1. How Fast Is the Renewable Energy Transition?
Investment and Capacity Growth: Renewable energy is integrating into the global energy system at an unprecedented pace. According to the IEA, nearly $2 trillion is currently being invested annually in renewable energy projects, almost twice the total investment in new oil, gas, and coal supplies. In 2023, more than 560 GW of new renewable energy capacity was installed, and in 2024, global renewable energy installations are expected to exceed 680 GW, a year-on-year growth rate of over 20%. By 2030, new installations are expected to reach 940 GW.
China Leads the Charge: In 2023, China accounted for about 60% of global renewable energy capacity, making it the world’s largest renewable energy market. In 2024, China is expected to add over 310 GW of renewable energy capacity, representing 45.6% of the global total. However, China’s investment in renewable energy is projected to reach $850 billion, with investments in grids and storage growing by less than 10%. This mismatch with energy supply investments raises questions about how quickly and efficiently new capacity can be integrated into the evolving power system. This gap also presents significant opportunities for the growth of energy storage.
Trends in Developed Economies: The overall trend in developed economies presents mixed outcomes. For instance, Europe is expected to add more than 65 GW of solar capacity in 2024. However, energy consumption in the region is plateauing, and the growth rate is expected to slow. Specific sub-sectors, such as home storage and heat pumps, are experiencing a significant decline in sales and growth rates. The demand for grid-side storage is beginning to rise due to the need for flexibility in electricity grids, although the overall market remains relatively fixed. Meanwhile, the progress on emission reduction commitments related to COP28 is insufficient, and under the current policy environment, Europe’s emission reduction targets appear increasingly unachievable.
2. Global Electricity Demand Continues to Grow
Growth Rate and Drivers: As global electricity demand soars, a new energy system is emerging. According to IEA data, global electricity demand has grown at twice the rate of overall energy demand over the past decade. Notably, two-thirds of this new demand has come from China. Looking ahead, the pace of growth is expected to accelerate further, with global annual electricity demand increases equivalent to the total electricity consumption of Japan under existing policies. If the net-zero emissions targets of various countries are to be met, electricity demand growth will become even more pronounced. Under current policies, global electricity demand is expected to reach 2,200 TWh by 2035, driven by sectors like light industry, electric vehicles, refrigeration needs, data centers, and artificial intelligence (AI), all of which will be key areas for supporting energy storage development.
AI and Data Centers: As AI usage increases, the electricity consumption of related data centers is rising, causing significant local impact in some areas. However, AI’s broader potential impact on energy includes enhancing the coordination of electricity systems and shortening innovation cycles. There are over 11,000 data centers registered globally, often concentrated in certain regions, meaning their impact on local electricity markets can be substantial. Yet, by 2030, data centers will account for only a small portion of the overall electricity demand growth.
Other Contributing Factors: If the frequency and intensity of extreme weather events exceed predictions, or if new electrical devices, particularly air conditioners, need to meet higher performance standards, electricity demand forecasts could be disrupted. This deviation could have a larger impact on demand than data centers. With rising income levels and global temperatures, global cooling demand is expected to increase by over 1,200 TWh by 2035, exceeding the total electricity consumption of the Middle East.
3. Changes in Global Renewable Energy Trends from 2025 to 2030
Capacity and Carbon Neutrality: If production capacity is fully utilized, it would meet global carbon neutrality targets. Adequate clean energy manufacturing capacity is essential for accelerating the energy transition and achieving national and global net-zero goals, with China maintaining its leadership in the clean energy supply chain. Over the past five years, annual solar capacity installations have tripled to 425 GW, while manufacturing capacity has grown fivefold to over 1,100 GW. If this new capacity is deployed efficiently, it could nearly meet the renewable energy requirements for global carbon neutrality by 2050. Similarly, the production capacity of global lithium-ion batteries is experiencing similar growth.
Demand Growth in Emerging Economies: Energy demand in emerging and developing economies is growing rapidly. Continued tracking of energy transitions suggests that by 2030, the global economy will be able to grow without increasing oil, gas, or coal consumption. This marks a sharp contrast to past years: despite record-breaking clean energy installations, two-thirds of the global increase in energy demand in 2023 was met by fossil fuels, pushing CO2 emissions to new highs. Under current policies, the primary sources of energy demand growth will be India, Southeast Asia, the Middle East, and Africa, driven by urbanization. However, with the rapid expansion of clean energy and structural changes in the global economy, particularly in China, overall energy demand growth is beginning to slow, as more electrified systems powered by renewable energy are more efficient than fossil fuel-dependent systems.
Long-Term Energy Storage Trends: The long-term trend for energy storage is clear. Although annual energy demand growth may be influenced by economic conditions, weather patterns, or hydropower availability, under the current policy framework, the long-term growth trend is undeniable. By 2030, the continued growth of global energy demand is expected to be fully met by clean energy, without reliance on fossil fuels. This transition requires joint efforts from policymakers, businesses, and society to drive technological innovation and infrastructure development (with energy storage serving as a foundational element of new electricity systems), ensuring the sustainable growth and use of clean energy and supporting global economic development.
Forrest
Cooltechx Marketing
