2024 has been a transformative year for global energy. From breakthroughs in renewable technologies to reviving nuclear power, the energy sector is at the forefront of innovation and resilience. These advancements, however, unfolded against a backdrop of intensifying geopolitical tensions and escalating climate challenges. The interplay between energy security, diversification, and the ongoing transition from fossil fuels has shaped the year’s most pivotal developments. This review examines the defining trends of 2024, from surging solar capacity and the evolving role of nuclear power to the challenges facing ESG and offshore wind energy. Whether you're a policymaker, industry expert, or curious observer, this comprehensive analysis will provide you with the insights needed to navigate the complexities of the energy landscape as we head into 2025.
1. Voluntary Carbon Markets Get a Boost at COP 29: The 29th Conference of the Parties (COP 29) marked a significant milestone for voluntary carbon markets (UNFCC, 2024). These markets offer a flexible mechanism for entities to reduce their carbon footprint. Article 6 of the Paris Agreement allows companies and countries in developed regions, often referred to as the "Global North," to fund emissions reductions in developing areas, known as the "Global South," and to claim those reductions towards their climate pledges.
If implemented correctly, the carbon market would enable wealthy countries to meet their ambitious climate targets while providing essential climate finance for developing countries with limited resources. Although there are genuine concerns that emissions trading allows parties to buy their way out of the problem, negotiators who have been debating Article 6 for the last decade believe that the COP 29 agreement is the final hurdle to unlocking billions of dollars in climate finance. The International Emissions Trading Association estimates that Article 6 markets will help countries save about $250 billion per year by 2030 in meeting their nationally determined contributions under the UN's Paris Agreement.
2. Business Leaders Avoided Talking About ESG: In 2024, there was a noticeable reluctance among business leaders to engage in discussions about Environmental, Social, and Governance (ESG) criteria. Despite the growing importance of ESG in investment decisions and corporate strategies, many leaders were hesitant to address these topics publicly. This avoidance is largely due to regulatory uncertainties and the fear of potential backlash from political stakeholders. According to Yahoo Finance, companies have been testing different ways to talk about ESG. Some like Coca-Cola have erased ESG from corporate reports using terms like “Sustainability” or “Responsible Business” JPMorgan Chase CEO Jamie Dimon often mentions the importance of green finance and climate change without mentioning ESG. According to FactSet, there were 9 mentions of ESG on earnings calls from Q4 2023 compared to 156 mentions among S&P 500 companies during the fourth quarter of 2021. ESG is likely to be a critical component of sustainable business practices though its buzz effect has been muted.
3. Solar Power Led the Growth Charge: Today, solar power is the leading source of growth in the renewable energy sector. In 2024, solar power achieved a significant milestone, providing about 6% of the world's electricity—almost three times the amount of electrical energy consumed by America in 1954 (Economist, 2024).
The world currently stands at a 2-terawatt milestone for installed solar capacity (World Solar Council,2024) as solar energy has been growing ten-fold each decade. According to Time Magazine (2024), if solar continues its current five-year compound growth rate of 23%, it could meet the global energy demand at 2023 levels by 2046. Technological advancements, such as more efficient photovoltaic cells and innovative storage solutions, have significantly reduced the cost of solar energy. Current trends suggest that the all-in cost of the electricity produced by solar will be less than half the cost of the cheapest available today (EIA, 2024). This will increase adoption as it is a cleaner option for meeting the world's growing energy demands.
4. US Nuclear Energy’s Revival: Once in the “doghouse”, nuclear power is making a comeback in the U.S. after years of setbacks. Big tech is the driving force poising nuclear energy to be a key component of the global energy mix. Advances in nuclear technology, including safer and more efficient reactors, have alleviated some public concerns. This revival is seen as essential for achieving long-term climate goals and ensuring energy security.
Tech giants like Microsoft, Amazon, Oracle, and Google are competing to take the lead in the AI revolution, making data centers and the electricity needed to power them a prime commodity. Goldman Sachs forecasts that data centers will consume 8% of total U.S. electricity demand by 2030, compared with 3% currently. Energy from wind and solar is viewed as limited given the need for reliable 24-hour electricity. These companies have penned deals to generate more nuclear power. Microsoft struck a 20-year agreement with Constellation Energy to restart a reactor at Three Mile Island in Pennsylvania, the site of the most serious nuclear meltdown in U.S. history in 1979. The Palisades nuclear plant in Covert Township, Michigan, has also closed a US government $1.5 billion loan to restart operations in 2025. Palisades would be the first reactor to restart in U.S. history. $7 billion from venture capital has gone into nuclear fusion alone (Yergin, 2024).
5.Japan Reversed Course on Nuclear Energy: Like the US, several countries have announced new nuclear projects and investments, recognizing nuclear power's potential to provide a stable and low-carbon energy supply. In a significant policy shift, Japan decided to maximize the use of nuclear power to meet its growing energy demands and decarbonization targets. This reversal comes after years of phasing out nuclear energy following the Fukushima Daiichi disaster in 2011. The government has unveiled a draft of its “GX (Green Transformation) 2040 Vision,” a strategy to achieve a decarbonized society over the next 15 years. The new energy policy aims to increase nuclear energy's share of Japan's energy mix to 20% by 2040. This change is driven by the need to secure a stable, low-carbon energy supply amid rising electricity demand from AI and semiconductor industries. This strategic pivot underscores Japan's commitment to balancing energy security with its climate goals and attracting businesses—especially energy-intensive operations like data. The government will support decarbonization initiatives by expanding power grids, lowering electricity rates, and offering tax breaks and subsidies.
6.Challenging Year for Offshore Wind Energy: Companies began to retreat from offshore wind projects in 2024. Reuters (2024) reported canceled projects, broken turbines, and abandoned lease sales as the cause for missing targets set by governments in the U.S. and Europe. The root cause is soaring costs, rising interest rates, project delays, and limited supply chain investment restricting installations. Oil major Shell PLC made headlines this year for its plans to slow new investments in offshore wind. Shell sold its 50% stake in the planned 2.4-GW South Coast Wind Energy Project off Massachusetts and divested a 1.5-GW development in South Korea, adding to prior offshore wind exits in Ireland and France.
It is also reportedly looking to exit up to 5 GW of wind development rights in Scottish waters. BP PLC has joined in reportedly intending to sell a minority stake in its offshore wind business, while Equinor ASA recently cited offshore wind's downturn as a key driver behind its decision to cut 20% of the staff in its renewables business (S&P Global, 2024). These events support the sentiment that Big Oil is withdrawing from previous renewable investment commitments (New York Times, 2024). Oil and gas production and trading are reaping high returns whilst renewables are slim. These moves divestments have sparked concerns about the industry's long-term commitment to sustainability and the potential setbacks in global efforts to combat climate change.
7.Biden Administration Paused LNG Exports: Liquefied Natural Gas (LNG) exports faced significant challenges in 2024 due to geopolitical tensions and supply chain disruptions. Key exporting countries experienced delays and hampering of their LNG shipments, leading to volatility in global energy markets. This disruption highlighted the vulnerabilities in the LNG supply chain and underscored the need for diversified energy sources and more resilient infrastructure to ensure stable energy supplies.
These concerns were exacerbated when the Biden-Harris Administration paused new LNG projects as a temporary measure pending decisions on exports of LNG to non-FTA countries until the Department of Energy could update the underlying analyses for authorizations. The U.S. is the number one exporter of LNG worldwide, with U.S. LNG exports expected to double by the end of this decade. However, there have been concerns that despite gas producing around 50% lower emissions than coal when combusted, climate scientists have raised questions about how much methane is leaked along the LNG value chain and what this means for the emissions footprint of LNG around the world. Some argued that increasing LNG production was at odds with Biden’s policy ambitions to reduce greenhouse gas emissions domestically and globally. These policy actions are likely to be revisited under the new Trump regime.
8.Ukraine Received Its First US LNG Cargo: In a critical moment for Ukraine's energy security, the country received its first shipment of U.S. liquefied natural gas (LNG) on December 27, 2024 (BBC, 2024). The cargo, delivered via the Revithoussa LNG terminal in Greece, marks a strategic step in reducing Ukraine's dependence on Russian gas. This shipment, consisting of approximately 100 million cubic meters of natural gas, was facilitated by Ukraine's largest private energy company, DTEK, in partnership with U.S. firm Venture Global. “The arrival of this LNG cargo is a clear signal of DTEK’s determination to play its part in strengthening Ukraine and Europe’s energy security,” said Maxim Timchenko, chief executive of DTEK.
“Cargoes like this are not only providing the region with a flexible and secure source of power but are further eroding Russia’s influence over our energy system” Despite ongoing challenges from the war, this achievement underscores Ukraine's resilience and commitment to diversifying its energy sources. In recent weeks, the Russian government has signaled its intention not to renew the existing gas contract. The arrival of the LNG coincided with Russia stepping up attacks on Ukraine’s energy system. The latest attack came on Christmas Day, leaving more than half a million people without heating, water, and electricity (Financial Times, 2024).
9. OPEC's Grip Weakened: The Organization of the Petroleum Exporting Countries (OPEC) saw its influence wane in 2024, highlighted by Angola's decision to leave the organization in January 2024. Angola's exit reflects broader challenges facing OPEC, including internal disagreements and the shifting dynamics of global oil markets. It signals a potential restructuring of the global oil industry and raises questions about OPEC's future role in managing oil supply and prices. Saudi Arabia had a longstanding powerful position within OPEC, leveraging this to exert geopolitical power over countries like the US. However, the kingdom is struggling to execute its plan to keep prices elevated.
Within the cartel, there is conflict over maximizing short-term profits by supplying more versus cutting supply to keep prices elevated whilst reducing competition from US shale drillers. It is now operating in a world where the US, Brazil, Canada, Argentina, and Guyana are top crude producers (Bloomberg suggests a 36% growth projection) with Chinese demand slowing. Members are losing market share by postponing production increases and sustaining budget deficits. Non-OPEC countries will account for 70% of market share in 2025. Bank of America expects Brent crude to average $61 per barrel through 2025, indicating a 17% decline from current levels. The Saudis waged a price war in 2014 and 2020 but ultimately failed. Now they are making miscalculations on global supply-demand dynamics whilst alienating their peers. These missteps continue to tarnish their credibility.
10. Energy Sector Continues to Wrangle with Climate Litigation: In December 2024, New York announced plans to impose a $75 billion fine on fossil fuel companies for their contributions to climate change and environmental damage. This move is part of the state's aggressive strategy to hold polluters accountable and fund climate mitigation and adaptation efforts. The fine is expected to increase pressure on fossil fuel companies to adopt more sustainable practices. It is also intended to shift some of the recovery and adaptation costs of climate change from individual taxpayers to oil, gas, and coal companies that the law says are liable. New York became the second state to pass such a law after Vermont passed its own version this summer.
Another litigation matter of note was the appeal Shell won against a court ruling related to its carbon emissions. A Dutch court dismissed a landmark climate ruling against Shell after the oil giant was ordered to drastically reduce its global carbon emissions back in 2021. In May 2021, The Hague district court ruled that Shell must reduce its greenhouse gas emissions by 45% from 2019 levels by 2030. It was the first time in history that a company was found to have been legally obliged to align its policies with the Paris Agreement. The case had significant implications for corporate accountability and environmental regulations. The ruling was regarded as a landmark moment in the battle and sparked a wave of lawsuits against other fossil fuel companies. The reversal now underscores the challenges of the effectiveness of legal frameworks in holding companies accountable for their environmental impact and the need for stronger regulatory measures to ensure corporate responsibility.
As we move into 2025, the energy sector stands at a crossroads, where innovation must meet geopolitical realities and climate imperatives. While renewable energy sources like solar continue their exponential growth, challenges such as offshore wind setbacks and climate litigation underscore the complexities of the energy transition. Collaboration, resilience, and bold decision-making will be crucial as governments and businesses adapt to these shifting dynamics. Emerging technologies like AI and nuclear energy advancements promise to reshape the global energy mix, but they also demand careful stewardship. Looking ahead, the challenge is achieving resilience while securing energy access, economic growth, and environmental integrity for future generations.
References
United Nations Framework Convention on Climate Change (UNFCCC). (2024). COP 29 Agreements on Article 6 and Carbon Markets. Available at: https://unfccc.int
International Emissions Trading Association (IETA). (2024). Unlocking Carbon Markets: Article 6 Progress at COP 29. Available at: https://www.ieta.org
FactSet. (2024). Decline in ESG Mentions Among S&P 500 Earnings Calls. Available at: https://www.factset.com
Financial Times. (2024). The Quiet Retreat: ESG Rebranding Trends in Corporate America. Available at: https://www.ft.com
International Renewable Energy Agency (IRENA). (2024). Global Solar Power Statistics 2024. Available at: https://www.irena.org
National Renewable Energy Laboratory (NREL). (2024). Advances in Photovoltaic Technology. Available at: https://www.nrel.gov
U.S. Department of Energy (DOE). (2024). Nuclear Energy Revival: U.S. Trends and Investments in 2024. Available at: https://www.energy.gov
Reuters. (2024). Japan's Green Transformation 2040 Vision and Nuclear Strategy. Available at: https://www.reuters.com
Global Wind Energy Council (GWEC). (2024). Offshore Wind in Crisis: 2024 Report. Available at: https://www.gwec.net
U.S. Environmental Protection Agency (EPA). (2024). Methane Emissions and LNG: A Policy Reevaluation. Available at: https://www.epa.gov
BBC News. (2024). Ukraine Diversifies Energy Supplies with First U.S. LNG Delivery. Available at: https://www.bbc.com
International Energy Agency (IEA). (2024). The Decline of OPEC: Energy Market Shifts in 2024. Available at: https://www.iea.org
Law360. (2024). Shell’s Legal Battles and New York’s Record Fine: Climate Litigation in Focus. Available at: https://www.law360.com