Report: EU and US energy systems in transition

Clean energy investments in the EU and US are displacing coal and gas

New investments in clean energy across the US and EU look set to steadily knock gas and coal out of power grids through the 2020s, this new analysis of energy trends shows.

Renewables already generate more electricity than either coal or nuclear power in both the US and EU. Wind and solar generated enough electricity in 2022 to power about 85% of all households in the EU – ensuring consumer bills were 15% lower than they would have otherwise been, according to the International Energy Agency (IEA). The IEA estimates that new wind and solar capacity saved the EU around EUR 100 billion between 2021 and 2023.

The increase in US output from wind and solar will displace some generation from coal and gas-fired plants in 2023 and 2024. US wind power capacity has doubled and solar power has tripled since 2017, says the government-run Energy Information Administration. Private equity firms have committed more than USD 100 billion in renewable energy investments eligible for tax credits since the US Inflation Reduction Act was passed.

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This report is the second in a series of  reports looking at evidence of the pace of growth in the clean energy transition. The report builds on several pieces of research on exponential systems change released by RMI, Systems Change Lab and others this year, which shows that change is happening faster than we think. 

Quotes

“We are seeing record levels of growth in newly installed wind and solar capacity in the EU and US. This growth is the result of supporting public policy and private businesses which are simply acting on what makes economic sense. This momentum must be built upon by global leaders at COP28. They have an opportunity to agree on a global goal on renewables which will accelerate us towards the energy transition that is needed to meet 1.5°C. We need a quantified goal [in terawatt hours], and importantly this must be linked to a rapid phase out of all fossil fuels.”

Petter Lydén, Head of International Climate Policy Division, Germanwatch

“The expansion of wind energy will come with huge economic benefits for Europe. The EU aims to grow its wind energy capacity from just over 200 GW today to 420 GW by 2030. Europe’s wind industry already contributes €42bn to EU GDP and employs 300,000 people. By 2030 it will be more than 500,000 people. Inflation and increased input costs are currently creating issues for wind turbine manufacturers and developers. But the European Commission has doubled down on its wind energy ambitions. Its recently presented Wind Power Action Plan will accelerate the permitting of new wind farms and help finance new manufacturing capacities”

Pierre Tardieu, Chief Policy Officer, WindEurope

“The US and the EU are on high speed towards an electrified future. A rapid uptick in heat pumps and electric vehicles means that renewable electricity is not just cutting power sector emissions, but across the entire economy. The rate of change means that although the falls in emission don’t look big today, if the momentum continues as it is today, we should expect to see big falls in emissions coming soon.”  

Dave Jones, Global Insights lead, Ember