Ember’s analysis showed that governments are already planning for a doubling of global renewable capacity, and maintaining historic growth rates would put the world on track for a tripling. 

Achieving a tripling of global renewables capacity this decade would be the single biggest action to cut emissions. It will require wide-ranging and rapid changes in policy, infrastructure and financing, particularly for emerging economies like India and Southeast Asia.

A global commitment to triple renewables and double efficiency would help bend the curve on policy ambition, so that fossil fuel use not only peaks but also starts to see deep and rapid cuts. A commitment to a fossil fuel phase-out would send an even clearer signal that investment needs to be urgently diverted from fossil fuels to renewables. Together these would accelerate actions that would move the world closer to peaking emissions prior to 2025, and pave the way for subsequent declines in fossil fuel emissions.

Supporting Material

Acknowledgements

Cover image

Credit: cbpix / Alamy Stock Photo

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