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Lockdowns impacted OECD and non-OECD countries differently

  • Generation in developing (non-OECD) nations continued to rise in 2020 despite the pandemic, but slipped in wealthier (OECD) countries. Non-OECD generation demand inched up 1% though that was far below the 7% growth rate projected under BNEF’s 2019 New Energy Outlook, published before the pandemic. In OECD nations, demand dropped 2% in absolute terms from 2019. BNEF had expected demand in these nations to grow 3% year-on-year.

  • China’s sustained growth contributed significantly to the top line figure for non-OECD countries. Electricity generation rose 4% in China 2019-2020 to 7,43TWh. Across the rest of the non-OECD nations, generation actually slid 1%.

Renewables put the squeeze on coal with record output in 2020

  • Non-hydro renewables reached 12% of total generation, compared to 9% in 2018 and 4% in 2011. Wind accounted for 6% in 2020, followed by solar (3%). The share of renewables jumps to 29% when including hydro generation.

  • Coal represented 34% of total power production in 2020, down from a 10-year high of 40% in 2013. This was the also smallest share in over 20 years.

  • The share of generation from natural gas and nuclear held steady over the past three years. Gas accounted for 23% of the total power produced in 2020, while nuclear represented 10%.

In a first, only renewables saw a net year-on year generation rise

  • Renewable energy technologies (including hydro) enjoyed substantial gains in 2020 and were responsible for all additional generation on a net basis. In contrast, fossil fuels saw their biggest year-on-year drop in a decade. The total net change in power produced globally was also the smallest in absolute terms in a decade.

  • Solar generation grew more than ever in 2020, with 148TWh more generation in 2020 compared to 2019. Solar and wind accounted for 310TWh, or roughly 77.5%, of new generation, while fossil fuels dropped by 362TWh.

Wind and solar accounted for over two-thirds of net new capacity in 2020

  • While electricity demand remained flat 2019-20, new power-generating capacity added reached its highest level in a decade at 314GW.

  • Wind and solar accounted for 69% of the total new build at 218GW – twice the build rate of a decade ago. Solar enjoyed another record year, representing 46% of total additions. Including biomass, geothermal and hydro, renewables additions represented 80% of global net capacity growth in 2020.

  • In 2020, the world saw the lowest level of new coal build in a decade, with only 24GW added compared to 50GW in 2019. Coal closures also contributed to the modest growth in coal capacity. What was once the top technology at the beginning of the decade represented just 7.5% of total additions in 2020.

In 2020, solar was the most installed technology in half the world’s nations

  • The fundamental transformation of which technologies are getting deployed worldwide highlights the clean energy evolution underway. Renewables were the most popular new power-generating technology deployed on a capacity basis in 75% of countries in 2020. In 51 countries, solar was the most installed, compared to 41 in 2019 and 11 in 2011.

  • For the first time, China added more renewables capacity than fossil fuels, with solar the top choice in 2020. Coal was the most added technology in only three markets, compared to 11 in 2019.

Global passenger electric vehicle sales have tripled in four years

  • Global passenger EV sales reached 3.2 million in 2020, a tripling from 2017. From 2019 to 2020 alone, annual sales spiked 45%. BNEF expects 2021 to be yet another record with 5.6 million sold in total.

  • EV sales accounted for 4.4% of global car sales in 2020. This is up from 2.7% in 2019 and just 0.6% in 2015. Record high EV sales in 2020 put a dent in sales of internal combustion engine (ICE) vehicles. These were down 16% globally in 2020, allowing for EVs to gain market share.

Emerging market EV sales are highly concentrated in China

  • China accounted for 92% of 2020 EV sales in emerging markets with 1.2 million vehicles sold. Since 2015, the country has seen 4.3 million such vehicles sold, more than the top 10 developed markets for electric vehicles combined.

  • But EV sales growth has decelerated in China recently. Annual sales in the country nearly doubled 2017-2018, but rose just 15% 2018-2020.

  • Other emerging markets are a tiny share of total global EV sales, but their progress should not be overlooked. In 2020, these nations accounted for just 3% of global EV sales and 8% of sales among developing nations. However, the number of units sold in these nations jumped over 50% 2019-2020.

  • Emerging markets (excluding China) saw a steep growth in EV sales 2019-2020 to just over 105,000 units. This represented a 51% spike from 2019 and a three-fold jump since 2017. Despite some growth, EV sales accounted for less than 0.5% of total vehicle sales in these nations in 2020.

High reliance on natural gas could slow heat decarbonization

  • Natural gas is the main source of heating in a third of the analyzed heating countries, mostly in Europe, North America and Asia-Pacific, where it provides over 50% of residential heat.

  • Low-carbon heating technologies, such as heat pumps, increased their share of residential heat over 2010-2019 but gas heating also grew during this time. A key reason is the low price of gas heating, making it a barrier for electrifying heat. Without subsidies, wide adoption of heat pumps pushes the transition costs largely onto households.

  • Fuel-switching to low-carbon hydrogen is an alternative, but less likely, way of decarbonizing gas heating. Low-carbon hydrogen is likely to first be deployed for industrial purposes, rather than for residential use. To enable residential use of hydrogen, considerable investments would be needed to both individual boilers and gas distribution networks.

European countries and Japan lead residential heat pump growth

  • Across Europe, the U.S., Japan and South Korea, annual heat pump sales have nearly doubled over the past decade. This includes both air- and ground-source units.

  • Norway, Portugal and Japan are estimated to have the highest use of heat pumps, able to meet 15-16% of residential heat demand. However, the share could be even higher, as heat pump usage data is often estimated or underreported.

  • Heat pump uptake usually leads to reduced energy consumption, as a heat pump produces 2-3 times more heat than traditional electric heaters using the same amount of electricity. In very cold countries, such as Canada, the more expensive ground source heat pumps work better but have yet to gain wide popularity.


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Lockdowns impacted OECD and non-OECD countries differently
Renewables put the squeeze on coal with record output in 2020

Climatescope 2021

Energy Transition Factbook

This marks the 10th anniversary of Climatescope, BNEF’s annual assessment of energy transition opportunities. For the first time, the project has expanded its scope to include activity not just in clean power but in the decarbonization of the transportation and buildings sectors.

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