Fossil fuels continue to play dominant role despite renewables growth

Fossil fuels continue to dominate the global energy system, with fast-growing renewables adding to the overall energy mix rather than replacing them, according to the Energy Institute’s latest Statistical Review of World Energy, produced in collaboration with KPMG and Kearney

Wind and solar combined grew by over 18% in 2024, making them the fastest-growing areas of the energy system, with China responsible for 56% of new wind and solar additions. But global energy demand is rising even faster, with total fossil fuel use growing by just over 1% and oil remaining the largest source of energy, accounting for 34% of total global demand.

Crude oil demand remained flat in OECD countries, but rose 1% in non-OECD countries, with Africa and the Middle East the fastest-growing regions in terms of oil demand. The USA is the world’s largest oil producer, accounting for 20% of global production in 2024.

Global natural gas demand rose by 2.5% as gas markets rebalanced after the 2023 slump. Global natural gas production rose to 4,124 bcm with the largest producers being the US, Russia, Iran, and China, which has risen from being the world’s sixth largest gas producer to its fourth over the last 10 years.

This simultaneous growth in clean and conventional energy illustrates the structural, economic, and geopolitical barriers to achieving a truly coordinated global energy transition, the Energy Institute comments, noting the 1% rise in energy emissions to record levels.

Total energy supply rose by 2% to reach a new high of 592 EJ, with records reached across all forms of energy. At 4%, electricity demand growth continued to outpace total energy demand growth, an indicator that the age of electricity is not just emerging but is shaping a new global energy system.

Energy Institute president Andy Brown OBE FEI said, “This year’s data reflects a complex picture of the global energy transition. Electrification is accelerating, particularly across developing economies where access to modern energy is expanding rapidly. However, the pace of renewable deployment continues to be outstripped by overall demand growth, 60% of which was met by fossil fuels. The result is a fourth consecutive year of record emissions, highlighting the structural challenges in aligning global energy consumption with climate goals.”

Dr Nick Wayth CEng FEI, CEO of the Energy Institute highlighted China’s influence over global energy trends, as it expands renewable capacity alongside coal, gas and oil. “The scale and direction of China’s energy choices will be pivotal in determining whether the world can deliver a secure, affordable, and low-carbon energy future."

Dr Romain Debarre, partner and managing director Energy Transition Institute, Kearney stated: “Energy security, resource access, and technological sovereignty are now taking priority over climate goals. This year’s data reveals three trends that are shaping the energy landscape: energy use is rising, but patterns are shifting; electrification is rapidly accelerating; and the energy transition remains chaotic.

“We are witnessing the dangers of a disorderly transition and the cost of inaction in real time. We have the strategies, technologies, and know-how to deliver net zero with an integrated, secure, and people-centred approach. Now, we must move from promises to action, at scale and at speed.”

Wafa Jafri, lead of Energy and Natural Resources Strategy and Partner KPMG in the UK observed Europe’s slowing progress on renewables and growth in China and emerging markets. “What’s emerging is not a uniform transition, but a disorderly one.

“Leaders navigating this need to look beyond headlines and towards practical delivery, regional opportunity, and strategies built for resilience as all facets of the energy trilemma: affordability, security of supply and decarbonisation, compete for priority.”