Renewable energy trends and developments support a cleaner future

In an increasingly hot world, the transition from fossil fuels to renewable energy is heating up. According to the International Energy Agency (IEA), global renewable power capacity is expanding faster than at any time in the past 30 years. The report predicts that by 2025, renewable energy will surpass coal and become the world’s leading power source. Wind power and solar power generation are expected to surpass nuclear power generation in 2025 and 2026, respectively. And by 2028, 68 countries will rely on renewable energy as their main source of electricity.

The acceleration of clean, renewable energy generation cannot come too soon for policymakers and advocates concerned about climate change caused by greenhouse gas emissions.

Policies that promote development

At the 2023 United Nations Climate Change Conference (COP28), governments set a target to triple global renewable power capacity by 2030. According to the IEA, this would ideally help advance decarbonization, mitigate climate change and achieve net-zero emissions.

To develop renewable energy technologies, governments are taking a variety of public policy measures. The European Union’s Green Deal industrial plan, India’s Production Linked Incentive (PLI), and the US Inflation Reduction Act (IRA) are all policies designed to further promote the integration of sustainable energy. China’s economic support policies have accelerated onshore wind and solar power projects, helping the country meet its 2030 national target several years ahead of schedule. (China accounts for nearly 60% of all new renewable energy capacity expected to come online by 2028, making it critical to the goal of tripling global renewable energy.) It also accounts for nearly 60% of all new renewable energy capacity expected to come online by 2028. ) Regulations for the initiative are evolving. The world is increasing demand for renewable energy from the private sector, which is encouraging further growth.

Renewable energy growth by type

Despite a wide range of policy measures, policy support often varies depending on the type of renewable energy in question. Let’s take a closer look at the different types of renewable energy resources and the trends emerging in each category.

solar power

According to the IEA, solar energy accounted for three-quarters of global renewable capacity additions in 2023. The other half is capacity growth from utility-scale power plants and consumer adoption of distributed PV systems (on-site solar power for homes and businesses).

Ongoing policy support from governments around the world remains a key driver of this growth. For example, some policymakers provide incentives for renewable generation by individuals and businesses through net metering programs that allow utility customers to send excess energy generated back to the utility for credits. Other incentives to encourage the production and use of solar power include power supply tariffs, tax credits, and auctions where solar power suppliers compete at energy market prices to win contracts.

The expansion of the solar PV supply chain is enabling the manufacturing needed to meet the demands of the growing industry. Increasing manufacturing capacity in the US, India, and EU is expected to help diversify the solar PV supply chain, but China continues to dominate the sector. (The country will have 95% of new solar technology manufacturing facilities by 2022.) And advances in solar power technology are producing lighter, cheaper, and more efficient solar panels, which will increase over time. We will continue to increase our power generation capacity accordingly.

According to the IEA’s Net Zero Emissions by 2050 scenario (NZE), if current growth rates are maintained through 2030, solar PV will be on track to meet annual generation capacity of approximately 8,300 terawatt hours (TWh) by the end of the decade. no see. Additionally, solar power is expected to become a dominant energy source for low-emission or green hydrogen production. Low-emission hydrogen (unlike hydrogen produced from fossil fuels) could potentially spur greater decarbonization efforts in a variety of businesses, from steel manufacturing to ammonia production, where hydrogen is used for industrial purposes.

wind power

As with solar power, public policy has been key to driving wind energy expansion, but growth prospects vary by region. China saw a 66% increase in wind power capacity in 2023 and plans to add more wind power capacity in the coming years. However, project development has progressed more slowly than initially expected in Europe and North America. Offshore wind projects were particularly vulnerable. By 2023, in the US and UK alone, developers have canceled offshore projects with a combined capacity of 15 gigawatts (GW).

Recent public policies can help support the industry during these difficult times. In 2023, the European Union published its wind power action plan, which includes measures to improve permits, auction procedures, access to financing and expand workforce training. In the same year, nine European countries announced plans to increase offshore wind power capacity to more than 120 GW by 2030 and more than 300 GW by 2050. Meanwhile, in the United States, the government is investing in the development of floating wind farms. It is expected that a 15GW floating wind power farm will be built in 2035.

For wind power to meet the IEA’s NZE targets, its compound annual growth rate must be at least 17% by 2030.

hydroelectric power

Hydropower currently produces more electricity (reaching 4,300 TWh in 2022) than all other clean energy sources combined, and will remain the largest source of electricity through 2030, according to the IEA. Despite small but steady growth and proven reliability, slowing development in Europe, China and Latin America is expected to reduce new hydropower capacity additions by 23% over the next decade.

Over the past two decades, the energy industry’s focus has shifted away from hydropower, and most countries have focused their policies and incentives on expanding solar and wind power. More than 100 countries currently offer policies to support wind and solar PV, while fewer than 30 countries currently offer policies to support new hydropower developments and retrofits of existing power plants.

To meet the NZE scenario, hydropower must grow at a rate of at least 4% per year.

biofuel

Biofuels expansion is underway globally, thanks to supportive government policies in emerging economies such as Brazil, India, and Indonesia. Demand in these countries is primarily driven by the transportation sector, while supply is enabled by the availability of biomass feedstock. Brazil is a leader in biofuel expansion, expected to account for 40% of growth by 2028.

In the European Union, the United States, Canada and Japan, biofuel expansion is more limited due to high costs and the growing popularity of electric vehicles. The main growth areas for biofuels in these countries are the renewable diesel and biojet fuel sectors. Overall, biofuels such as bioethanol and biodiesel, combined with electric vehicles (EVs), have the potential to offset the equivalent of 4 million barrels of oil by 2028. Despite these milestones, the IEA predicts that biofuel expansion will still fall short of the 2030 NZE. target.

Biogas: The growth of the biogas industry began in the 1990s, but policy support for natural gas alternatives has increased over the past two years. Currently, almost half of global biogas production comes from Europe, of which 20% comes from Germany alone.

Historically, biogas has been used in combined heat and power plants and power plants. However, recently governments have encouraged industrial and transportation uses of biomethane, which, as the name suggests, is biogas that contains significant concentrations of methane. With 13 countries implementing strong new policies to support biogas from 2022, the IEA expects biogas production growth to accelerate through 2028.

geothermal energy

Technological advancements are creating opportunities to bring geothermal energy to more places. For example, enhanced geothermal energy systems inject fluids underground into areas without naturally occurring hot water sources. The fluid is heated underground and then pumped to the surface to generate electricity. Various geothermal projects are planned or in progress around the world, including in North America, Europe, and Asia.

Despite these advances, geothermal energy advocates say policies are needed to tap untapped potential. The capital-intensive nature and financing costs of geothermal projects can be prohibitive. Developing economies of scale and continued technological advancements can help reduce costs, but the IEA currently predicts that only about 1% of renewable energy will be sourced from geothermal energy production by 2030.²³

Technology that supports evolving renewable energy

As more renewable energy is added to the energy system, technology will play a critical role in keeping energy supplies flowing while ensuring energy security and the stability of the power grid.

Renewable energy sources, especially wind and solar, are vulnerable to environmental conditions, so ensuring optimal production and distribution is critical to providing a stable and resilient power supply. Renewable energy forecasting is fast becoming an important tool in the energy transition. For example, solutions such as the IBM Renewables Forecasting Platform, part of the IBM Environmental Intelligence Suite, can provide day-ahead wind and solar forecasts with 92% accuracy.

Better storage can also help make power systems more resilient. Solar, wind, and hydropower all require energy storage systems (ESS) to provide a consistent energy supply. As grid-scale battery technology advances, utility companies will be able to store electricity for long periods of time to better manage loads during low or unproductive periods. For example, flow batteries are a low-cost, scalable form of long-term grid-scale energy storage currently under development.

From batteries to solar arrays, effective asset management is a critical component in supporting the clean energy transition. Intelligent asset management and predictive maintenance can monitor asset health and extend its lifespan. For example, the New York Power Authority (NYPA) is using IBM Maximo® Application Suite to streamline asset management. The goal is to digitize the state’s energy infrastructure and transform it into a clean, reliable, resilient and affordable system over the next decade.

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