Earlier this week, the Guardian supplied a fairly balanced (if brief) review of the 2024 version of what was until recently known as the BP annual energy review. I have provided the link, so anyone interested can read the whole article. For now, suffice it to say that the headline pretty neatly sums up the review’s findings: “Fossil fuel use reaches global record despite clean energy growth – Report finds developing countries are increasing reliance on coal, gas and oil as overall demand for energy rises.”

Paul Homewood also provided a brief analysis, well worth a read if you want a quick take of the main points. Reuters offered up significant detail, and I particularly commend it for a comprehensive summary of the report, which since last year has been provided by the Energy Institute, together with consultancies KPMG and Kearney. The report itself can be downloaded from here. The foreword sets out the 2023 highlights fairly succinctly in a couple of paragraphs. First:

In this second Statistical Review under the Institute’s custodianship, we report on another year of highs in our energy hungry world. Record consumption of fossil fuels and record emissions from energy, but also record generation from renewables, driven by increasingly competitive wind and solar energy.

As we shall see, the bigging-up of renewables is a bit of a stretch. The reality of a world where developed and developing countries see things very differently, and consequently act very differently, is very much to the fore:

The progress of the transition is slow, but the big picture masks diverse energy stories playing out across different geographies.

As we shall see, that’s a rather euphemistic way of telling us that the developing world is very keen on fossil fuels in order to develop, while the developed world is determined to rid itself of fossil fuels, but is struggling to do so. After some key highlights and a regional overview, the report proceeds with a discussion of primary energy and carbon, then separately of carbon, before looking at each fuel type in turn.

Key Highlights

Rather dramatically, 2023 was a year of production and consumption records across the board. Demand for gas remained flat, but oil consumption rebounded strongly, largely thanks to China’s ending of covid lockdowns (which just goes to show the extent to which China dominates – or should dominate – all questions of international energy use, climate change etc). Consumption of crude oil broke through the 100 million barrels per day level for the first time ever and coal demand beat the previous year’s record level.

Consumption of renewable energy grew at six times the rate of total primary energy, and electricity demand grew 25% faster than total primary energy consumption. If you’re a fan of renewables and of the need to decarbonise, that sounds great, until it’s put in context. Renewable energy is so insignificant globally, that despite such an impressive-sounding level of growth, a modest 2% increase in primary energy consumption (over 2022 levels) meant that fossil fuel usage actually grew, and its use as a percentage of global primary energy dropped only 0.4% to 81.5%. Consequently, renewables’ share of primary energy consumption increased by only 0.4%. At this rate, global net zero will take hundreds of years to achieve – forget 2050.

As for “carbon” emissions, greenhouse gas emissions from energy use, industrial processes, flaring and methane (in carbon dioxide equivalent terms) increased 2.1% to exceed the record level set in 2022. For the first time ever, energy-related emissions exceeded the 40 GtCO2e level, with emissions from the direct use of energy breaching 35 GtCO2e for the first time ever. Those COPs are really doing a great job.

As for oil, global production increased by 1.8 million b/d to reach a record level of 96 million b/d in 2023. The US remained the largest producer seeing its output grow by over 8%. So much for Biden. In 2022 the combined consumption of oil and biofuel products exceeded 100 million barrels per day for the first time ever. In 2023, consumption of oil products alone exceeded this level.

Consumption of oil in north America increased by around 0.8%, but (which should surprise nobody except those anti-west campaigners who are always keen to give China a free pass) in China demand for gasoline and diesel rebounded to 15% above 2019 levels. For the first time ever, China’s refining capacity exceeded that of the US. Meanwhile demand for oil in the Asia Pacific region as a whole increased year on year by 5% while in Europe it fell by 1%.

Global gas production remained relatively constant, but demand for LNG increased, mostly (yet again) driven by the Asia Pacific region, with China leading the way and India also playing a significant part. Indeed, China regained its position as the world’s largest importer of LNG, followed by Japan and South Korea. Between them, those three countries accounted for around 45% of global LNG trade.

Global coal production, which had seen a record year in 2022, increased to its highest level ever. The Asia Pacific region accounted for nearly 80% of global output with activity concentrated in just four countries, Australia, China, India, and Indonesia. Global coal consumption continued to increase and breached 164 EJ for the first time ever. The increase of 1.6% over 2022 was seven times higher than the previous ten-year average growth rate. While a ten-year decline in coal consumption in Europe and north America continued, China is by far the largest consumer of coal (it beat its own record set in 2022 and now accounts for 56% of the world’s total consumption). Significantly, in 2023 India exceeded the combined consumption of Europe and North America for the first time ever.

Increasing demand for electricity is also being driven by the Asia Pacific region and the Middle East, where it increased by around 5%, compared to falls of 2.4% in Europe and of 1% in north America. Fossil fuels remain dominant globally as sources of electricity, with both coal and natural gas retaining a fairly constant share of production, at 35% and 23% respectively. Globally, renewables share of total power generation rose from 29% to 30%, though it has to be said that growth of renewables in central and south America is substantial (Brazil in particular seeing substantial increases). Nuclear remained static at 9%, with increases in China being offset by plant closures in Germany.

Wind and solar increased rapidly, but a word of caution is needed. Large percentage increases from a small base still represent fairly modest volumes, as is evident from the tiny dent renewables have made in 2023 regarding total proportions of energy supply. Solar is now growing faster than wind, and China is responsible for a quarter of the growth. Almost 2/3 of wind capacity growth was also in China, and its total installed capacity is now equal to North America and Europe combined (though Europe has the highest share of offshore wind in its portfolio, at 12%).

A snippet regarding key minerals – Africa was responsible for nearly 75% of the world’s cobalt production. Within this, the Democratic Republic of Congo was responsible for around 96% (or 56% of the global total). Or so the report says – those numbers don’t seem to add up.

Regional Overview

Global primary energy consumption reached a new record for the second consecutive year with non-OECD countries dominating both the share and annual growth rates. Fossil fuels continue to underpin their development accounting for 84% of their energy mix. This is a very telling paragraph:

The contrasts between the northern and southern hemispheres is quite stark. Consumption of primary energy in the Global South first exceeded that of the Global North in 2014. In 2023 it accounted for 56% of total energy consumed and grew at twice the global average rate of 2%. The Asia Pacific region was responsible for 85% of the Global South’s demand (and 47% of global demand) where the economies of China, India, Indonesia, Japan and South Korea dominated. Whilst Southern & Central America, and Asia Pacific experienced growth rates above the global average, total demand in Africa dropped by 0.4% in 2023 and electricity consumption remained flat. Electricity demand in both North America and Europe experienced falls of -1% and -2% respectively. In these regions, electricity demand in particular is increasingly impacted by energy efficiency regulations, energy-efficient lighting, and changing consumer habits.

Yes, you read that correctly, demand for electricity in Africa actually dropped, despite a rapidly rising population on that continent. Unlike the situation in the developed world, this is unlikely to have anything to do with energy efficiency regulations and changing consumer habits, and more to do with poverty. The report tells us that it is estimated that 750 million people (roughly 10% of the world’s population) do not have access to electricity to light their homes, refrigerate their food, or keep cool in rising temperatures and around 2.6 billion people (around one third of the world’s population) rely on heavily polluting biomass fuels such as charcoal, coal, and animal waste for heating and cooking. Meanwhile the Asia Pacific region is responsible for above average per capita greenhouse gas emissions, primarily due to China, the world’s largest consumer of coal and second largest consumer of oil.

The take on regional energy security is interesting too. After all those COPs, we learn that the total international trade of oil, gas and coal was 53% higher in 2023 than it was in 2000. 78% of the world’s total energy was consumed last year in north America, Europe and the Asia Pacific region. In the past decade north America has gone from being a net importer of energy to a net exporter, whereas since the 1980s Europe has consistently been a net importer. 2023 saw Europe’s biggest deficit, which might cast doubt on its “green energy transition” if politicians were taking any notice. Oil production in Europe in 2023 met only 23% of demand. For gas the figure was 44% and for coal 58%. Yet again the Asia Pacific region is arguably the biggest issue, with by far the greatest energy demands of any region in 2023 (at 47% of the world’s total). It has also been a net importer since the 1980s, though in 2023 it had a 5% surplus in coal. I suspect this surplus is largely down to Australian production.

Primary energy and “carbon”

Some stark statistics are on display here, and they do make one wonder yet again what is the point of all those COPs. No doubt COP enthusiasts will say that things would be so much worse without them, but in the absence of a counterfactual world, we will never know if they are right.

Not only was 2023 the second consecutive year to set a record for global primary energy consumption, its annual growth rate of 2% was 0.6% above its ten-year average. That might argue for an accelerating trend, but it might not be a trend that continues, as it may have been given a one-off fillip by the end of covid lockdowns, especially in China. In absolute terms, 2023 set a new record for the consumption of fossil fuels; their share of an increased total declined by a humble 0.4% from 81.9% to 81.5%. Demand for gas was flat, with demand for more “carbon intensive” oil and coal growing, with the result that energy-related greenhouse gas emissions also reached a record, high, exceeding 40 gigatonnes of CO2 equivalent for the first time ever. CO2 emissions from the combustion of fossil fuels is by far the largest source of energy-related greenhouse gas emissions, contributing around 87% of the total.

I bang on a lot about China, I think with good reason. Another telling statistic is that even though China’s per capita CO2 emissions were already roughly 50% ahead of those of the UK at the start of 2023, over the course of the year per capita energy consumption in the UK declined by 0.1%, while in China it increased by 6.6% (and by 6.4% in India). Over the year, CO2 emissions from energy declined in total in the UK by 4.1% so that by the end of the year they represented only 0.9% of global emissions. Compare and contrast: in China they increased by 6.1% and in India by 8.4% (with China’s share of the global total increasing to 31.9% – or 32.1% if Hong Kong is included – and India’s share increasing to 8%).

Oil

Here we see another record set – the highest level of oil production the world has ever seen was achieved in 2023, reaching just over 96 million barrels a day. The US remains the world’s largest producer of oil, and its output increased by more than 8%. So much for those climate alarmist fossil fuel denigrators who demonised Trump and sanctified Biden. Consumption of oil also achieved the highest level ever seen, at over 100 million barrels per day (presumably thereby eroding reserves). Oil production in north America increased over the year by 6.7%, an acceleration over the ten-year trend of growth of 4.8% per annum. The figures for south and central America are even more dramatic – a declining trend of 0.1% per annum over the last ten years turned into a single year increase in production of 11.2%. Europe turned a decline of 0.6% per annum averaged over ten years, into a production increase of 0.3% (probably as a reaction to turning away from Russian oil: a 2.2% decline in output over the year was recorded for the Commonwealth of Independent States, broadly the co-operating parts of the former Soviet Union). The Middle East saw production decline by 1.6%, which contrasts with an average growth of 0.8% over the last ten years. Perhaps this was the result of reduced production by OPEC in an attempt to shore up the price of oil. African production of oil increased by 2.3%, reversing an average decline of 1.7% over the last ten years. Globally an average increase in production of 1.1% per annum over a ten year horizon accelerated into an increase of 2% over the year.

Consumption of oil increased all over the world, except in Europe, which saw a decline of 0.6%. China, by contrast (yet again) saw an increase in oil consumption of 10.7% (the separate figure for Hong Kong was an increase of 25.1%). China was the single biggest importer of oil globally, with 27% of the total. Europe had the second highest share at 21%, followed by the US at 15%. Collectively, China and India increased their imports of Russian crude oil by 53% whilst Europe reduced its imports by 72%.

Natural Gas

Demand for natural gas remained stable in 2023, though that disguises regional differences. For instance, demand in Europe fell by 7%, down to its lowest level since 1994. Gas production in Europe also declined by 7% over the year. By contrast, yet again, demand in the Asia Pacific region grew by 2%, driven by 7% growth increases in both China and India. The USA is now the world’s largest exporter of LNG, and China is its largest importer, with the Asia Pacific region responsible for 64% of all LNG imports.

Coal

Here too we see another record, with 2023 witnessing the highest ever level of global coal production, breaking the existing record, which was set in 2022. The increase of 1.6% over the year was seven times higher than the ten-year average growth rate. China alone was responsible for just over half of global coal production and, as we have already seen, it is also far and away the largest consumer of coal (at 56% of the world’s total). For the first time ever India consumed more coal than Europe and north America combined (levels of consumption in Europe and north America fell to their lowest levels since 1965). China is the largest importer of coal, and India is the second largest coal importer, and the Asia Pacific region as a whole being responsible for 82% of global imports of coal. Indonesia, Australia and Russia are together responsible for 70% of coal exports.

Nuclear Energy

Total installed capacity fell slightly, but electricity generation from nuclear plant increased by 2% over the course of 2023. However, that was still 2% below its peak output, which was achieved in 2006. The recovery of France’s nuclear fleet aver prolonged outages in 2022 was offset by closure of German nuclear facilities. China, as with all sources of energy, leads the way in building new nuclear capacity – since 2000 it has built around 60% of all new nuclear capacity additions. Use of nuclear power has collapsed in Japan and Germany since Fukushima – down from 25% to 8% in Japan, and down from 23% to 2% in Germany.

Electricity and Renewables

Global electricity generation increased by 2.5% in 2023, to reach a new record level. Demand in the Middle East and the Asia Pacific regions increased by 5%, but fell in Europe by 2.4% and by 1% in north America. Renewables’ share of global power generation increased from 29% to 30%. As we have seen, renewables make the greatest proportionate contribution to power generation in central and south America. In 2023 global battery electricity storage system capacity stood at 56 GW. You won’t be surprised to learn that almost 50% of that was in China. With nuclear remaining flat at 9% of electricity generation, fossil fuels continued to do the heavy lifting, at 60%.

Key Minerals

Surprisingly perhaps, production of copper declined in 2023 by 1.6&, which contrasts with an average growth rate of 2% per annum over the previous ten years. Production of other critical minerals continued to grow at 4% per annum. The Asia Pacific region produced nearly 70% of the metals and materials critical to the manufacture of Li-ion batteries. Within this, China was both the world’s leading producer of refined cobalt and the world’s leading consumer of it, with nearly 87% of consumption used by the lithium-ion battery industry. As well as producing nearly 20% of the world’s lithium production, China also produced around 74% of its graphite supply. Europe’s largest reserves of lithium are in Portugal.

Conclusions

I think the conclusions can be expressed very simply. Energy demand continues to grow globally, fuelled by China (and to an increasing extent, India). The same can be said of demand for fossil fuels, which continues to set new records. Renewables, after all these years, all those subsidies, are still nowhere near doing the heavy lifting, and are doing little more than peck at the proportion of global energy they supply. Almost 30 years of COPs appear to have achieved very little, if anything. Finally, why do we in the UK bother?