The pace of the global energy transition has been vastly underestimated, RMI analysis shows

The global clean energy transition is outpacing almost all projections, according to a new analysis by nonprofit research group RMI, which says the goals of the Paris Agreement remain “feasible” despite widespread scepticism.

“Exponential change has been remarkable in the past decade,” the group writes in a new report. “The drivers of growth are more powerful than the barriers.”

Among other findings, RMI says cleantech costs have fallen by up to 80% over the past 10 years, spurring a near tenfold increase in investment and twelvefold surge in solar generation. Meanwhile, “the deep force of efficiency”, combined with advances in electrification, has reduced energy demand by a fifth.

As a result, additions of fossil fuel-based electricity capacity peaked in 2010, oil and gas capital expenditure peaked in 2014, and internal combustion engine (ICE) car sales have declined from their highs of 2017. Fossil fuel demand peaked in the industrial sector in 2014 and in the buildings sector in 2018, RMI says.

In the electricity sector, the peak “most likely” came in 2023, and transport will soon follow.

Research group Ember agrees that peak emissions in the power sector are now likely behind us, with the world having passed the 30% renewable electricity mark for the first time in 2023.

RMI forecasts that by 2030, the world will install 1,000 gigawatts (GW) of solar and 6,000 gigawatt-hours (GWh) of batteries a year. Electrification rates will double to 0.5% annually, and efficiency gains will increase to over 3% a year, it predicts.

This means the goal to limit warming to below 2 degrees Celsius above the pre-Industrial Revolution era remains achievable, “and the Global South will continue to leapfrog to cleantech.”

But the fossil fuel industry faces a reckoning, RMI says.

China’s massive investments in clean energy supply chains have helped to fuel “a race to the top”, which “will continue to overwhelm a fragile fossil fuel system that wastes two-thirds of its primary energy and fails to pay for its externality costs.”

In a new report, the International Energy Agency found that investment in clean energy will reach $2 trillion in 2024, almost double the amount spent on fossil fuels.

The IEA also reiterated its projection that oil demand will peak in the next few years due to the shift to electric vehicles and improved efficiencies.

As such, supply will soon exceed consumption by a “staggering” amount, despite rapid increases in energy use in developing countries.

“Oil companies may want to make sure their business strategies and plans are prepared for the changes taking place,” the agency’s executive director, Fatih Birol, said in a statement.