The energy transition is advancing but in an increasingly disorderly and uneven way, Nick Wayth, CEO of the Energy Institute (EI), said while presenting the key findings of the 2025 Statistical Review of World Energy.

Last year was a year of records. Not only record energy supply, which rose by 2%, to 592EJ, but also record supply of renewables as well as gas, oil, coal and nuclear. Renewables output increased by 14% versus 2023, outpacing all other segments and supplying 17.3% of total electricity. When including hydroelectricity, which saw a 4.2% increase, renewables accounted for close to a third of total power supply.

Among the fossil fuels, gas saw the most growth, with consumption up 2.5% at 4.13tcm. Oil demand rose by a modest 0.8%, to 10.47m b/d, while coal use increased 0.9%, to 165EJ. Fossil fuels held an 86% share of the global energy mix, with the growth rate for use in 2024 in line with the decade-long trend. Nuclear generation, meanwhile, climbed 2.6%. Wayth noted this was the first time all major energy sources achieved record consumption since 2006.

“We are witnessing a highly disorderly shift, rather than a coordinated global effort” Wayth, EI

The data shows that the energy transition is underway, “but with very different starting points and at very different paces across the globe”, he said. “This is not a clean handover from fossil fuels to renewables thus far,” he said. “It is energy addition, not energy substitution. The transition is progressing, but unevenly. Some regions are cutting fossil fuel use, but others are expanding it. We are witnessing a highly disorderly shift, rather than a coordinated global effort.”

“This year’s data reflects a complex picture of the global energy transition,” added Andy Brown, president of EI. “Electrification is accelerating, particularly in China, where access to low-carbon energy solutions is expanding rapidly. However, globally the pace of renewable deployment is still being outstripped by overall energy demand growth, much of which continues to be met by fossil fuels.”

Last year was the fourth consecutive year when both fossil fuel demand and CO₂ emissions hit a new record, “highlighting the structural challenges in aligning global energy consumption with climate goals”, he said.

The age of electrification?

Electricity generation rose by 4%, to 31,256TWh in 2024, exceeding its 2.6% growth rate over the past decade, which in turn was double the growth rate of overall energy demand in that period. More than half of that growth in power demand was met by renewables.

China accounted for around half of this expansion, increasing its power demand by 6.4%, to 10,087TWh last year—the equivalent of two UK electricity systems. Over the past decade it has added as much new generation as the entire current output of Europe.

“China is now the most electrified energy system of any advanced economy in the world, and [electricity generation] is growing fast, and it is doing so predominately with low-carbon additions,” Brown said.

Growth in power generation was seen across all regions, rising by 5.4% in Asia-Pacific, 2.2% in North America, 1.5% in Europe, 2.7% in the CIS, 5.3% in the Middle East, 2.9% in South and Central America, and 4% in Africa.

Extreme weather, including record temperatures across Europe and North America, accounted for 60% of the increase in global electricity demand. The expansion of AI and cloud computing also played a role through increased demand from datacentres, particularly in the US and China. Global electric vehicle (EV) sales were also up by a quarter.

The pace at which electricity expands its role in the energy mix is accelerating, Wayth said, describing the shift as structural.

Solar to overtake wind

Solar and wind were the first- and second-biggest contributors to increased generation. Solar power saw a 27.6% surge in growth in generation in 2024, to 2,112TWh, while wind grew by only 7.8%, to 2,511TWh. Solar also outperformed wind in terms of capacity additions, registering a 36.5% increase, to 1.19TW. Only 611GW of new wind capacity was installed during the year, up by 16.8% versus 2023.

Solar will surpass wind in generation this year if the current trend continues, Wayth said. Solar enjoys lower levelised costs than wind, which has suffered from increased supply chain costs and permitting issues.

“Gas is increasingly seen not just as a bridging fuel, but something that can provide part of a resilient energy system” Jafri, KPMG

China was responsible for most of the increase in wind and solar generation last year, while Europe, despite its high climate ambitions, faces a “reality check” on renewables, Wafa Jafri, partner and UK leader for energy and natural resources strategy at professional services firm KPMG, said at the launch. Last year, Europe increased its wind and solar output by only 7%, well below the global average, amid rising financing costs due to high interest rates, permitting delays and increases in supply chain costs.

“What we are seeing are businesses stepping back from projects that are shovel-ready and ready-to-build,” Jafri said. She added that, beyond China, the rest of the world might find it difficult to meet the COP28 pledge to triple renewable energy capacity by 2030.

While a leader in clean energy deployment, China presents a “paradox” as it also sources around 60% of its power from coal and is the largest contributor to global emissions, Wayth said. “China’s trajectory will have an outsized impact on the global energy future.”

Gas gains, oil holds ground

Around half of the 2.5% increase in gas demand came from the Asia-Pacific region—primarily China, Japan and India. Consumption grew in every region except Africa, which registered a modest 0.9% decline.

In contrast, global production rose by only 1.2% to 4.12tcm, with the difference covered by storage withdrawals. Output in the CIS region was up 5%, and in Asia-Pacific by 2.1%, while Europe’s production dropped by 3.4% and Africa’s 5.8%.

As LNG trade remained stable, pipeline gas trade grew by 43bcm on the back of increased exports by Russia to Europe, neighbouring CIS countries and China.

The strong demand for gas is indicative of its staying power. “Natural gas is increasingly seen not just as a bridging fuel, but something that can provide part of a resilient energy system,” Jafri said.

Oil consumption took a hit from China’s economic downturn and the country’s shift towards EVs, although this was more than offset by growth elsewhere, notably in India and Southeast Asia.

While oil demand continues to rise, “we are seeing a flattening”, Wayth said. As for when oil demand peaks, he said a lot would depend on whether Chinese consumption recovers. He noted China’s adoption of LNG-fuelled trucks as a factor weighing on the country’s oil use.

Global oil production saw a modest increase of 0.6%, to 9.69m b/d, on the back of record US output, which exceeded 20m b/d, which is close to the combined supply of Saudi Arabia and Russia. This could be the high-water mark for US supply, however, given declining reserves and increased capital discipline by producers, Wayth said.

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Author: Joseph Murphy