Renewable electricity is growing rapidly now, so much so that emissions from power production are falling sharply in some countries.¹ Last year, coal consumption in the United Kingdom hit its lowest level since the 1730s, and the UK will soon be entirely free of coal as a power source.² In the developed world as a whole, emissions from electricity production peaked years ago and have fallen sharply.

Unfortunately, this trend has still not taken hold at a global scale. While renewables are growing faster than any other source of electricity generation, they are not yet growing fast enough to satisfy all new power demand. This means the power sector is still responsible for about 23 percent³ of global emissions. Moreover, electricity demand is starting to grow in many developed economies where it had been stagnant for a decade. This is mostly good news, as it means that the exhortation to ‘electrify everything’ is working. The spread of electric cars is driving up power demand. So is the rising popularity of heat pumps, which are displacing gas furnaces and boilers. In addition, the rapid growth of data centres for computing is also a fast-rising source of demand. Where worldwide demand for power had been growing by about 2.5 percent a year, the International Energy Agency now forecasts that it will grow at 4 percent for at least the next few years.⁴

That is a big shift, and meeting fast-growing demand entirely with clean energy will be difficult. But it may be possible if countries follow through on the commitment we mentioned earlier, to triple their renewable-energy installations by 2030.

In recent years, droughts in China cut that country’s production of hydropower, forcing coal-burning power plants to make up the electricity shortfall. Blackouts occurred in some regions. Spooked by the droughts and their effect on its mighty hydropower system, China built a wave of new coal-fired power plants, even as it also carried out the world’s largest installation program for renewable energy. That revival of coal-plant construction in China may now be waning, however. Approvals for new plants fell by nearly 80 percent in the first half of 2024⁵ — a clear signal that the Chinese leadership is tapping the brakes on new coal.

Electricity is likely to be the first sector of the economy where emissions go into a long-term structural decline. When that finally happens, it will be a definitive signal that the energy transition is succeeding, due to the success of renewable energy across many parts of the world.

Solar power is the breakout star: installation of solar panels jumped by 74 percent worldwide last year, even as the cost of solar panels fell by nearly 50 percent.⁶ Production of wind energy rose by about 10 percent last year, with a particularly strong showing in Europe, where inflation and supply-chain disruptions had slowed things down for a while.⁷

As power demand rises worldwide, both fossil fuels and renewable energy are growing. Nuclear power is making a modest contribution to the grid clean-up, with production of electricity from nuclear plants rising by about 2 percent last year.⁸

We are seeing headwinds in some parts of the world. In the United States, the energy measures that President Joe Biden signed into law have led to a boom in solar power, but wind power there is lagging, bogged down by difficulties in siting new facilities and in securing connections to the grid.⁹ To meet forecasts of rising power demand, utilities are proposing to construct a wave of new gas-fired power plants. Clean-energy advocates are fighting the proposals, arguing that increases in demand can be handled with renewable energy and smarter management of the grid. 

Is the clean-up of the power grid happening fast enough to meet our climate goals?

The short answer is no. The countries of the world are not yet on track to triple the amount of renewable electricity by 2030, the critically important promise they made at the climate conference in Dubai. At the same time, it is clear that getting to that point is achievable. The International Energy Agency has calculated that if the goal of tripling is to be met, the share of total energy supplied by renewables must rise by about 13 percent a year between now and 2030, roughly double the rate of increase over the past five years. That is a global average; the required rate varies by country, but it is clearly feasible across much of the world with additional government policies.

Which policies are needed? Given falling costs and strong financial support from governments, the problem in the core renewables markets is not a shortage of capital. In fact, what is really holding back faster growth in these markets is red tape.

Grid operators, utilities and their regulators have essentially been caught flat-footed by the rapidly falling costs and fast growth of renewable energy. Across much of the world, they have failed to build transmission grids capable of handling the new, more distributed flows of electrical power. We are thus seeing the growth of waiting lists across the developed world as renewable energy developers request grid connections — and are told to go to the back of the queue. Waiting times now stretch for years in some locations.

Grid modernisation is now the critical issue to get the energy transition moving faster in the big, developed economies. Over the next few years, nothing else will matter as much as this issue. But securing permission to modernise — to build new power lines, to replace ageing ones, to install digital controls that make the grid more efficient — involves slow, cumbersome bureaucratic procedures. It typically entails fights about who is to pay for the upgrades. Modernisation may also involve intense public opposition to new power corridors, and thus require years of engagement to win public consent, where it can be done at all. For years, global investment in the grid had been flat at around $300 billion a year, but is forecast to rise to $400 billion this year.¹⁰ This is a hopeful sign, but much greater effort is needed.

The climate movement must turn its political firepower onto this problem. In the United States, the Federal Energy Regulatory Commission has just come out with new rules that should help get things moving, but the most important decisions will be made in the 50 public utility commissions that control the power grid for each of the 50 states. Those bodies need to hear from the public about the need to streamline the bureaucracy around the power grid.

In other countries, these decisions are typically made at a national level, even though many of the underlying political dynamics are the same. We find some hope in the recent actions of several European countries. In Germany, for instance, decisions about renewable energy and the grid had seemed hopelessly bogged down for years. But the current government has adopted a bold reform package to simplify permitting and other rules, and as a result, installations of both wind turbines and solar farms are moving much faster.¹¹

Another major problem is that renewable energy has yet to break out of its core markets — China, the United States, the European Union, Latin America and India — and spread to poorer countries like those of sub-Saharan Africa. Many of these countries still lack robust electric grids, and even the ones that do have grids are burdened by high financing costs for renewable energy projects — much higher than the costs in the core markets. As our Chairman Al Gore likes to point out, the immense continent of Africa has less solar power installed than the American state of Florida, a state with policies not especially favourable to solar energy.

The slow development of electric grids in poor countries means that many millions of people still do not have access to reliable electricity. As the above chart shows, the problem is gradually getting solved in much of the world, but it has been stubbornly persistent in Africa, where almost 600 million people still do not have power. In large parts of Africa and developing Asia, people still cook over open fires, inadvertently polluting their homes with smoke that causes millions of deaths a year. The need to gather wood, charcoal or dung to burn becomes a major burden, and contributes to the destruction of nearby forests.

In rural areas, the electricity problem can be ameliorated in the short term by off-grid solar systems that provide lights at night and charging for mobile phones; millions of Africans and Indians have already gained some access to electricity through these systems. But for the long term, the more plausible approach is extending and improving power grids, and the high cost of financing such projects in developing countries is the core issue. Early efforts to help are under way: for instance, rich countries have promised South Africa an initial $8.5 billion to assist the country in moving away from its heavy reliance on coal,¹² but so far there is little to show on the ground.

Poor countries need help to leapfrog the fossil era and move to clean power; helping them would be more than smart public policy. It is an urgent moral imperative.