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Energy Shift

How Far Are We From Phasing Out Coal?

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Phasing_Out_Coal

How Far Are We from Phasing Out Coal?

At the COP26 conference last year, 40 nations agreed to phase coal out of their energy mixes.

Despite this, in 2021, coal-fired electricity generation reached all-time highs globally, showing that eliminating coal from the energy mix will not be a simple task.

This infographic shows the aggressive phase-out of coal power that would be required in order to reach net zero goals by 2050, based on an analysis by Ember that uses data provided by the International Energy Agency (IEA).

Low-Cost Comes at a High Environmental Cost

Coal-powered electricity generation rose by 9.0% in 2021 to 10,042 Terawatt-hours (TWh), marking the biggest percentage rise since 1985.

The main reason is cost. Coal is the world’s most affordable energy fuel. Unfortunately, low-cost energy comes at a high cost for the environment, with coal being the largest source of energy-related CO2 emissions.

China has the highest coal consumption, making up 54% of the world’s coal electricity generation. The country’s consumption jumped 12% between 2010 and 2020, despite coal making up a lower percentage of the country’s energy mix in relative terms.

Top Consumers2020 Consumption (Exajoules) Share of global consumption
China 🇨🇳82.354.3%
India 🇮🇳17.511.6%
United States 🇺🇸9.26.1%
Japan 🇯🇵4.63.0%
South Africa 🇿🇦3.52.3%
Russia 🇷🇺3.32.2%
Indonesia 🇮🇩3.32.2%
South Korea 🇰🇷3.02.0%
Vietnam 🇻🇳2.11.4%
Germany 🇩🇪1.81.2%

Together, China and India account for 66% of global coal consumption and emit about 35% of the world’s greenhouse gasses (GHG). If you add the United States to the mix, this goes up to 72% of coal consumption and 49% of GHGs.

How Urgent is to Phase Out Coal?

According to the United Nations, emissions from current and planned fossil energy infrastructure are already more than twice the amount that would push the planet over 1.5°C of global heating, a level that scientists say could bring more intense heat, fire, storms, flooding, and drought than the present 1.2°C.

Apart from being the largest source of CO2 emissions, coal combustion is also a major threat to public health because of the fine particulate matter released into the air.

As just one example of this impact, a recent study from Harvard University estimates air pollution from fossil fuel combustion is responsible for 1 in 5 deaths globally.

The Move to Renewables

Coal-powered electricity generation must fall by 13% every year until 2030 to achieve the Paris Agreement’s goals of keeping global heating to only 1.5 degrees.

To reach the mark, countries would need to speed up the shift from their current carbon-intensive pathways to renewable energy sources like wind and solar.

How fast the transition away from coal will be achieved depends on a complicated balance between carbon emissions cuts and maintaining economic growth, the latter of which is still largely dependent on coal power.

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Energy Shift

Visualizing Global Energy Production in 2023

Fossil fuels accounted for 81% of the energy mix.

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Pie chart showing energy production by source in 2023.

Visualizing Global Energy Production in 2023

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Global primary energy consumption reached a new record of 620 exajoules (EJ) for the second consecutive year in 2023, up from 607 exajoules in 2022.

This graphic shows the sources of energy used globally in 2023, measured in exajoules. Data is from the 2024 Statistical Review of World Energy by the Energy Institute, released in June 2024.

Fossil Fuels Accounted for 81% of the Energy Mix

Despite efforts to decarbonize the economy, fossil fuels still accounted for over 80% of the global energy mix in 2023.

Oil was responsible for 32% of the energy consumed around the world, followed by coal (26%) and then natural gas (23%).

Energy SourceConsumption in exajoulePercentage (%)Fossil Fuel
Oil19632%Yes
Coal16426%Yes
Natural Gas14423%Yes
Hydro-electric406%No
Nuclear Energy254%No
Other Renewables518%No
Total620100%

The Asia-Pacific region was responsible for nearly 80% of global coal output, with significant contributions from Australia, China, India, and Indonesia.

Global coal consumption also continued to rise, exceeding 164 EJ for the first time ever.

China remains the largest consumer of coal, accounting for 56% of the world’s total consumption. However, in 2023, India’s coal consumption exceeded the combined total of Europe and North America for the first time.

Oil consumption, in particular, rebounded strongly last year compared to 2022, largely due to China relaxing its zero-COVID lockdown policies.

Renewables’ share of total primary energy consumption reached 14.6%, an increase of 0.4% over the previous year. Together with nuclear, they represented roughly 19% of total primary energy consumption.

Renewables like solar and wind accounted for 8% of the energy generated in 2023, followed by hydroelectric (6%) and nuclear (4%).

Editor’s Note: The graphic was updated on July 16, 2024, to correct an error in the fossil fuel values.

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Energy Shift

Visualized: The Growth of Clean Energy Stocks

Visual Capitalist partnered with EnergyX to analyze five major clean energy stocks and explore the factors driving this growth.

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This line chart shows the growth of clean energy stocks and hints at their cumulative five-year returns.

The Growth of Clean Energy Stocks

Over the last few years, energy investment trends have shifted from fossil fuels to renewable and sustainable energy sources. Long-term energy investors now see significant returns from clean energy stocks, especially compared to those invested in fossil fuels alone.

For this graphic, Visual Capitalist has collaborated with EnergyX to examine the rise of clean energy stocks and gain a deeper understanding of the factors driving this growth.

Sustainable Energy Stock Performance

In 2023, the IEA reported that 62% of all energy investment went toward sustainable sources. As the world embraces sustainable energy and technologies like EVs, it’s no surprise that clean energy companies provide solid returns for their investors over long periods.

Taking the top-five clean energy stocks by market cap (as of April 2024) and charting their five-year cumulative returns, it is clear that investments in clean energy are growing:

CompanyPrice: 01/04/2019Price: 12/29/20245-Year-Return %
First Solar, Inc.$46.32$172.28272%
Enphase Energy, Inc.$5.08$132.142,501%
Consolidated Edison, Inc.$76.55$90.9719%
NextEra Energy, Inc.$43.13$60.7441%
Brookfield Renewable Partners$14.78$26.2878%
promotional graphic with a button and wheel that promotes the EnergyX investment site

But how does this compare to the performance of fossil fuel stocks?

When comparing the performance of the S&P Global Oil Index and the S&P Clean Energy Index between 2019 and 2023, we see that the former returned 15%, whereas the latter returned an impressive 41%. This trend demonstrates the potential for clean energy stocks to yield significant returns on an industry level, sparking optimism and excitement for potential investors.

A Shift In Returns

With global investment trends moving away from traditional, non-sustainable sources, the companies that could shape the energy transition provide investors with alternative opportunities and avenues for growth.

One such company is EnergyX. The lithium technology company has patented a groundbreaking technology that can improve lithium extraction rates by an incredible 300%, and its stock price has grown tenfold since its first offering in 2021.

promotional graphic that promotes the EnergyX investment site
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