Over $1 trillion invested in green energy in 2022. Here’s what you need to know about how the energy transition is powering up despite the crisis

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Roberto Bocca, Head of Shaping the Future of Energy and Materials; Member of the Executive Committee, World Economic Forum, Stefan Ellerbeck, Senior Writer, Formative Content

• This weekly round-up brings you the latest on developments in the global energy sector.
• Top energy news: Over $1 trillion invested in green energy in 2022; New funds for renewable energy projects in Africa; Shell announces record profits in 2022.
• For more on the World Economic Forum’s work in the energy space, visit the Shaping the Future of Energy, Materials and Infrastructure platform.

1. News in brief: Energy stories from around the world

Worldwide investment in the green energy transition amounted to $1.1 trillion in 2022, setting a new record according to a report by BloombergNEF. It says this represented a rapid acceleration from the year before as the energy crisis prompted faster deployment of low-carbon technologies.

Shell made a record $40 billion profit in 2022, following a surge in energy prices after Russia’s invasion of Ukraine. The UK-based company’s earnings, which more than doubled from a year earlier, mirror those reported by many of its competitors and will ramp up pressure on governments to further raise taxes on the sector.

Saudi Arabia will invest up to SAR 1 trillion $265 billion to generate “cleaner energy”, according to the kingdom’s energy minister. Prince Abdulaziz bin Salman said the investments also aim to “add transport lines and distribution networks in order to eventually export the energy to the world and produce clean hydrogen”.

The World Bank has signed an agreement with four African nations to fund renewable energy projects. The $311 million package will finance solar power generation and hydroelectric capacity in Sierra Leone, Liberia, Togo and Chad.

The European Commission is proposing to allow increased levels of state aid so that Europe can compete with the US as a manufacturing hub for electric vehicles and other green products, while also reducing its dependence on China. The move is a response to the US and China’s multi-billion-dollar support programmes aimed at speeding up the green transition.

US solar energy contract prices have risen by a third over the past year as project developers have struggled to get imported panels, according to new data. But wind energy prices fell slightly in recent months as a result of new government subsidies.

EU funds could finance up to half of an underwater hydrogen pipeline to be laid between Spain and France, according to Spanish energy giant Enagas. The two countries have agreed to explore the possibility of building a pipeline to ship green hydrogen between Barcelona and Marseille at an estimated cost of €2.1 billion.

Indonesia’s gasoline consumption and imports could break records this year as the nation recovers from COVID-related travel curbs. A spike in imports could also accelerate plans for adding methanol and ethanol to gasoline to reduce the country’s reliance on overseas supplies, adding to its already extensive adoption of biodiesel.

Renewable utilities supplied 88% of Portugal’s electricity consumption in January, as significant rainfall together with good wind and solar conditions allowed a sharp reduction in the use of gas-fired power plants. The country aims to generate 80% of its annual electricity usage from renewables by 2026, up from 60% in 2022, which was already one of the highest ratios in Europe.

2. EU coal-use rise smaller than expected in 2022

European coal-fired power generation climbed last year as countries scrambled to replace Russian gas, but the increase was smaller than feared as renewable energy helped to plug the gap, according to analysis by energy think tank Ember. Russia’s invasion of Ukraine in February 2022 led to a large reduction in Russian gas supplies to the EU, causing prices to spike.

As a result, coal’s share of EU electricity generation rose by 1.5 percentage points in 2022, to account for 16% of the total, its highest share since 2018. Outright coal generation increased by 7% in 2022, pushing up power sector CO2 emissions by nearly 4%.

However, the report says that coal and gas-fired power generation were each less than that of renewable energy such as wind, solar and hydropower last year. Wind and solar power generation combined comprised a record 22% of the total share. Nuclear and hydropower contributed 32%. Gas generated 20%, which was less than wind and solar for the first time.

Ember said the return to coal – the most polluting fossil fuel – “could have been much worse”. Increased generation from wind and solar plus an overall drop in EU power use amid mild weather and consumers conserving energy due to high prices prevented a bigger coal rebound, it said. EU solar generation increased by a record 24% last year.

The EU says any uptick in coal use will be short-lived, and that countries should try to make up the loss in Russian gas supplies using green energy.

3. South Africa to use more renewable energy to help tackle electricity crisis

South African mining company Seriti Resources says it is investing in wind power in the latest move by industry to wean itself off a national grid plagued by power cuts. It says a ZAR 4 billion ($234 million) wind farm will be able to supply 75% of the power needed by its coal mines in Mpumalanga.

The project is one of several planned renewable energy projects that the company says will help ease rolling power cuts in Africa’s most advanced economy. State power utility Eskom’s inability to meet demand has led to a record number of scheduled power cuts, known as “loadshedding”.

Seriti says the wind farm is expected to feed power into the national grid from 2025. “There are short-term solutions to alleviate some stages of loadshedding, but the only long-term solution is new generation,” said Peter Venn, CEO of Seriti’s renewable energy subsidiary Seriti Green.

Another South African coal and fuel producer, Sasol, last month signed three wind power purchase deals. It says it wants to shift towards renewable energy to meet its carbon emissions targets.

4. More on energy from Agenda

Heat pumps could make our homes, workplaces and public buildings more sustainable while increasing energy security. Thanks to soaring energy prices, they are also on course to become the cheapest heating option.

Airlines belonging to the International Air Transport Association have pledged to reach net zero emissions by 2050. Alternative fuels and engine innovations could help sustainable aviation become a reality.

The world is set to add as much renewable power in 2022-2027 as it did in the past 20. This makes energy storage increasingly important, as renewable energy cannot provide steady and interrupted flows of electricity. Here are four innovative ways we can store renewable energy without batteries.

To learn more about the work of the Energy, Materials, Infrastructure Platform, contact Ella Yutong Lin: ellayutong.lin@weforum.org