Stefan Ellerbeck, Senior Writer, Forum Agenda, World Economic Forum
- Power capacity from clean energy sources comprised a record 40.6% of the US electricity mix in 2022, according to the Business Council for Sustainable Energy.
- This includes nuclear power, which is not renewable, but doesn’t produce greenhouse gas emissions.
- Wind, hydroelectric and solar power were the biggest areas of renewable capacity growth last year.
- More than $1 trillion was invested in the global energy sector in 2022, with $141 billion of that being spent in the United States.
Power capacity from clean energy sources comprised 40.6% of the US electricity mix in 2022, an all-time high.
That’s one of the key takeaways from the 2023 Sustainable Energy in America Factbook. It monitors energy market and policy trends in the US, and is produced annually by BloombergNEF and the Business Council for Sustainable Energy.
The rise of renewable energy
According to the report, renewables, such as solar, wind, nuclear, geothermal and hydropower, saw the fastest growth of the major sectors with a year-on-year rise of 12.6%.
Nuclear is regarded as a zero-carbon energy source because it doesn’t emit greenhouse gases.
Natural gas remained the biggest source of electricity in the country, contributing a record-breaking 39.4% of the total, up from 6.5% the year before. However coal-fired generation fell to 19.4% and nuclear generation contributed 18%.
Wind was the largest source of renewable power last year, followed by hydroelectric generation and solar power. However, factors like higher costs and supply chain issues meant less wind and solar energy generating capacity was added to the US grid: 32 gigawatts (GW) in 2022 versus 37GW in 2021.
Lisa Jacobsen, President of the Business Council for Sustainable Energy, believes the swift increase in low-carbon power is set to continue. “The US economy is primed for clean, sustainable growth that will reduce emissions and increase employment opportunities while ensuring that we have the sustainable energy we need to continue growing the economy,” she says.
High gasoline prices in the US have made ownership of electric vehicles (EVs) more appealing. According to the report, sales of EVs and fuel cell vehicles (FCVs) rose by 50% to around 982,000 units, representing 7.1% of all vehicle sales in the US in 2022.
“Battery electric vehicles made up 81% of 2022 sales, with plug-in hybrid electric vehicles making up the remaining 19% and FCVs accounting for well less than 1% of sales,” the report’s authors say.
The passing of President Biden’s 2022 Inflation Reduction Act (IRA) is cited as a key factor in the buoyant EV market. The price at which EVs qualify for tax credits has been capped under this legislation, helping manufacturers keep prices down even as battery costs have increased.
Record investment in the energy transition
More than $1 trillion of private investment went into the global energy transition in 2022, which “shattered records” according to the report. The US attracted the second-highest amount, $141 billion, which represented an 11% increase over 2021.
Over 40% ($57.3 billion) of this investment went into electrified transport, and $49.5 million was pumped into the renewable energy sector. At least $369 billion of government funds is also due to be invested through the IRA.
“The record levels of private-sector investment in both the US and around the world in 2022 point to the durability of the energy transition, even when faced with inflationary and supply chain pressures. Corporate demand, coupled with a historic public sector injection of capital into US infrastructure, is sure to exponentially expand the reach of the clean energy transition,” the report says.
US emissions rise, but remain below 2019 levels
Greenhouse gas emissions across the American economy rose by 1% in 2022. This followed a 5.8% increase in 2021. However, the report notes that emissions remained 3% below pre-pandemic levels and a substantial 13.8% below levels recorded in 2005.
Emissions from the power sector dropped 1.5% from the year before and are now 35% down from 2005 levels. Meanwhile, emissions from the transportation sector rose 1.4% in 2022 and are currently the largest contributor to emissions.
However, the report authors say much more needs to be done to ensure US emissions hit climate targets.
“The US has pledged under the framework of the Paris Agreement to reduce economy-wide emissions 50-52 percent below 2005 levels by 2030, and current emissions are down only 13.8 percent. For the power sector to “stay on track,” emissions would have needed to fall 6 percent or more in 2022, but they dropped only 1.5 percent (in 2022). Emissions in all other sectors would have needed to fall 0.9 percent but instead rose 1.9 percent.”
The World Economic Forum’s Energy Transition Index also shows that current progress is not enough to limit global warming to 1.5°C by 2050, as highlighted in its latest insight report on the issue.
“The need to urgently accelerate the energy transition is clear… Winning the race requires stakeholders at every level and in every geography to step up and work together: on reducing demand for fossil fuels, ramping up clean energy investments, decarbonizing industries and reshaping end consumer energy consumption in a way that lays the foundation of a sustainable future that is both inclusive and resilient.”
This article has been sourced from World Economic Forum and can be accessed here