Solar, batteries and heat pumps led the green charge in 2023

Fossil fuels still supply around 80% of the world's energy needs, but 2023 saw significant advancements in renewable power.  

The intergovernmental International Energy Agency (IAE) said that global renewable energy capacity experienced its largest-ever growth this year, calling the increase "unprecedented."

Overall, experts say 2023 was a watershed moment for the global energy landscape, with renewable sources like solar and wind and other innovative technologies shaping a more sustainable future.

Solar driving energy transformation

Claudia Kemfert of the Berlin-based German Institute for Economic Research told DW that the increasing affordability of renewable power had led to a turning point for energy systems.

"For the first time, more investments are flowing into solar energy than oil extraction," added Kemfert. 

Solar completely exceeded expectations "once again" as a result, said Gunnar Luderer, an energy systems expert at Germany's Potsdam Institute for Climate Impact Research (PIK).

According to forecasts, new solar power installations around the globe were expected to hit a total capacity of 400 gigawatts (GW). In 2022, the increase was 239 GW.

Some 110 GW of wind power was newly connected to the grid in 2023, according to the World Wind Energy Association.

This year also saw the completion of four new nuclear reactors with a total capacity of 4 GW, while five old reactors with a capacity of 6 GW were decommissioned in Germany, Belgium, and Taiwan.

Solar and wind power make electricity generation cheaper

The favorable cost of electricity from renewables was one of the main reasons behind the strong growth in wind and solar.

Electricity produced by new onshore wind turbines cost 3 euro cents (3 US-dollar cents) per kilowatt-hour (kWh) in 2022 on average worldwide, according to a report by the International Renewable Energy Agency (IRENA).

Electricity produced in large solar parks was 4.5 euro cents per kWh. That's significantly cheaper than fossil fuels, which cost up to 22 euro cents per kWh globally.

The price of electricity from new solar installations continued to drop in the past 12 months, primarily because solar modules have become more affordable. In Europe, costs were 40% lower than last year.

Solar modules produced more affordably, especially in China

China's expansion of solar module production was one of the main drivers of falling prices. According to the UK-based environment website Carbon Brief, the country produces 600 GW of solar cells annually — 225 GW more than in 2022. By 2025, it could reach 1,000 GW.

India, the US, and the EU also plan to invest more in large solar factories. In India, modules with an annual capacity of 100 GW are set to be manufactured in 2027, and companies in the EU will start manufacturing modules with 30 GW in 2025.

"It's happening faster than expected," said Niklas Höhne from the NewClimate Institute, a think tank based in Cologne, Germany. "In particular, photovoltaics are being expanded extremely quickly. And, in fact, so quickly as to align with the 1.5-degree Celsius goal."

New battery technologies and more electric vehicles

"The year 2023 could go down in history as the turning point for batteries in the global energy transition," said Christian Breyer, a professor of solar economics at LUT University in Finland.

Lithium, cobalt and nickel batteries are well-established, "but now sodium-ion batteries are also being introduced to the market," said Breyer.

Lithium is rare and expensive, whereas sodium for new sodium-ion batteries is much cheaper, and the supply is virtually unlimited, for example, in table salt.

According to the business magazine Clean Thinking, the price of sodium batteries is already 40% lower than that of lithium-ion cells. However, they are still in the early stages of commercial development and currently make up less than 1% of batteries. In the future, sodium could be used primarily for stationary batteries.

Still, commonly used lithium-ion batteries are becoming cheaper due to the falling price of raw materials.

Batteries are increasingly used with small solar systems and in solar parks to store inexpensive electricity for nighttime use. More batteries are also required as electric mobility expands. The share of electric cars in global vehicle sales rose from 1.6% in 2018 to around 18% in 2023.

Global demand for heat pumps increasing

Progress is also being made in heating technology. According to the IEA, heat pumps are becoming a key technology in the global transition to a sustainable heating supply.

"The technology can be deployed on a large scale. Many countries, especially in Scandinavia, show how well the technology works, even when it gets very cold, as it is in Finland," said LUT's Breyer.

According to the IEA, heat pumps cover about 10% of global heat demand in buildings. In 2022, sales of the technology increased 11% globally and 38% in Europe. In Germany, preliminary figures show 2023 sales soared almost 50% on the previous year.

Despite the growth, "investments in heat pumps still lag behind what's necessary to achieve the goals of the Paris Agreement," says Roland Rösch, Director of the IRENA Innovation and Technology Centre.

To keep within the 1.5 C limit and avoid catastrophic climate change, the current $64 billion in annual global financing for heat pumps needs to quadruple by 2030, according to IRENA.

This article originally appeared in German.