renewable energy production research update

Renewable Energy

Renewable energy sources are growing quickly and will play a vital role in tackling climate change..

Since the Industrial Revolution, the energy mix of most countries across the world has become dominated by fossil fuels. This has major implications for the global climate, as well as for human health. Three-quarters of global greenhouse gas emissions result from the burning of fossil fuels for energy. Fossil fuels are responsible for large amounts of local air pollution – a health problem that leads to at least 5 million premature deaths each year.

To reduce CO 2 emissions and local air pollution, the world needs to rapidly shift towards low-carbon sources of energy – nuclear and renewable technologies.

Renewable energy will play a key role in decarbonizing our energy systems in the coming decades. But how rapidly is our production of renewable energy changing? What technologies look most promising in transforming our energy mix?

In this article we look at the data on renewable energy technologies across the world; what share of energy they account for today, and how quickly this is changing.

Renewable energy generation

How much of our primary energy comes from renewables.

We often hear about the rapid growth of renewable technologies in media reports. But how much of an impact has this growth had on our energy systems?

In this interactive chart, we see the share of primary energy consumption that came from renewable technologies – the combination of hydropower, solar, wind, geothermal, wave, tidal, and modern biofuels. Traditional biomass – which can be an important energy source in lower-income settings is not included.

Note that this data is based on primary energy calculated by the 'substitution method' which attempts to correct for the inefficiencies in fossil fuel production. It does this by converting non-fossil fuel sources to their 'input equivalents': the amount of primary energy that would be required to produce the same amount of energy if it came from fossil fuels.

Approximately one-seventh of the world's primary energy is now sourced from renewable technologies.

Note that this is based on renewable energy's share in the energy mix. Energy consumption represents the sum of electricity, transport, and heating. We look at the electricity mix later in this article.

Breakdown of renewables in the energy mix

In the section above we looked at what share renewable technologies collectively accounted for in the energy mix.

In the charts shown here, we look at the breakdown of renewable technologies by their components – hydropower, solar, wind, and others.

The first chart shows this as a stacked area chart, which allows us to more readily see the breakdown of the renewable mix and the relative contribution of each. The second chart is shown as a line chart, allowing us to see more clearly how each source is changing over time.

Globally we see that hydropower is by far the largest modern renewable source. However, we also see wind and solar power both growing rapidly.

Renewables in the electricity mix

How much of our electricity comes from renewables.

In the sections above we looked at the role of renewables in the total energy mix . This includes not only electricity but also transport and heating. Electricity forms only one component of energy consumption.

Since transport and heating tend to be harder to decarbonize – they are more reliant on oil and gas – renewables tend to have a higher share in the electricity mix versus the total energy mix.

This interactive chart shows the share of electricity that comes from renewable technologies.

Globally, almost one-third of our electricity comes from renewables.

Hydropower generation

Hydroelectric power has been one of our oldest and largest sources of low-carbon energy. Hydroelectric generation at scale dates back more than a century, and is still our largest renewable source – excluding traditional biomass, it still accounts for approximately half of renewable generation.

However, the scale of hydroelectric power generation varies significantly across the world. This interactive chart shows its contribution by country.

Share of primary energy that comes from hydropower

This interactive chart shows the share of primary energy that comes from hydropower.

Share of electricity that comes from hydropower

This interactive chart shows the share of electricity that comes from hydropower.

Wind energy

Wind energy generation.

This interactive chart shows the amount of energy generated from wind each year. This includes both onshore and offshore wind farms.

Wind generation at scale – compared to hydropower, for example – is a relatively modern renewable energy source but is growing quickly in many countries across the world.

Installed wind capacity

The previous section looked at the energy output from wind farms across the world. Energy output is a function of power (installed capacity) multiplied by the time of generation.

Energy generation is therefore a function of how much wind capacity is installed. This interactive chart shows installed wind capacity – including both onshore and offshore – across the world.

Share of primary energy that comes from wind

This interactive chart shows the share of primary energy that comes from wind.

Share of electricity that comes from wind

This interactive chart shows the share of electricity that comes from wind.

Solar energy

Solar energy generation.

This interactive chart shows the amount of energy generated from solar power each year.

Solar generation at scale – compared to hydropower, for example – is a relatively modern renewable energy source but is growing quickly in many countries across the world.

Installed solar capacity

The previous section looked at the energy output from solar across the world. Energy output is a function of power (installed capacity) multiplied by the time of generation.

Energy generation is therefore a function of how much solar capacity is installed. This interactive chart shows installed solar capacity across the world.

Share of primary energy that comes from solar

This interactive chart shows the share of primary energy that comes from solar power.

Share of electricity that comes from solar

This interactive chart shows the share of electricity that comes from solar power.

Biofuel production

Traditional biomass – the burning of charcoal, organic wastes, and crop residues – was an important energy source for a long period of human history. It remains an important source in lower-income settings today. However, high-quality estimates of energy consumption from these sources are difficult to find. The Energy Institute Statistical Review of World Energy – our main data source on energy – only publishes data on commercially traded energy, so traditional biomass is not included.

However, modern biofuels are included in this energy data. Bioethanol and biodiesel – fuel made from crops such as corn, sugarcane, hemp, and cassava – are now a key transport fuel in many countries.

This interactive chart shows modern biofuel production across the world.

Installed geothermal capacity

This interactive chart shows the installed capacity of geothermal energy across the world.

Cite this work

Our articles and data visualizations rely on work from many different people and organizations. When citing this article, please also cite the underlying data sources. This article can be cited as:

BibTeX citation

Reuse this work freely

All visualizations, data, and code produced by Our World in Data are completely open access under the Creative Commons BY license . You have the permission to use, distribute, and reproduce these in any medium, provided the source and authors are credited.

The data produced by third parties and made available by Our World in Data is subject to the license terms from the original third-party authors. We will always indicate the original source of the data in our documentation, so you should always check the license of any such third-party data before use and redistribution.

All of our charts can be embedded in any site.

Our World in Data is free and accessible for everyone.

Help us do this work by making a donation.

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

• View all journals

Renewable energy articles from across Nature Portfolio

Renewable energy is energy that comes from sources that are readily replenishable on short-timescales. Examples of these are solar radiation, wind, and biomass.

More ions in, less power out

Ion migration is generally understood to detrimentally impact the operational stability of perovskite solar cells, yet the underlying mechanism is not fully clear. By decoupling ion migration from other effects, research now shows that electric field screening induced by mobile ions is a dominant contributor to efficiency loss during solar cell ageing.

• Davide Moia

Wind power and solar photovoltaics found to have higher energy returns than fossil fuels

A key issue in net energy analysis is the omission of the effects of end-use efficiencies on the energy returns of technologies. Now, an analysis shows that these effects strongly favour the energy returns of wind power and solar photovoltaics, which are found to be higher than those of fossil fuels.

Optimizing all links in the chain

Large scale cellulosic biofuel production involves complex interactions between biomass supply, biorefineries and the networks that connect them. New fine-scale spatially explicit modelling seeks to better understand how these components could best integrate with carbon capture to minimize greenhouse gas emissions and optimize biofuel supply chains.

• Sabrina Spatari

Related Subjects

• Geothermal energy
• Hydroelectricity
• Hydrogen energy
• Solar energy
• Wind energy

Latest Research and Reviews

Ethylene production via photocatalytic dehydrogenation of ethane using LaMn 1 − x Cu x O 3

Light-driven approaches could lower the carbon footprint of chemical production. Here the authors use the perovskite oxide LaMn 1− x Cu x O 3 as a photocatalyst to convert ethane to ethylene and hydrogen.

• Guanshu Zhao
• Geoffrey A. Ozin

Decarbonization potential of floating solar photovoltaics on lakes worldwide

Floating photovoltaics represent a promising alternative to land-based solar panels. A large-scale analysis, comprising 1 million water bodies worldwide, shows that floating photovoltaics could contribute 16%, on average, of the electricity demands of some countries.

• R. Iestyn Woolway
• Alona Armstrong

Study on coupled mode flutter parameters of large wind turbine blades

• Yong Zhuang
• Guangming Yuan

Self-assembled network polymer electrolyte membranes for application in fuel cells at 250 °C

High-temperature operation of polymer electrolyte membrane fuel cells has some advantages but is also challenging due to the instability of proton transport above 160 °C. Here the authors report a polymer electrolyte membrane comprising well-dispersed and interconnected cerium hydrogen phosphate particles within a polymer matrix that performs well in a fuel cell at up to 250 °C.

• Seungju Lee
• Jong Geun Seong
• So Young Lee

Rethinking energy planning to mitigate the impacts of African hydropower

Meeting future energy demands in Africa will require expanded hydropower capacity, but the dams’ impacts on rivers, their emissions and alternative energy options call for careful planning. This study performs multi-objective energy system modelling for more sustainable dam expansion from the present to 2050.

• Angelo Carlino
• Rafael Schmitt
• Andrea Castelletti

Recycling of silicon solar panels through a salt-etching approach

The booming production of silicon solar panels, a core technology in the energy transition, calls for proper end-of-life management. Here the authors propose a salt-etching approach that enables efficient recycling of critical materials from end-of-life silicon solar panels, without the use of toxic reagents.

• Shuaibo Gao

News and Comment

Preserving the stoichiometry.

• Giulia Tregnago

Anchoring nanoparticles

• James Gallagher

Old electric-vehicle batteries can find new purpose — on the grid

An algorithm can monitor the health of retired vehicle batteries used to store surplus power fed into the electrical grid.

Quick links

• Explore articles by subject
• Guide to authors
• Editorial policies

You are using an outdated browser. Please upgrade your browser to improve your experience.

Publications

Renewable Energy Market Update

Outlook for 2022 and 2023.

Available from May 31, 2022

• Read online
• Download PDF
• Get citation details

• Ways to Give
• Contact an Expert
• Explore WRI Perspectives

Filter Your Site Experience by Topic

Applying the filters below will filter all articles, data, insights and projects by the topic area you select.

• All Topics Remove filter
• Climate filter site by Climate
• Cities filter site by Cities
• Energy filter site by Energy
• Food filter site by Food
• Forests filter site by Forests
• Freshwater filter site by Freshwater
• Ocean filter site by Ocean
• Business filter site by Business
• Economics filter site by Economics
• Finance filter site by Finance
• Equity & Governance filter site by Equity & Governance

Search WRI.org

Not sure where to find something? Search all of the site's content.

State of the US Clean Energy Transition: Recent Progress, and What Comes Next

• Clean Energy
• renewable energy
• electric grid
• electric mobility
• Electric Mobility
• U.S. Climate Policy-Electric Vehicles
• U.S. Climate Policy-Clean Power

The U.S. clean energy sector received massive legislative wins in recent years, particularly with the Inflation Reduction Act, Bipartisan Infrastructure Law and CHIPs Act. But are these laws and the investments that come with them resulting in enough carbon-free power?

While we’ve seen a good deal of momentum over the last year — such as record-breaking EV sales, new energy capacity dominated by renewables, and promising policy movements on key issues such as transmission — significant obstacles remain. Rising interest rates and project costs, permitting and siting challenges , and persistent supply chain issues are holding clean power development back at a time when it needs to be surging ahead.

Here, we take stock of recent clean energy progress and what’s needed to push it forward in the U.S.:

First, the Good News: Recent Progress on US Clean Energy Development

In many ways, 2023 was a record-breaking year for clean energy deployment in the United States, including the escalating installation rate of solar and energy storage, growing EV sales and the number of planned domestic manufacturing facilities.

Clean energy continues to be the dominant form of new electricity generation in the U.S., with solar reaching record levels in 2023.

A record 31 gigawatts (GW) of solar energy capacity was installed in the U.S. in 2023, a roughly 55% increase from 2022 installations and substantially more than the previous record in 2021. Even with significant project delays due to supply chain issues and other factors, solar was the fastest-growing power source in the U.S, representing half of all new utility-scale generating capacity through Q3 of 2023. Installed solar capacity in the U.S. now totals 161 GW, enough to provide about 5% of the nation’s electricity, according to the Solar Energy Industries Association.

Battery storage also grew substantially in 2023, with installations through Q3 exceeding those of all of 2022 . Strong growth is expected to continue, with a projected doubling of capacity in 2024.

Wind had more modest growth in 2023 ( about 8 GW ), lagging behind 2022 installations. Total installed capacity reached 147 GW by Q3 of 2023, representing about 11% of electricity generation. Projections call for an uptick of new wind projects this year, totaling about 17 GW in 2024.

Together, renewables combined with energy storage dominated new utility-scale generation sources, representing more than three-quarters of total new capacity added (see graphic below). Renewables, including large hydropower, represented about 25% of electricity generated in the United States in the first half of 2023.

Yet despite record growth, renewable energy installations need to ramp up even faster. Analyses of achieving 100% carbon-free electricity by 2035, what’s needed to achieve U.S. greenhouse gas reduction targets, indicate that annual installation rates of renewables in coming years need to nearly double the rates seen in 2023.

Electric vehicle (EV) sales set new records in 2023.

Despite news reports highlighting the slowing of EV sales, a record 1.2 million EVs were sold in the U.S. in 2023, representing 7.6% of total vehicle sales, up from 5.9% in 2022. Sales continued to be strong through year end, with the fourth quarter setting records for both the number and share of EVs sold (317,000 EVs and 8.1% of total sales, respectively) – with EV sales up 40% from Q4 of 2022. Reports of the “slowdown” reflect a slowing in the rate of increase; sales remain robust and at record-setting levels.

Progress, albeit slower than hoped, is also being made on EV charging infrastructure, supported by $7.5 billion in funds under the Bipartisan Infrastructure Law. The National Electric Vehicle Infrastructure (NEVI) program, created under the Bipartisan Infrastructure Law and designed to support new EV charging corridors and fast-charging stations, had its first charging stations installed in Ohio in late 2023, with additional stations set to open in New York, Pennsylvania, Vermont and Maine in the coming months.

Transmission and grid upgrades are progressing, but slowly.

Additional transmission capacity and grid upgrades are essential to enabling the clean energy transition and ensuring future grid reliability. While not at the scale needed, 2023 saw continued activity on transmission , as Congress actively debated permitting and policy reforms. The Federal Energy Regulatory Commission (FERC) also continued action on its proposed rule to reform planning processes and finalized its interconnection rule to speed grid access. The Department of Energy (DOE) took steps to implement provisions in the Bipartisan Infrastructure Law and Inflation Reduction Act, designating lines in the national interest that can be expedited by federal action. Federal agencies also launched incentive programs for transmission.

Ten transmission lines, which have been in process for years, have begun construction since 2021. If completed, they are expected to collectively support the addition of 20GW of new power generation to the grid, but they still face hurdles .

Another 26 high-capacity transmission projects are underway across the U.S., although their ability to be completed is uncertain and pending policy reforms. In late 2023, the Midcontinent Independent System Operator (MISO), the transmission planning organization covering the area from Louisiana to Manitoba, selected the first competitively bid project to move forward as part of an initial $10.3 billion investment approved under MISO’s Long Range Transmission Planning process.

The U.S. is setting records for planned domestic clean energy manufacturing.

The Inflation Reduction Act stimulated an unprecedented slate of planned domestic clean energy manufacturing facilities, reversing the trend of years of declining investment s. According to American Clean Power, 113 manufacturing facilities or expansions have been announced since August 2022, totaling $421 billion of investment in domestic, utility-scale clean energy production, as of early 2024.

States continue to pass ambitious climate and clean energy policies.

Minnesota adopted a 100% clean electricity standard at the beginning of 2023. Michigan followed suit at the end of the year and joined states such as California and New York in passing ambitious permitting reforms intended to make it easier to build clean energy and transmission. Seven states adopted California’s tailpipe-emissions standards, which require automakers to increase the share of zero-emission vehicles sold over time. New York adopted a ban on fossil fuel use in most new buildings, beginning in 2026, while Washington set limits on gas appliances in new construction. State actions are critical to ensuring a successful clean energy transition, as federal actions alone are insufficient.

Major Obstacles to Clean Energy Development Remain

A number of headwinds also emerged in recent years that have reduced the rate of clean energy deployment, including supply chain issues, interest rate increases and other financial challenges, and slow progress on transmission.

Supply chain challenges persist in the U.S. and globally, delaying renewables projects and slowing growth rates.

Many projects slated to come online early in 2023 were pushed back in part because of supply chain challenges . Shortages of transformers needed for connecting clean energy to the grid remain a particular obstacle. The delivery time for transformers and other associated equipment has grown from 50 weeks to 150 weeks, as of the end of 2023, according to one developer. Wood Mackenzie estimated that only about 20% of U.S. transformer demand can be met by domestic supply — and that lead times for large transformers, substation power and generator step-up transformers now range from 80 to 210 weeks.

However, solar supply chain challenges eased and global solar module prices fell over the course of 2023, enabling many delayed projects to be completed. But starting in June 2024, President Biden’s two-year pause on solar tariffs will expire; solar modules subject to the duties will become more expensive. Earlier, the Commerce Department determined that solar modules using Chinese-sourced materials imported from four Southeast Asian countries (Vietnam, Malaysia, Thailand and Cambodia), which have been the source of three-quarters of U.S. module imports, will be subject to trade duties.

Interest rate increases have raised costs, resulting in clean energy contracts being renegotiated, delayed or cancelled.

The rapid rise in interest rates, resulting from actions by the Federal Reserve, substantially increased the cost of capital for all energy projects. Clean energy projects are more sensitive to interest rate increases than some other forms of power generation because they require significant upfront capital. Their economic advantage is in the lack of fuel costs and price consistency over time.

Higher project costs, supply chain challenges and other factors have affected deal flow for renewables and the price of power purchase agreements (PPAs), or long-term contracts between generators and purchasers. Large energy users like Amazon, Meta and Google have been major drivers for renewable projects, but prices and renegotiations are affecting these markets. In the first half of 2023, corporate purchases of clean energy landed at 6GW , compared to nearly 17 GW for all of 2022. As of the third quarter of 2023, solar PPA prices had risen 21% year over year, wind PPA prices were 16% higher, and blended PPA prices rose 18%. There were signs of stabilization in PPA prices in the latter half of 2023, but prices are still substantially higher than they were previously.

Some companies have struggled financially, and clean energy stocks are down.

Offshore wind challenges have been particularly acute. In 2023, companies announced delays and project cancellations for about half of the U.S. offshore wind pipeline , due to rising costs and supply chain challenges. While the New York South Fork project began operating in 2023 and is slated to become the nation’s largest offshore wind project when additional turbines are completed in 2024 ( 132 MW, compared to 30MW in Block Island and 12MW near Virginia) developers are cancelling 5.5GW of offshore wind contracts planned for New Jersey, Connecticut and Massachusetts and renegotiating contracts for another 6.5GW of projects. BNEF now estimates about 14.5GW of offshore wind could come online in the U.S. by 2030, compared to the Biden administration’s goal of 30GW.

The buildout of the transmission system is not happening at the pace needed—and interregional transmission is particularly lagging.

Lack of transmission is a critical limiting factor for the clean energy transition and poses a threat to reliability in some areas, particularly in the face of increasingly common extreme weather events. Interregional transmission lines that cross state borders continue to face hurdles in gaining approvals from multiple states and determining how to allocate costs among beneficiaries. Lack of sufficient planning processes and methods to assess interregional benefits are the main challenges. Together, the 36 major transmission projects that could begin construction in the near-term represent only about 10% of the transmission investment needed in the U.S. And new lines can take 10 years to build, although technologies to increase the capacity of existing lines can be implemented more quickly. Several analyses (see here , here and here ) suggest that transmission capacity needs to double or triple to meet grid needs and achieve President Biden’s 2035 clean energy goals, and interregional transfer capacity needs to quadruple.

What to Watch in 2024 and Beyond: 5 Questions About the Future of US Clean Energy Development

Perhaps the biggest factor influencing the future of US clean energy development will be results of the 2024 presidential election. But even before voters take to the polls, answers to five questions will help determine the pace of clean energy development moving forward.

1) Is electricity demand outpacing the country’s ability to bring on clean energy generation?

Growth in demand of electricity for data centers, artificial intelligence, crypto mining, manufacturing and EVs is creating serious concerns about generation’s ability to keep up. Recently, grid planners have nearly doubled forecasts of electricity demand growth over the next five years. In a recent study, the North American Electric Reliability Corporation noted that these demand drivers are growing faster than the ability to add transmission and new electricity generation. Managing this growth will be critical for achieving a transition to clean energy; the potential imbalance between supply and demand requires increased attention from regulators, utilities, large energy users and grid operators.

2) Will federal agencies uphold strict standards as they use regulatory power to further reduce emissions?

Federal agencies have been hard at work crafting regulations to fulfill legal requirements and reduce emissions. The EPA’s proposal to regulate greenhouse gas emissions from fossil fuel-fired electricity faced significant pushback from power suppliers and regional grid operators, who said the proposal could impact reliability and relies on unavailable technology. Meanwhile, the U.S. Treasury Department recently proposed guidance on the 45V Hydrogen Production Tax Credit , which sets strict standards for obtaining tax credits for hydrogen production to encourage clean production pathways. The stringency of the final rules for both regulations is critical to putting the power sector on the path to net-zero emissions.

However, the regulatory power of agencies will be weakened if the Supreme Court overturns the Chevron doctrine , which requires judges to defer to federal agencies in the case of ambiguous laws as long as the agency’s interpretation is reasonable. If this were to happen, agency rulemaking of all types, including power sector rules, would be subject to more judicial scrutiny, and fewer regulations may survive.

3) How quickly will new federal funds, tax credits and the potential fall in interest rates boost new projects?

Much of the funding from the Inflation Reduction Act’s $27 billion Greenhouse Gas Reduction Fund is expected to begin flowing in 2024, mobilizing financing to stimulate new projects. The timing and pace of disbursement, as well as the pace of interest rate cuts expected in 2024, will determine the magnitude of the boost to clean energy.

The Inflation Reduction Act’s clean energy tax credits are already rolling out and will incentivize new clean energy projects, but developers and other stakeholders are still awaiting final guidance from the administration on how the incentives will work. And new funding and financing mechanisms often have a learning curve. For example, the Inflation Reduction Act’s “ direct pay ” provision, which allows tax-exempt entities such as state and city governments to claim clean energy tax credits, is a new process for organizations that don’t typically file taxes. Some are already moving forward, such as San Antonio, but others will need to get more comfortable with the process to take full advantage of it. Similarly, implementation of the domestic content tax credit bonus is complex. While the industry awaits final guidance, it is unclear if incentives will be widely utilized.

4) Will progress on transmission reforms be sufficient to enable new lines to advance?

While Congressional action on permitting reform is uncertain , several other actions by FERC and DOE will be critical for advancing regional transmission. FERC has not moved on an important transmission planning rule since releasing a Notice of Proposed Rulemaking ( NOPR ) on the subject in April 2022. But with the Commission’s composition having changed at the beginning of 2024, there is some hope that a rule is forthcoming to streamline and modernize the U.S. transmission planning process. FERC Chairman Phillips has indicated that finalizing the planning rule is a priority . A strong rule would address cost allocation processes, a 20-year planning horizon, and defining a comprehensive set of benefits categories that should be considered when assessing lines and allocating costs.

Furthermore, actions by DOE to implement Inflation Reduction Act and Bipartisan Infrastructure Law provisions could stimulate transmission investment and upgrades. Under the Transmission Facilitation Program , DOE is authorized to borrow up to $2.5 billion to get the development of new, large-scale, interregional transmission lines across the finish line. After initial selections in October 2023, DOE is on track to finalize capacity contract negotiations with a commitment of up to $1.3 billion for three transmission projects across six states, aimed at adding an additional 3.5GW of grid capacity.

Also, $14 billion in funding is slated to be allocated to states, tribes and utilities for grid-enhancing technologies and other upgrades. DOE has also finalized the designation process for National Interest Electric Transmission Corridors (NIETCs), which authorizes the Secretary of Energy to designate geographic areas as NIETCs if she finds that new transmission would advance national interests, such as increased reliability and reduced costs. Designation can unlock federal financing for lines and enable FERC to issue permits for siting in some cases.

5) Will interconnection queue reforms address backlogs?

The ability to get projects approved for interconnection to the grid has become a major barrier to growth in clean energy generation. FERC took a major step towards tackling interconnection queues by issuing Order No. 2023 , which requires transmission providers to, among other things, transition from a “first-come, first-served" to a “first-ready, first-served" cluster study process. These reforms will improve interconnection wait times, which are primarily impacting renewables , the vast majority of projects stuck in queues. But there is an open question of how much the reforms will improve interconnection wait times and the scope of additional reforms needed.

Speeding Up the US Clean Energy Transition

While the rate of progress overall is currently insufficient, as we look ahead to 2024 and beyond, many strategies and tools are available to achieve higher rates of clean energy deployment. Policymakers, regulators, developers and manufacturers must double down on their efforts to address the key challenges slowing the clean energy transition. The opportunities are here — now it’s time to seize them.

Relevant Work

The us set a record for renewables in 2020, but more is needed, after inflation reduction act: 5 ways to hit the us emissions goal, us clean energy goals hinge on faster permitting, tracking progress: climate action under the biden administration, how you can help.

WRI relies on the generosity of donors like you to turn research into action. You can support our work by making a gift today or exploring other ways to give.

Stay Informed

World Resources Institute 10 G Street NE Suite 800 Washington DC 20002 +1 (202) 729-7600

© 2024 World Resources Institute

Envision a world where everyone can enjoy clean air, walkable cities, vibrant landscapes, nutritious food and affordable energy.

Renewable & Alternative Fuels

• Alternative transportation fuels

Major Topics

• Most popular
• Alternative Fuels
• Consumption/demand
• Environment
• Forecasts/projections
• Production/supply
• All reports
• Alphabetical

Current Issues & Trends

U.s. biodiesel imports have doubled since 2022 due to low prices in europe.

tags:  Europe biofuels exports/imports international

U.S. electric power sector reported fewer delays for new solar capacity projects in 2023

tags:  capacity electricity generation solar

Wind generation declined in 2023 for the first time since the 1990s

tags:  electricity generation wind

U.S. hydropower generation expected to increase by 6% in 2024 following last year’s lows

tags:  Alabama California New York Northwest Tennessee electricity + generation hydroelectric map states

Natural gas filled in most of the drop in solar generation in Texas during April 8 eclipse

tags:  Texas electricity generation natural gas solar states

April 8 solar eclipse will briefly limit solar electricity generation across the country

tags:  electricity generation map solar

EIA now publishes interregional renewable diesel rail shipment data

tags:  California Oregon Washington biofuels diesel liquid fuels + map rail states

Western U.S. hydropower generation fell to a 22-year low last year

tags:  Arizona California Oregon Washington electricity generation + hydroelectric states

Biomass-based diesel and ethanol compliance credit prices decline 45% from start of year

tags:  RIN biofuels diesel ethanol prices

Solar and battery storage to make up 81% of new U.S. electric-generating capacity in 2024

tags:  capacity electricity generation map natural gas nuclear + solar storage wind

Solar and wind to lead growth of U.S. power generation for the next two years

tags:  STEO electricity forecasts/projections generation solar wind

We expect solar will supply almost all growth in U.S. electricity generation through 2025

tags:  STEO electricity forecasts/projections generation solar

New Renewable Fuel Standard volume targets facilitate renewable natural gas production

tags:  RFS natural gas production/supply

EIA expects U.S. annual solar electricity generation to surpass hydropower in 2024

tags:  STEO electricity forecasts/projections generation hydroelectric solar

Solar and wind power curtailments are rising in California

tags:  California electricity generation solar states wind

Market prices for Renewable Fuel Standard credits are falling

tags:  RFS biofuels diesel ethanol prices

Record U.S. small-scale solar capacity was added in 2022

tags:  California Hawaii New Jersey New York electricity generation + solar states

In 2023, U.S. renewable diesel production capacity surpassed biodiesel production capacity

tags:  biofuels capacity diesel ethanol production/supply

Solar panel shipments set a record high in 2022 as capacity continued to grow

New pumped-storage capacity in china is helping to integrate growing wind and solar power.

tags:  China electricity generation hydroelectric solar storage + storage capacity wind

Almost all U.S. renewable diesel is consumed in California; most isn’t made there

tags:  California Kansas Louisiana North Dakota Oregon Washington + Wyoming biofuels production/supply states

As Texas wind and solar capacity increase, energy curtailments are also likely to rise

tags:  Texas production/supply solar wind

Nonfossil fuel energy sources accounted for 21% of U.S. energy consumption in 2022

tags:  biofuels coal consumption/demand crude oil hydroelectric liquid fuels + natural gas nuclear oil/petroleum wind

As solar capacity grows, duck curves are getting deeper in California

tags:  California capacity electric power grid electricity generation solar + states

Increased U.S. renewable and natural gas generation likely to reduce summer coal demand

tags:  STEO coal consumption/demand electricity forecasts/projections generation + natural gas weather

Recent Data

• See more data

Updated Data Series

• 01/29/2024 Renewable energy production and consumption by source
• 01/24/2024 Net generation for conventional hydroelectric
• 01/24/2024 Net generation for other renewables

Survey Forms, Changes & Announcements

• Annual Photovoltaic Cell/Module Shipments Report ›

Analysis & Projections

Annual solar photovoltaic module shipments report, steo between the lines: how is the mix of fuels used to produce electricity in the united states changing, annual energy outlook 2022: alternative policies for carbon fee cases, eia projects that renewable generation will supply 44% of u.s. electricity by 2050, monthly solar photovoltaic module shipments report, monthly densified biomass fuel report, monthly biofuels capacity and feedstocks update, our u.s. summer natural gas consumption forecast for electric power matches 2023 record, monthly energy review.

• See more analysis & projections

Upcoming Releases

• U.S. Fuel Ethanol Plant Production Capacity : August 2024
• See all upcoming

Interactive Visualizations, Data, & Multimedia

Alternative Fuel Vehicle Data Browser

U.S. Renewable Infrastructure Map

U.S. Energy Disruptions Map

STEO Data Browser

AEO Table Browser

Energy education, what is renewable energy.

• Renewable energy incentives
• See more Renewable energy topics
• How many alternative fuel and hybrid vehicles are there in the U.S.?
• See all petroleum FAQs

Energy Kids

• See more Renewable topics

1H 2024 US Clean Energy Market Outlook: Moving Past 2030

Almost 1 terawatt of new solar and wind capacity will connect to the US power grid between 2024 and 2035, BNEF forecasts. Even accounting for planned power plant retirements, this will drive an 80% increase in the nameplate power generation capacity of the US by 2035. The rise in renewables will be complemented by 221 gigawatts of battery storage between 2024 and 2035, as state-level targets lead to a flurry of utility integrated resource plans that include energy storage.

• About 2.7 times more solar than wind will come online from 2024-2035. Solar can be built cheaply in most of the US and the sector has been less hindered than wind by permitting and grid bottlenecks, supply chain constraints and high interest rates. Annual utility-scale solar build starts to fall before 2030 in Texas and California as these markets reach saturation, but this is more than offset by growth in other states.
• Both the timelines and cost of US wind and solar development are rising. Transformer and switchgear availability has become a particular chokepoint. Meanwhile, potential new import tariffs on solar cells from Southeast Asia and batteries from China may keep US equipment costs high even as global prices plummet due to oversupply.
• The rising penetration of intermittent wind and solar poses challenges to power markets and grid operators. Negative prices and curtailment of solar and wind output during hours of high production are already a feature of most big power markets and will have an increasing impact on project economics toward the end of this decade. Meanwhile, US grid operators are concerned about the potential for rising electricity demand from data centers and manufacturing, leading many to propose new gas power plants to maintain reliability.
• A major expansion of US grid infrastructure is needed to enable new supply and demand connections and to reduce congestion on power lines during hours of high wind and solar generation. Proposed federal reforms to increase interregional grid planning and establish centralized permitting of critical transmission are encouraging but will take time to implement.

BNEF clients can access the full report here .

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.   Sign up for our free monthly newsletter →

Lithium-Ion’s Grip on Storage Faces Wave of Novel Technologies

Lithium-ion batteries are set to face competition from novel tech for long-duration storage: bloombergnef research, us clean power at “inflection point”: bnef summit new york, global energy storage market records biggest jump yet, china already makes as many batteries as the entire world wants, china’s goldwind retains turbine supplier lead, as global wind additions hit new high, according to bloombergnef, small solar is driving biggest green market in latin america, 1q 2024 global pv market outlook.

Want to learn how we help our clients put it all together? Contact us

Advertisement

As Solar Power Surges, U.S. Wind Is in Trouble

By Brad Plumer and Nadja Popovich

Solar power projects in the U.S. have taken off in recent years.

30 gigawatts

Inflation Reduction Act passed

Capacity additions per year

Even as new wind power projects have slowed down.

20 gigawatts

But new wind power projects have slowed down.

Source: U.S. Energy Information Administration

Notes: Annual utility-scale power capacity additions are shown. Estimates for 2024 include projects scheduled to come online this year.

When President Biden signed the 2022 Inflation Reduction Act , it was expected to set off a boom in renewable energy, with hefty tax breaks that would make solar and wind power cheaper than fossil fuels.

So far, however, that dream has only come partly true. Solar panel installations are indeed soaring to record highs in the United States, as are batteries that can store energy for later. But wind power has struggled, both on land and in the ocean.

The country is now adding less wind capacity each year than before the law was passed.

Some factors behind the wind industry’s recent slowdown may be temporary, such as snarled supply chains. But wind power is also more vulnerable than solar power to many of the biggest logistical hurdles that hinder energy projects today: a lack of transmission lines, a lengthy permitting process and a growing backlash against new projects in many communities.

If wind power continues to stagnate, that could make the fight against global warming much harder, experts say. Many plans for quickly shifting the country away from fossil fuels envision a large expansion of both solar and wind, because the two sources generate electricity at different hours and can complement each other. A boom in solar power alone, which runs only in daytime, isn’t enough.

Some of the early predictions that the Inflation Reduction Act would help slash U.S. greenhouse gas emissions roughly 40 percent below 2005 levels by 2030 depended on a rapid acceleration of both solar and wind power this decade. But it is now far less certain that will happen:

Solar is on pace to meet targets. Wind? Not so much.

Average capacity additions per year for 2022-24 compared with post-I.R.A. projections

0 gigawatts

Expected average additions

per year, 2027-30

Exected average additions

Source: Clean Investment Monitor

Note: Expected ranges are based on the projected effects of the Inflation Reduction Act from three modeling groups: the Rhodium Group, Energy Innovation and the REPEAT project

“Right now, solar is pretty much in line” with what experts projected, said Trevor Houser, a partner at the Rhodium Group, a research firm that has tried to model the effects of the climate law. “But wind really needs to grow by quite a bit. Going forward, we’re definitely much more concerned about wind.”

Why Wind Power Is Struggling

Wind and solar power are often lumped together, but they have important differences that partly explain why one is slowing and the other is thriving right now.

For one, wind power is much more sensitive to location. Wind turbines in a gusty area can generate eight times as much electricity as turbines in an area with just half the breeze. For solar power, the difference between sunny spots and less sunny spots is considerably smaller. That means developers can’t just build wind farms anywhere.

A lot more wind power is needed to reach U.S. climate goals, experts say, especially if the country wants to do it quickly and cheaply.

Eric Gay/Associated Press

In the United States, the best places for wind tend to be in the blustery Midwest and Great Plains. But many areas are now crowded with turbines and existing electric grids are clogged , making it difficult to add more projects. Energy companies want to expand the grid’s capacity to transport even more wind power to population centers, but getting permits for transmission lines and building them has become a brutal slog that can take more than a decade .

“Getting wind projects built is getting a lot harder,” said Sandhya Ganapathy, chief executive of EDP Renewables North America, a leading wind and solar developer. “The low-hanging fruit, the easier access places are gone.”

Because they can reach the height of skyscrapers, wind turbines are more noticeable than solar farms and often attract more intense opposition from local communities. In Idaho, the entire State Legislature has opposed a new wind farm that would be visible from a World War II historic site. A few years ago, hundreds of residents were arrested on Oahu, Hawaii, for blocking the construction of a relatively small wind project.

“We have not seen examples of people being willing to risk arrest to stop solar projects,” said Matthew Eisenson, who tracks opposition to renewable energy at the Sabin Center for Climate Change Law at Columbia University.

Across the country, hundreds of local governments have restricted or banned wind or solar projects. If a county blocks a solar array, a developer might be able to move next door. But it’s not always as easy to find a new location for wind farms.

Wind turbines are more visible than solar farms and often attract more intense opposition.

Mason Trinca for The New York Times

The wind industry has also been hampered by soaring equipment costs after the pandemic wrecked supply chains and inflation spiked. While those factors initially hurt solar, too, the solar industry has adjusted much faster, with China nearly doubling its manufacturing capacity for panels over the last two years. Wind supply chains, which are dominated by a few manufacturers in China, Europe and the United States, have yet to fully recover.

The cost increases have been devastating for offshore wind projects in the Northeast, where developers have canceled more than half the projects they planned to build this decade.

Wind isn’t languishing only in the United States. While a record 117 gigawatts of new wind capacity came online last year globally, virtually all of that growth was in China . In the rest of the world, developers weren’t installing wind turbines any faster than they were in 2020.

The Case for Wind Power

Wind power can be incredibly useful for cutting the greenhouse gas emissions that are rapidly heating the planet, experts say.

That may surprise some: After all, the wind doesn’t always blow when it’s needed, and the average turbine only runs at maximum power about one-third of the time.

But when energy modelers have studied the lowest-cost ways to eliminate U.S. emissions, they have often concluded that it would be invaluable to get about one-third or more of the nation’s electricity from wind, up from about 10 percent today, alongside a mix of other technologies like solar, batteries, nuclear power, hydrogen and gas plants that can capture and bury their carbon.

That’s because wind turbines provide very cheap electricity, and they often ramp up at night, when solar power is unavailable. (As the energy writer Michael Thomas recently showed , this is readily apparent in Texas, where wind and solar power complement each other.)

New, long-distance transmission lines are crucial for unlocking American wind energy, but permitting and building them has become a brutal slog.

Jim Wilson/The New York Times

If wind power can’t expand as quickly as many proponents hope, the United States would need to rely much more heavily on other technologies that can supply carbon-free power throughout the day, such as new nuclear reactors or advanced geothermal power . But those technologies are still in earlier stages of development and are currently more expensive than wind.

“Limiting wind is the worst possible thing you could tell me we have to overcome” in trying to cut emissions to zero, said Ben Haley, a co-founder of Evolved Energy Research , an energy modeling firm.

Can Wind Make a Comeback?

It’s still possible that wind power could rebound. In fact, some experts argue that the recent slowdown is only a temporary artifact of tax policy.

It can take years to develop a wind farm and most companies had raced to finish projects by the end of 2021, which is when the last big federal tax credit for wind power was set to expire . The following year, Congress approved new subsidies in the Inflation Reduction Act, but it will take time for companies to refill the pipeline of wind projects in response.

“There are signs that wind is starting to turn the corner,” said John Hensley, vice president for markets and policy analysis at the American Clean Power Association, a renewable industry trade group.

Mr. Hensley said that U.S. wind manufacturing was beginning to ramp up thanks to new tax incentives, while costs were starting to come down. Last year, orders for new turbines increased by 130 percent, although many of them won’t be delivered until 2025 or later.

The wind industry has been struggling with soaring equipment costs after the pandemic wrecked supply chains and interest rates spiked.

Ted Shaffrey/Associated Press

Some states are now trying to make it easier to build renewable energy: Illinois , Michigan and Minnesota have all passed laws making it harder for local governments to restrict wind and solar. The federal government has issued new rules to accelerate the planning of transmission lines .

Demand for wind could also rise as a growing number of states, tech companies and hydrogen producers are trying to secure clean electricity around the clock, rather than just a burst of solar power in the daytime.

California is a case in point. While the state leads the nation in drawing electricity from the sun, it still relies heavily on natural gas after dark. Batteries can help shift some of that solar power into the evening , but to meet its climate goals, California is counting on several giant new transmission lines that will import electricity from sprawling wind farms in New Mexico and Wyoming .

Even if the economics improve, wind power still faces political hurdles. Many experts say federal legislation is still needed to ease the process of building high-voltage transmission lines. But that’s unlikely to happen in a sharply divided Congress. And the November election looms, with former President Donald J. Trump, the presumptive Republican nominee, promising to obstruct offshore wind farms if he returns to the White House.

The fate of the wind industry could be a test for whether the country can build large energy projects more generally, said Ryan Jones, a co-founder of Evolved Energy Research. “If we can’t,” he said, “getting to zero emissions is pretty darn challenging.”

More on the Energy Transition:

Giant Batteries Are Transforming the Way the U.S. Uses Electricity

They’re delivering solar power after dark in California and helping to stabilize grids in other states. And the technology is expanding rapidly.

New Rules to Overhaul Electric Grids Could Boost Wind and Solar Power

The Federal Energy Regulatory Commission approved the biggest changes in more than a decade to the way U.S. power lines are planned and funded.

By Brad Plumer

Why the U.S. Electric Grid Isn’t Ready for the Energy Transition

The current system makes it hard to build the long-distance power lines needed to transport wind and solar nationwide.

By Nadja Popovich and Brad Plumer

• Share full article

Our Coverage of Climate and the Environment

News and Analysis

With the planet in the grips of its highest temperatures in more than 100,000 years, scientists with the U.N. weather agency have crunched the numbers and come to a stark conclusion: More record-hot years are all but inevitable .

Leaders in Alameda, Calif., voted to stop scientists from testing a cloud-brightening device that might one day be used to artificially cool the planet , overruling city staff members who had found the experiment posed no danger.

Human-caused warming has doubled the chances that southern Brazil will experience extreme, multiday downpours  like the ones that recently caused disastrous flooding there, a team of scientists said.

Adopting Orphaned Oil Wells:  Students, nonprofit groups and others are fund-raising to cap highly polluting oil and gas wells  abandoned by industry.

Struggling N.Y.C. Neighborhoods:  New data projects are linking social issues with global warming. Here’s what that means for five communities in New York .

Biden Environmental Rules:  The Biden administration has rushed to finalize 10 major environmental regulations  to meet its self-imposed spring deadline.

F.A.Q.:  Have questions about climate change? We’ve got answers .

• GridTECH Connect

Latest News

Get the latest updates from Renewable Energy World & receive an exclusive event discount.

• My View My View
• Following Following
• Saved Saved

Biden administration expands tax credits beyond wind, solar

• Medium Text

Sign up here.

Reporting by Valerie Volcovici; Editing by Stephen Coates

Our Standards: The Thomson Reuters Trust Principles. New Tab , opens new tab

Thomson Reuters

Valerie Volcovici covers U.S. climate and energy policy from Washington, DC. She is focused on climate and environmental regulations at federal agencies and in Congress and how the energy transition is transforming the United States. Other areas of coverage include her award-winning reporting plastic pollution and the ins and outs of global climate diplomacy and United Nations climate negotiations.

Business Chevron

Norway wealth fund to vote against Musk's $56 billion Tesla pay package

Norway's $1.7 trillion sovereign wealth fund said on Saturday it will vote against ratifying Tesla CEO Elon Musk's $56 billion pay package, which is up for a shareholder vote next week, after a Delaware judge invalidated it earlier this year.

We use cookies to collect and analyse information on our site's performance and to enable the site to function. Cookies also allow us and our partners to show you relevant ads when you visit our site and other 3rd party websites, including social networks. You can choose to allow all cookies by clicking ‘Allow all’ or manage them individually by clicking ‘Manage cookie preferences,’ where you will also find more information.

• News and insights
• Press releases

bp Integrated Energy Company strategy update: Growing investment, growing value, growing distributions

• Performing: 2022 EBITDA $60.7 billion; full year operating cash flow $40.9 billion; net debt $21.4 billion, lowest for almost a decade; ROACE 30.5%; full year tax $15.1 billion; strongest upstream plant reliability on record; lowest production costs in 16 years
• Transforming: investment in transition growth engines c. 30% of 2022 total investment, up from c. 3% in 2019 
• Investing more in the energy transition and bp’s transition, investing more in supporting energy security and energy affordability today 
• Up to $8 billion more into transition growth engines by 2030 – growing in higher-return bioenergy, and convenience & EV charging; focusing hydrogen and renewables & power where bp can leverage integration 
• Up to $8 billion more into oil and gas by 2030 – targeting short-cycle fast-payback opportunities with lower additional operational emissions 
• Aim to materially increase earnings through 2030 – aiming for $51-56 billion group EBITDA in 2030
• Growing dividends: 10% increase in dividend per ordinary share for fourth quarter, representing 21% growth from 4Q 2021.
• Growing buybacks: further $2.75 billion buybacks announced today; total of $11.25 billion buybacks announced from 2022 surplus cash flow
• Increasing targets: over 12% annual EBIDA per share growth to 2025; over 18% ROACE in 2025 and 2030

Since introducing its new purpose, net zero ambition, organisation and strategy in 2020, bp has built strong momentum across its strategy and delivered value for shareholders. The major global uncertainties experienced in the past three years – from the pandemic and its aftermath to the impact of Russia’s attack on Ukraine – have increased the world’s focus on energy security and affordability as well as accelerated the drive towards a lower carbon energy system.

“It’s clearer than ever after the past three years that the world wants and needs energy that is secure and affordable as well as lower carbon – all three together, what’s known as the energy trilemma”

Bernard looney, chief executive officer.

bp chief executive Bernard Looney said: “It’s clearer than ever after the past three years that the world wants and needs energy that is secure and affordable as well as lower carbon – all three together, what’s known as the energy trilemma. To tackle that, action is needed to accelerate the transition. And – at the same time – action is needed to make sure that the transition is orderly, so that affordable energy keeps flowing where it’s needed today. 

"As an integrated energy company, bp is very deliberately set up to help on both counts. With three years of delivery and track record – we have increased confidence our strategy is working. And with today’s announcement we are leaning further in. We are growing our investment into our transition and, at the same time, growing investment into today’s energy system. In doing so - we see tremendous opportunity to create value. And it’s what governments and customers are asking of companies like us.”

bp now aims to accelerate the growth in earnings from its transition growth engines (TGEs) while also delivering higher earnings than previously expected from its oil and gas businesses through 2030 - both compared to bp’s previous aims (1) . 

bp plans to support this growth by disciplined increases in investment over the period to 2030 of up to $8 billion in the TGEs and up to $8 billion in oil and gas. bp is adjusting its target capital expenditure range to $14-18 billion a year out to 2030 (2) , from the previous range of $14-16 billion. All investments will remain subject to disciplined application of bp’s balanced investment and returns criteria. 

bp expects this additional incremental investment to deliver around $3 billion additional group EBITDA in 2025 and is aiming for that to grow to $5-6 billion in 2030. This would comprise an additional $2 billion from the TGEs and $3-4 billon from oil and gas projects in 2030. bp has also raised its oil and gas price and refining margin assumptions (3) . 

As a result of both factors, bp is now targeting group EBITDA of $46-49 billion in 2025 and is aiming for $51-56 billion in 2030, in a $70/barrel (2021 real) oil price environment. These compare to its previous target and aim, from May 2022, of around $38 billion in 2025 and $39-46 billion in 2030 at $60/barrel (2020 real).  

Performing while transforming

After setting out its new purpose, net zero ambition, structure and strategy in 2020, bp’s focus is now on delivering its transformation into an Integrated Energy Company.  

Bernard Looney: “Throughout 2022, bp continued to focus on delivery of our Integrated Energy Company strategy. We are helping provide the energy the world needs today and – at the same time – investing with discipline into our transition and the energy transition – as demonstrated by the Archaea Energy acquisition. We are strengthening bp, with our strongest upstream plant reliability on record and our lowest production costs in 16 years, helping to generate strong returns and reducing debt for the 11th quarter in a row. Importantly, we are delivering for our shareholders – with buybacks and a growing dividend. This is exactly what we said we would do and will continue to do – performing while transforming.”

In 2022, bp delivered EBITDA of $61 billion, operating cash flow of $41 billion, including around $7 billion working capital build, and reported underlying replacement cost profit of $28 billion. 

It continued to strengthen its finances, reducing net debt by $9.2 billion over the year to $21.4 billion – the lowest for over nine years. ROACE for the year was 30.5%. For 2022, bp incurred a total tax charge of $15.1 billion on an underlying basis, representing an effective tax rate of 34%. 

bp also delivered sector-leading distributions for its shareholders in 2022. bp today announced a 10% increase in the quarterly dividend for the fourth quarter of 2022, to 6.61c per ordinary share. Together with the 10% rise in the second quarter of 2022, this represents 21% growth in the dividend compared to the fourth quarter of 2021. 

With plans for $2.75 billion share buybacks from fourth quarter surplus cash flow announced today, bp has also announced a total of $11.25 billion share buybacks from 2022 surplus cash flow.

Through 2022, bp also continued to deliver its transformation, notably with the acquisition of biogas producer Archaea Energy, forming Azule Energy with Eni in Angola, and adding significant potential opportunities for hydrogen, including in Australia, Abu Dhabi, Egypt, Oman and Mauritania. 

In 2022, it invested $4.9 billion, around 30% of its total $16.3 billion capital expenditure, into its transition growth engines - including the acquisition of Archaea Energy. This compares to around 3% in 2019. bp continues to expect this proportion to grow to around 50% in 2030. 

Leaning further into bp's strategy

More investment in bp’s transition.

bp aims to increase investment in its TGEs by up to $1 billion a year on average, or up to a cumulative additional $8 billion to 2030. bp’s investment in its TGEs is now expected to reach $7-9 billion a year in 2030 (4) - with cumulative investment over 2023-2030 around $55-65 billion.

bp aims to invest around half of this cumulative total in the TGEs where bp has established businesses, capabilities and track record – in bioenergy, and in convenience and EV charging; the other half in hydrogen and renewables & power.

bp expects to achieve returns of greater than 15% from bioenergy, and from convenience and EV charging combined, and double digit returns from hydrogen. It expects 6-8% unlevered returns in renewables. 

Earnings from bp’s TGEs are expected to grow as a result of these changes. bp now expects the TGEs to deliver $3-4 billion EBITDA in 2025, and is aiming for $10-12 billion in 2030, comprising: over $4 billion from bioenergy; over $4 billion from convenience and EV charging; and $2-3 billion from hydrogen and renewables & power.

Bernard Looney : “We will increase our focus on the transition growth engines able to deliver nearer-term solutions – like EV chargers and sustainable aviation fuels – that can help people and businesses decarbonise sooner. And we will continue to build our hydrogen and renewables and power businesses for the longer term, based around projects where bp’s integrated approach can create significant additional value.”

Bioenergy: bp plans to grow its established bioenergy businesses materially. It plans to increase its supply of biogas six-fold, underpinned by Archaea Energy, to up to 70,000 barrels of oil equivalent a day in 2030. bp aims to increase biofuel production to around 100,000 barrels a day by 2030, supported by five major new projects at bp refineries, focused on production of sustainable aviation fuel.  

Convenience and EV charging: expansion of bp’s strategic convenience site networks is expected to drive growth in bp’s convenience gross margin by around 10% a year to 2030. Together with EV charging they are expected to help grow bp’s ability to offer lower carbon transport solutions for customers. Today bp has 22,000 EV charge points and aims for more than 100,000 by 2030 - around 90% rapid or ultra-fast. It is developing leading positions in key geographies worldwide, underpinned by partnerships with major fleet operators. 

Hydrogen and renewables & power: through this decade bp aims to establish the foundations of a material business for the future. bp aims to build a leading position globally in hydrogen, initially supplying its own refineries, scaling up to meet growing customer demand and in parallel, as markets develop, developing global export hubs for hydrogen and its derivatives. By 2030 bp aims to produce between 0.5-0.7 million tonnes a year of primarily green hydrogen, also pursuing selected blue hydrogen opportunities. 

In renewables & power , bp will focus investment on opportunities where it can create integration value and enhance returns. bp aims to build a portfolio – including a global position in offshore wind - in support of green hydrogen, e-fuels, EV charging and power trading, together with continued growth in its self-funded solar joint venture Lightsource bp. bp remains on track to deliver its aim of having developed 50GW renewable power to FID by 2030; of this it aims to have around 10GW net installed capacity – largely operated. bp also expects to have assets under construction and for Lightsource bp to contribute materially. 

More investment in today’s energy system:

bp also aims to increase investment into resilient high-quality oil and gas projects - again by an average of up to $1 billion a year, or up to a cumulative $8 billion to 2030. The investment will help to meet near-term demand for secure supplies of oil and gas, generating additional earnings that can further strengthen bp and support investment in its transition. 

The incremental investment to 2025 will target shorter-term, fast-payback projects that maximise value and can deliver rapidly, with minimal new infrastructure. While bp will continue to high-grade its global oil and gas portfolio, due to improving operational reliability and commerciality over the past four years it also now anticipates retaining some oil and gas assets longer than previously envisaged.

Bernard Looney: “We need continuing near-term investment into today’s energy system – which depends on oil and gas – to meet today’s demands and to make sure the transition is an orderly one. We have high-quality options throughout our portfolio, allowing us to choose only the best. We will prioritise projects where we can deliver quickly, at low cost, using our existing infrastructure, allowing us to minimise additional emissions and maximise both value and our contribution to energy security and affordability.”

As a result of these changes, bp anticipates its oil and gas production will be around 2.3 million barrels of oil equivalent a day (mmboe/d) in 2025 and aims for it to be around 2.0 mmboe/d in 2030. This 2030 production would be around 25% lower than bp’s production in 2019, excluding production from Rosneft, compared to bp’s previous expectation of a reduction of around 40%. bp correspondingly now aims for a fall of 20% to 30% in emissions from the carbon in its oil and gas production (5) in 2030 compared to a 2019 baseline, lower than the previous aim of 35-40%. 

From the first quarter of 2022, bp has no longer reported oil and gas production from Russia. With the removal of this Russian production, bp’s full year average reported production in 2022 was around 40% lower than the total production bp reported in 2019. 

Delivering for shareholders 

bp remains focused on the disciplined delivery of its financial frame. Through the financial frame and bp’s business plans out to 2025, in a $70 per barrel price environment, bp aims to offer: 

• Accelerating growth : with a compound average growth rate for EBIDA per share of over 12% between 2H 2019/1H2020 to 2025 at $70 per barrel 2021 real.
• Competitive returns : expecting to achieve a return on average capital employed (ROACE) of over 18% in both 2025 and 2030 at $70 per barrel 2021 real.
• Debt reduction : intending to allocate around 40% of 2023 surplus cash flow to further strengthening the balance sheet.
• Dividends: bp expects to maintain a resilient cash balance point of around $40 per barrel Brent oil price, with $11 per barrel refining marker margin and $3 per million BTU Henry Hub gas price. bp continues to see the capacity to continue to grow its dividend per ordinary share by around 4% a year at around $60/barrel, subject to the board’s discretion (6).  
• Buybacks (6) : bp is committed to allocating 60% of 2023 surplus cash flow to share buybacks, expecting a buyback of around $4 billion a year - at around $60 a barrel, at the lower end of its capital expenditure range and subject to maintaining a strong investment grade credit rating. The buyback commitment offers leverage to higher price environments.  
• This announcement contains inside information. The person responsible for arranging the release of this announcement on behalf of BP p.l.c. is Ben Mathews, Company Secretary.
• bp’s fourth quarter and full year 2022 results can be seen at www.bp.com/results .

Notes to editors

• Compared to aims set out by bp in February 2022.
• Capital expenditure in 2023 planned to be in range $16-18 billion.
• Assumptions to 2030, all 2021 real: Brent oil price $70/barrel; Henry Hub gas price $4/million Btu; bp refining marker margin, $14/barrel. See also note 1 of bp 4Q and full year results 2022. 
• bp’s investment in TGEs is expected to be $6-8 billion in 2025.
• bp’s aim to reach net zero* CO2 emissions, in accordance with bp’s Aim 2, from the carbon in our oil and gas production, in respect of the estimated CO2 emissions from the combustion of upstream production of crude oil, natural gas and natural gas liquids on a bp equity share basis based on bp’s net share of production, excluding bp’s share of Rosneft production and assuming that all produced volumes undergo full stoichiometric combustion to CO2. Aim 2 is bp’s Scope 3 aim and relates to Scope 3, category 11 emissions.  Any interim target or aim in respect of bp’s Aim 2 is defined in terms of absolute reductions relative to the baseline year of 2019.
• In setting the dividend per ordinary share and the buyback each quarter the board will take into account factors including the cumulative level of and outlook for surplus cash flow, the cash balance point and the maintenance of a strong investment grade credit rating.
• For the purposes of this announcement, each of the following terms has the meaning given to it in bp’s fourth quarter and full year 2022 financial results announcement: operating cash flow; net debt; ROACE; upstream plant reliability; EV charge points; surplus cash flow; cash balance point; capital expenditure; refining marker margin (RMM); strategic convenience sites and underlying replacement cost (RC) profit.
• For the purposes of this announcement, each of the following terms has the meaning given to it in the bp Annual Report and Form 20-F 2021: convenience gross margin.
• EBIDA: has the meaning given to the term Adjusted EBIDA in bp’s fourth quarter and full year 2022 financial results announcement.
• EBIDA per share: share buybacks are modelled across a range of share prices in this calculation and EBIDA is after impact of planned divestments. 
• EBITDA: has the meaning given to the term Adjusted EBITDA in bp’s fourth quarter and full year 2022 financial results announcement.
• Net zero: References to net zero for bp in the context of our ambition and Aims 1, 2 and 3 mean achieving a balance between (a) the relevant Scope 1 and 2 emissions (for Aim 1), Scope 3 emissions (for Aim 2) or product lifecycle emissions (for Aim 3), and (b) the aggregate of applicable deductions from qualifying activities such as sinks under our methodology at the applicable time.
• Rapid or ultra-fast: rapid charging ≥50kW and ultra-fast charging ≥150kW.

Further information

bp press office, London:  [email protected]

Cautionary statement

In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’) and the general doctrine of cautionary statements, bp is providing the following cautionary statement: The discussion in this results announcement contains certain forecasts, projections and forward-looking statements - that is, statements related to future, not past events and circumstances - with respect to the financial condition, results of operations and businesses of bp and certain of the plans and objectives of bp with respect to these items. These statements may generally, but not always, be identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’, ‘focus on’ or similar expressions. 

In particular, the following, among other statements, are all forward looking in nature: plans and expectations regarding bp’s performance, earnings, returns, capital expenditure, targets and market position through 2025 and/or 2030; expectations related to oil and gas prices and refining margins; expectations regarding bp’s plans to invest up to an additional $8 billion in its transition growth engines and up to additional $8 billion in oil and gas projects, both by 2030; plans and expectations related to earnings growth, including the aim of group EBITDA of $51-56 billion in 2030 at oil prices of $70 per barrel in 2021 real terms; plans and expectations related to bp’s target of growing EBIDA per share at over 12% compound average growth rate through 2025, and growing ROACE to over 18% in both 2025 and 2030; plans, expectations and assumptions regarding oil and gas demand, supply and prices; plans and expectations regarding bp’s transition growth engines of bioenergy, convenience, EV charging, hydrogen and renewables and power, including plans and expectations related to allocation of capital expenditure, returns and EBITDA growth; expectations regarding earnings from incremental investments including the delivery of $5-6 billion of additional EBITDA in 2030; plans and expectations regarding the growth of bp’s bioenergy business; plans and expectations related to the expansion of strategic convenience site networks and EV charge points; plans and expectations regarding hydrogen, including aims to establish a future material business and build a leading global position, customer demand, the development of global export hubs, and aims relating to green and blue hydrogen; plans and expectations in renewables and power, including the target of developing 50 gigawatts to FID and having 10 gigawatts net installed capacity mainly bp operated, both by 2030 and Lightsource bp’s contribution to bp’s targets and aims; plans and expectations regarding investment into resilient high-quality oil and gas projects; bp’s plans to continue to high-grade its global oil and gas portfolio; plans and expectations regarding the retention of certain oil and gas assets; plans and expectations relating to bp’s future oil and gas production; plans and expectations relating to taxes, including the effective tax rate; plans regarding future quarterly dividends and the amount and timing of share buybacks;  plans and expectations regarding the allocation of surplus cash flow and cash balance point; and plans and expectations relating to the reduction of debt and maintenance of an investment grade credit rating.

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future and are outside the control of bp. 

Actual results or outcomes, may differ materially from those expressed in such statements, depending on a variety of factors, including: the extent and duration of the impact of current market conditions including the volatility of oil prices, the effects of bp’s plan to exit its shareholding in Rosneft and other investments in Russia, the impact of COVID-19, overall global economic and business conditions impacting bp’s business and demand for bp’s products as well as the specific factors identified in the discussions accompanying such forward-looking statements; changes in consumer preferences and societal expectations; the pace of development and adoption of alternative energy solutions; developments in policy, law, regulation, technology and markets, including societal and investor sentiment related to the issue of climate change; the receipt of relevant third party and/or regulatory approvals; the timing and level of maintenance and/or turnaround activity; the timing and volume of refinery additions and outages; the timing of bringing new fields onstream; the timing, quantum and nature of certain acquisitions and divestments; future levels of industry product supply, demand and pricing, including supply growth in North America and continued base oil and additive supply shortages; OPEC+ quota restrictions; PSA and TSC effects; operational and safety problems; potential lapses in product quality; economic and financial market conditions generally or in various countries and regions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations and policies, including related to climate change; changes in social attitudes and customer preferences; regulatory or legal actions including the types of enforcement action pursued and the nature of remedies sought or imposed; the actions of prosecutors, regulatory authorities and courts; delays in the processes for resolving claims; amounts ultimately payable and timing of payments relating to the Gulf of Mexico oil spill; exchange rate fluctuations; development and use of new technology; recruitment and retention of a skilled workforce; the success or otherwise of partnering; the actions of competitors, trading partners, contractors, subcontractors, creditors, rating agencies and others; bp’s access to future credit resources; business disruption and crisis management; the impact on bp’s reputation of ethical misconduct and non-compliance with regulatory obligations; trading losses; major uninsured losses; the possibility that international sanctions or other steps or actions taken by any competent authorities or any other relevant persons may impact Rosneft’s business or outlook, bp’s ability to sell its interests in Rosneft, or the price for which bp could sell such interests; the actions of contractors; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism; cyber-attacks or sabotage; and other factors discussed elsewhere in this report, as well as those factors discussed under “Risk factors” in bp’s Annual Report and Form 20-F 2021 as filed with the US Securities and Exchange Commission and those factors discussed under “Principal risks and uncertainties” in bp’s Report on Form 6-K regarding results for the six-month period ended 30 June 2022 as filed with the US Securities and Exchange Commission.

Delivering hydrogen to EU’s industry: which are the greenest options?

Using hydrogen produced from abundantly available renewables on-site is the most sustainable option. Delivering compressed renewable hydrogen via pipelines or shipping liquid renewable hydrogen could still be environmentally friendly, research says.

Renewable hydrogen is expected to play a crucial role in reducing carbon emissions in Europe. Previous JRC  research revealed that sourcing it from regions with cheaper renewable energy can prove to be more cost-effective than local production. 

However, environmental concerns arise from transporting large quantities of hydrogen over long distances, as the environmental impact varies significantly according to the production technology and the method of delivery. 

To address these concerns, a  new study compares the life cycle environmental impacts of on-site production through steam methane reforming (SMR) or electrolysis with three different delivery methods, including compression, liquefaction, and chemical bonding to other molecules.  Transportation by both ship and pipeline was considered.

The distance used to compare the different methods of delivery is 2,500 km, compatible with the extent of EU territory and equivalent to the distance between Portugal and the Netherlands. The two countries were considered based on a proposal in an EU funded project which examined the feasibility of sustainable hydrogen transportation.

The results show that the environmental performance of hydrogen supplied to large industries can vary significantly based on the production technology and delivery pathway. 

The study was carried out by the JRC for the  Clean Hydrogen Partnership , a public-private partnership supporting research and innovation (R&I) activities in hydrogen technologies in Europe. The findings result in key recommendations for policymakers and stakeholders to help countries and industries to accelerate the transition towards a more sustainable hydrogen economy.

On-site production versus long-distance delivery

The most environmentally sustainable approach is on-site production using efficient renewable sources, such as wind power in the Netherlands. If on-site production is not viable using local abundant renewable sources, importing renewable hydrogen can still lead to a significant reduction in greenhouse gas (GHG) emissions compared to on-site production with fossil fuels. However, focusing solely on GHG emissions may lead to other, unintended environmental impacts. 

Shipping liquid hydrogen and transporting compressed hydrogen through pipelines appear to have the least environmental impact when delivering hydrogen over long distances. 

Meanwhile, the process of packing and unpacking hydrogen into chemical carriers such as ammonia, liquid organic compounds, methanol, and synthetic natural gas demands larger amounts of energy and resources. It makes these options less desirable to minimise environmental impact. But no significant difference was noticed in comparative environmental impact of delivery methods when comparing chemical carriers one with another. 

Role of renewable energy infrastructure 

The report emphasises the close relationship between the environmental impact of delivered hydrogen and renewable energy infrastructure. 

For imported solar-generated hydrogen to have an environmental advantage over conventional hydrogen production from fossil fuels, the environmental impact of generating electricity through photovoltaic panels must be significantly reduced. 

This can be achieved by improving the efficiency of photovoltaic panels in terms of materials use and utilising renewable energy for their production.

Impact of water use

Water use is another crucial factor to consider. The availability of freshwater affects the impact of hydrogen production. On-site hydrogen generation in water-rich countries proves to be a more sustainable option in terms of water use compared to importing hydrogen from water-scarce nations. 

Hydrogen loss

Hydrogen losses during the delivery chain can significantly increase the environmental impact of delivered hydrogen. However, options that are more susceptible to losses, such as liquid and compressed hydrogen, still have lower environmental impacts than using hydrogen carriers.

When on-site production of hydrogen using local renewable sources is not feasible, importing renewable hydrogen from closer regions becomes the more environmentally sustainable choice. When transporting hydrogen over long distances within Europe, delivering compressed hydrogen through pipelines or liquid hydrogen via ships stands out as the preferred option in terms of environmental impact.

Related links

Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

Clean Hydrogen Partnership

EU Hydrogen strategy

More news on a similar topic

• General publications

• 6 March 2024

• 24 November 2023

• News announcement
• 11 September 2023
• 10 min read

Share this page

7 energy and climate good-news stories to give you hope

Recent positive energy trends can allow us to be optimistic heading into the future. Image:  Unsplash/Karsten Würth

.chakra .wef-1c7l3mo{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;}.chakra .wef-1c7l3mo:hover,.chakra .wef-1c7l3mo[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-1c7l3mo:focus,.chakra .wef-1c7l3mo[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);} Johnny Wood

.chakra .wef-1nk5u5d{margin-top:16px;margin-bottom:16px;line-height:1.388;color:#2846F8;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-1nk5u5d{font-size:1.125rem;}} Get involved .chakra .wef-9dduvl{margin-top:16px;margin-bottom:16px;line-height:1.388;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-9dduvl{font-size:1.125rem;}} with our crowdsourced digital platform to deliver impact at scale

• 2023 was a tough year for the planet, with nine consecutive months of hottest-ever temperatures.
• However, as the energy transition evolves there are reasons for optimism.
• The World Economic Forum’s Energy Transition Index 2024 shows positive readiness trends for several key energy transition enablers.

Are you concerned about the climate crisis?

If so, you’re not alone. Within the last year we’ve seen a string of 11 consecutive “hottest-ever” months , and temperature “firsts” continue to hit media headlines.

While there is still time to limit global emissions to within 1.5℃ above pre-industrial levels , the window of opportunity is closing fast, according to the International Energy Agency (IEA).

But as the transition to a low- or no-carbon future gains momentum, several bright spots are appearing on the horizon.

As part of the World Economic Forum’s Fostering Effective Energy Transition 2023 report, the energy transition index (ETI) shows a positive energy transition readiness trend for key enablers, such as regulation, infrastructure and financial investment. These enablers help provide the framework for a successful transition to clean energy.

Here are 7 other reasons to feel optimistic about the future of energy and the environment.

1. 'Spectacular' global renewables growth in 2023

Global renewable energy capacity hit 50% growth in 2023 , its fastest growth rate for twenty years. Renewable capacity is on course to increase by 2.5 times by the end of the decade, keeping a key COP28 climate target of tripling renewable capacity within reach.

Rapid growth in China’s solar industry was the main driver, while Europe, the US and Brazil also achieved impressive renewable energy growth.

Have you read?

4 technologies that are accelerating the green hydrogen revolution, this is how the mena region can accelerate its renewable energy production, the trilemma facing the energy industry and how it's dealing with it , 2. eu parliament: new directive criminalizes eco-destruction.

The European Union has voted to criminalize the most serious cases of ecosystem destruction , becoming the first international body to do so.

Crimes “comparable to ecocide” including habitat loss and illegal logging, can be hit with tough penalties and prison sentences under the EU Parliament's updated environmental crime directive. The bloc’s member states have a two-year period to adopt the directive into national law.

3. Seven countries now powered by 100% renewables

As global wind generation capacity increases, seven countries are now fully reliant on clean renewable energy for their power needs .

Albania, Bhutan, Ethiopia, Iceland, Nepal, Paraguay and the Democratic Republic of Congo generate more than 99.7% of their electricity needs from geothermal, hydro-electricity, solar or wind power.

4. Two-fold increase in government policies tackling deforestation and nature

The number of nature-based policy announcements from governments around the world has doubled in the past year, a study by the Inevitable Policy Response forecasting group says .

However, more than 90% of nature policies introduced in 2023 were in-line with the 2℃ warming target, rather than the 1.5℃ climate goal.

5. World’s largest offshore wind farm at full capacity

With 165 turbines harvesting wind power in an area of the North Sea equal in size to 64,000 soccer pitches, the world’s largest offshore wind farm, Hornsea 2, is operating at full capacity .

Located almost 90 kilometres from the UK’s Yorkshire coastline, the wind farm’s total generating capacity of 1,300MW can supply enough clean energy to power 1.4 million homes in the UK each year.

6. European Court finds climate change inaction violates human rights

A landmark ruling by the European Court of Human Rights (ECHR) finds in favour of an association of 2,500 Swiss women that the Swiss government’s inaction to address climate change violated their fundamental human rights .

The ruling could open the door to more challenges of governmental inaction over climate change. However, a similar case brought against every EU member state by six Portuguese young people was rejected by the ECHR on jurisdiction grounds.

The Global Risks Report 2023 ranked failure to mitigate climate change as one of the most severe threats in the next two years, while climate- and nature- related risks lead the rankings by severity over the long term.

The World Economic Forum’s Centre for Nature and Climate is a multistakeholder platform that seeks to safeguard our global commons and drive systems transformation. It is accelerating action on climate change towards a net-zero, nature-positive future.

Learn more about our impact:

• Scaling up green technologies: Through a partnership with the US Special Presidential Envoy for Climate, John Kerry, and over 65 global businesses, the First Movers Coalition has committed $12 billion in purchase commitments for green technologies to decarbonize the cement and concrete industry.
• 1 trillion trees: Over 90 global companies have committed to conserve, restore and grow more than 8 billion trees in 65 countries through the 1t.org initiative – which aims to achieve 1 trillion trees by 2030.
• Sustainable food production: Our Food Action Alliance is engaging 40 partners who are working on 29 flagship initiatives to provide healthy, nutritious, and safe foods in ways that safeguard our planet. In Vietnam, it supported the upskilling of 2.2 million farmers and aims to provide 20 million farmers with the skills to learn and adapt to new agricultural standards.
• Eliminating plastic pollution: Our Global Plastic Action Partnership is bringing together governments, businesses and civil society to shape a more sustainable world through the eradication of plastic pollution. In Ghana, more than 2,000 waste pickers are making an impact cleaning up beaches, drains and other sites.
• Protecting the ocean: Our 2030 Water Resources Group has facilitated almost $1 billion to finance water-related programmes , growing into a network of more than 1,000 partners and operating in 14 countries/states.
• Circular economy: Our SCALE 360 initiative is reducing the environmental impacts of value chains within the fashion, food, plastics and electronics industries, positively impacting over 100,000 people in 60 circular economy interventions globally.

Want to know more about our centre’s impact or get involved? Contact us .

7. Renewables’ growth could overtake coal by 2025

Clean renewable energy looks set to become the world’s biggest source of power by 2025, overcoming coal, according to the IEA.

Renewables are set to account for more than 90% of global electricity expansion over the coming years. Global renewable power capacity is predicted to increase by 2,400 gigawatts between 2022 and 2027.

While there is still some way to go on the journey to net-zero greenhouse gas emissions, it seems we are heading in the right direction. Extending the metaphor, the question is… are we travelling fast enough?

What's the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index , which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Centre for Energy & Materials is working on initiatives including Clean Power and Electrification , Energy and Industry Transition Intelligence, Industrial Ecosystems Transformation , and Transition Enablers to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Partnership (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

Is your organisation interested in working with the World Economic Forum? Find out more here .

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

The Agenda .chakra .wef-n7bacu{margin-top:16px;margin-bottom:16px;line-height:1.388;font-weight:400;} Weekly

A weekly update of the most important issues driving the global agenda

.chakra .wef-1dtnjt5{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-flex-wrap:wrap;-ms-flex-wrap:wrap;flex-wrap:wrap;} More on Climate Action .chakra .wef-17xejub{-webkit-flex:1;-ms-flex:1;flex:1;justify-self:stretch;-webkit-align-self:stretch;-ms-flex-item-align:stretch;align-self:stretch;} .chakra .wef-nr1rr4{display:-webkit-inline-box;display:-webkit-inline-flex;display:-ms-inline-flexbox;display:inline-flex;white-space:normal;vertical-align:middle;text-transform:uppercase;font-size:0.75rem;border-radius:0.25rem;font-weight:700;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;line-height:1.2;-webkit-letter-spacing:1.25px;-moz-letter-spacing:1.25px;-ms-letter-spacing:1.25px;letter-spacing:1.25px;background:none;padding:0px;color:#B3B3B3;-webkit-box-decoration-break:clone;box-decoration-break:clone;-webkit-box-decoration-break:clone;}@media screen and (min-width:37.5rem){.chakra .wef-nr1rr4{font-size:0.875rem;}}@media screen and (min-width:56.5rem){.chakra .wef-nr1rr4{font-size:1rem;}} See all

Climate crisis costs the world 12% in GDP for every 1°C temperature rise, and other nature and climate stories you need to read this week

Michael Purton

June 6, 2024

Why climate finance is pivotal to alleviating harm from South Asia's extreme heat

Aarti Lila Ram

June 5, 2024

Why investment in water is crucial to tackling the climate crisis

Kate Whiting

Why investing in nature makes ecological and economic sense

Razan Al Mubarak

How the First Movers Coalition is working to decarbonize the aluminium, steel and cement and concrete sectors

Jelena Aleksić and Daniel Boero Vargas

June 4, 2024

Low-carbon cement can drive sustainable development in the Global South. Here’s how

Jan Overney

The Price of Going Green Is High

Key takeaways.

People around the world are beginning to object to the increasingly expensive costs of the “energy transition” being pushed by their governments and some businesses.

A paper by the Climate Policy Initiative (CPI) advocates for much heftier expenses for consumers, by recommending a 7-fold increase in money spent on programs to achieve U.N. goals, reaching $9 trillion annually by 2030 and increasing after that.

CPI is an international group with initial funding from George Soros that advocates for aggressive climate actions by central governments.

Europe has already begun to de-industrialize, with Germany leading the way as they begin to retreat from some of their costliest plans under public pressure.

States in the United States such as California, who have led in “green” initiatives, are also beginning to pushback on some “green” policies.

The Climate Policy Initiative (CPI) indicates that climate finance worldwide must increase from $1.3 trillion in 2021/2022 to $9 trillion by 2030 to keep the goals of the Paris Agreement alive. The CPI is an international organization launched with initial funding from George Soros , with offices in the United States, China and other countries. It finds that the annual climate finance needed immediately increases to $8.1 trillion and then steadily increases to $9 trillion by 2030, jumping to over $10 trillion each year from 2031 to 2050. Where is that kind of money going to come from? Countries raised a record $104 billion last year by charging firms for emitting carbon dioxide through carbon pricing and cap and trade systems, but that is a drop in the bucket to what CPI stipulates is needed. Thus, taxes and fees must rise enormously at a time three-quarters of energy consumers say they have already done as much as they can to be sustainable, according to a survey of 100,000 people over 20 countries by the research arm of accounting firm Ernst & Young.

In 2021/2022, average annual climate finance flows reached almost  $1.3 trillion , doubling compared to 2019/2020 level of $653 billion driven primarily by a significant acceleration in mitigation finance, particularly in the renewable energy and transport sectors. Mitigation finance was increased by $439 billion from 2019/2020 levels. Despite the increase, current financial flows represent only about one percent of global GDP .  And, those financial flows are already taking a toll on home owners, businesses and consumers via skyrocketing energy costs which flow through the cost of all human endeavors, including agriculture and transportation.

Impact of Climate Rules in Europe

Europe was at the forefront of policies to cut carbon dioxide emissions. The European governments tried to reduce climate price increases by motivating consumers with subsidies. But now these governments are cash-strapped and many are passing their climate policy bill to consumers while scaling back subsidies, phasing in taxes tied to carbon emissions, and implementing rules that require expensive renovations.  Many consumers, including those who broadly supported the energy transition, are unwilling to pay the exorbitant costs. For example, farmers  have protested against plans to remove diesel-fuel subsidies (in most cases negating carbon fees imposed on fuel)  and German households have rebelled against requirements to replace gas boilers.

The host of climate measures enacted years ago when interest rates were low and energy supplies seemed abundant are now taking their toll. Wars in Ukraine and Gaza are forcing Western governments to spend more on defense while higher energy costs and inflation are affecting their residents. French President Emmanuel Macron  suggested Europe might require a “regulatory pause” so its economy can absorb the impact of the Ukraine war, and the European Union has recently trimmed  some of its climate measures .  The United States under President Biden, however, is ramping new programs up to achieve his promises to the U.N.

When Russia invaded Ukraine in early 2022, energy prices in Europe skyrocketed, as natural gas was no longer a cheap commodity from Russia, fueling inflation and driving up costs for companies. Germany, the continent’s economic powerhouse, who had already closed many of its nuclear and coal plants, faced soaring electricity and gas bills , which caused German manufacturers to look elsewhere for cost-effective energy as they were no longer competitive, particularly against Chinese goods made with cheap coal power.  Germans now pay electricity prices 70 percent higher than the European average.

As Germany’s constitutional court ruled that the government could not tap unused funds left in pandemic-era special-purpose funds to cover the energy transition, the government was forced to cut spending by about €60 billion ($65 billion). Germany then had to raise carbon prices, making heating costs and gasoline and diesel more expensive, and introduce an aviation fuel tax for domestic flights and a tax on plastics. It also ended subsidies for grid fees and scrapped a subsidy for buyers of electric vehicles. A tax rebate on diesel fuel used in agriculture was cut as well as incentives to build solar panels and renovate heating systems.

Last year, German lawmakers adopted an experimental policy requiring all new heating systems installed after 2024 to use at least 65 percent renewable energy . In its original form, the law amounted to a de facto mandate to install heat pumps, and it would have entailed catastrophic renovation costs for the owners of many older buildings. The law proved so controversial that even some of the establishment press criticized it. Robert Habeck, the Green Party minister behind the plan, had to modify the legislation , but it still contained many complex subsidies and exceptions . Habeck told a town hall that the original law “was honestly a test of how far society is prepared to go in terms of climate protection when it becomes a reality. And I went too far.” He said the plan’s mandates will be eased because public anger “would probably have ended up knocking the entire climate protection program off its feet.” Not surprisingly, these mandates and the public backlash were for a policy that would only reduce German carbon dioxide emissions over the next six years by the same amount as China emits in a single day.

France passed climate legislation in 2021 that, starting this year, barred homes from the rental market if they scored low on energy-efficiency inspections. One apartment owner found he would need to spend €25,000 ($27,000) for renovations to the heating system, windows and insulation to meet the new requirements. Because the resulting thickened walls would cut into the square-footage of the apartment, lowering its value, the homeowner decided to sell the apartment at a lower value, losing a portion of his investment. These are the type of problems occurring when heady ideas composed in office buildings confront the reality of the lives of people.

Impact of Climate Measures on U.S. Consumers

Households are getting hit with the ballooning costs of building or upgrading electrical grids and other critical infrastructure to support the energy transition. Electric rates under California utility Pacific Gas and Electric (PG&E) have increased 127 percent in the past decade along with surging costs for  wildfire prevention  and grid upgrades. Nearly a quarter of the utility’s customers are now delinquent on their bills. A state law that makes higher-income people pay more for their electricity than their actual demand to subsidize lower income residents has split the state’s clean-energy community.

California homeowners and small businesses seeking to install solar panels are running up against new metering rules that cut by roughly three-quarters the amount of money they can get for selling electricity back to the grid. The original net metering system was helping wealthier households who could afford solar panels, with less fortunate residents having to pay for transmission and distribution costs that were not being covered. California, which expects to run on 100 percent renewable energy by 2045, generates much more solar power than its electric grid can handle during the day. The state’s change to the metering rules is an attempt to spread the cost of grid development and push homeowners to install expensive batteries to store excess power. As a result, new rooftop solar installations in the state plummeted 75 percent , and an estimated 17,000 workers at companies that put panels on rooftops have been laid off.

Illinois, which is requiring 50 percent of its electricity to be renewable by 2030, had its power regulator reject grid-improvement plans from two utilities, stating the state’s households should not be “unfairly asked to shoulder undue costs tied to the state’s energy transition.” The CEO of one of Illinois’ utilities, Exelon, protested because the requirement “is going to cost money.” The question is who is going to pay. If the state does not, utilities could go out of business, thereby transmitting no power to residents, who expect lights to go on 24/7, as needed.

The transition to renewable energy was sold as being cost-effective as wind and solar power have no resource cost. Home owners are finding that to be a myth as those intermittent sources require expensive back-up power in the form of batteries that are fueled by excess wind and solar power should the sun shine and the wind blow and the addition of miles of transmission lines to get the power from remote sites to demand centers.  The costs for battery back-up and transmission lines are just beginning. Those costs were hidden from consumers, who believed the rhetoric. Now, the spiraling energy costs from the transition are becoming known and will only grow, despite the rhetoric from politicians. To stop the exponential spending needed, consumers need to inform their politicians of the spiraling costs that they do not want to pay and the inconveniences they are experiencing, particularly as President Biden is pushing the United States into renewable power and electric vehicles at a frantic pace.

California,

green energy,

OPEC Plus Will Continue to Cut Oil Production into 2025

• Enter your email address *

Don’t miss out on the latest news updates from IER’s team of energy experts.

Get Updates From IER

Create an account

Create a free IEA account to download our reports or subcribe to a paid service.

Executive summary

• Forecast summary
• Recent trends and policy update
• Outlook to 2027

Cite report

IEA (2022), Renewables 2022 , IEA, Paris https://www.iea.org/reports/renewables-2022, Licence: CC BY 4.0

Share this report

• Share on Twitter Twitter
• Share on Facebook Facebook
• Share on LinkedIn LinkedIn
• Share on Email Email
• Share on Print Print

Report options

Energy security concerns and new policies lead to largest ever upward revision of iea’s renewable power forecast.

The first truly global energy crisis, triggered by Russia’s invasion of Ukraine, has sparked unprecedented momentum for renewables. Fossil fuel supply disruptions have underlined the energy security benefits of domestically generated renewable electricity, leading many countries to strengthen policies supporting renewables. Meanwhile, higher fossil fuel prices worldwide have improved the competitiveness of solar PV and wind generation against other fuels. 

Total renewable electricity capacity additions, 2001-2027

Renewable capacity expansion in the next five years will be much faster than what was expected just a year ago. Over 2022-2027, renewables are seen growing by almost 2 400 GW in our main forecast, equal to the entire installed power capacity of China today. That’s an 85% acceleration from the previous five years, and almost 30% higher than what was forecast in last year’s report, making it our largest ever upward revision. Renewables are set to account for over 90% of global electricity capacity expansion over the forecast period. The upward revision is mainly driven by China, the European Union, the United States and India, which are all implementing existing policies and regulatory and market reforms, while also introducing new ones more quickly than expected in reaction to the energy crisis. China’s 14th Five-Year Plan and market reforms, the REPowerEU plan and the US Inflation Reduction Act are the main drivers of the revised forecasts. 

Upward revisions to renewable capacity expansion forecasts from Renewables 2021 to Renewables 2022

Renewables will transform the global power mix through 2027, becoming the largest source of electricity.

Renewables become the largest source of global electricity generation by early 2025, surpassing coal. Their share of the power mix is forecast to increase by 10 percentage points over the forecast period, reaching 38% in 2027. Renewables are the only electricity generation source whose share is expected to grow, with declining shares for coal, natural gas, nuclear and oil generation. Electricity from wind and solar PV more than doubles in the next five years, providing almost 20% of global power generation in 2027. These variable technologies account for 80% of global renewable generation increase over the forecast period, which will require additional sources of power system flexibility. Meanwhile, the growth of dispatchable renewables including hydropower, bioenergy, geothermal and concentrated solar power remains limited despite their critical role in integrating wind and solar PV into global electricity systems. 

Global electricity generation by technology, 2015, 2021 and 2027

Solar PV’s installed power capacity is poised to surpass that of coal by 2027, becoming the largest in the world. Cumulative solar PV capacity almost triples in our forecast, growing by almost 1 500 GW over the period, exceeding natural gas by 2026 and coal by 2027. Annual solar PV capacity additions increase every year for the next five years. Despite current higher investment costs due to elevated commodity prices, utility-scale solar PV is the least costly option for new electricity generation in a significant majority of countries worldwide. Distributed solar PV, such as rooftop solar on buildings, is also set for faster growth as a result of higher retail electricity prices and growing policy support to help consumers save money on their energy bills. 

Share of cumulative power capacity by technology, 2010-2027

Global wind capacity almost doubles, with offshore projects accounting for one-fifth of the growth. Over 570 GW of new onshore wind capacity are forecast to become operational over the 2022-27 period. However, onshore wind additions will only break their annual record, set in 2020, by the end of the forecast period because of lengthy permitting procedures and lack of improvements to grid infrastructure. Offshore wind growth accelerates globally, while Europe’s share of installed offshore capacity declines from 50% in 2021 to 30% in 2027 as China’s provincial policies support faster expansion and the United States becomes a sizeable market at the end of the forecast period.

Improved policies can narrow the gap to net zero by 2050

Our accelerated case shows global renewable capacity can expand by an additional 25% compared with the main forecast if countries address policy, regulatory, permitting and financing challenges. Most advanced economies face challenges to implementation, especially related to permitting and grid infrastructure expansion. In emerging economies, policy and regulatory uncertainties still remain major barriers to faster renewable energy expansion. Finally, in developing economies, weak grid infrastructure and a lack of access to affordable financing hamper the timely commissioning of projects in our main forecast. Should countries address those challenges, global renewable capacity could expand by almost 3 000 GW. This faster increase would significantly narrow the gap on the amount of renewable electricity growth that is needed in a pathway to net zero emissions by 2050.

Renewable capacity growth in the main and accelerated cases, 2010-2027

Russia’s invasion of ukraine is a turning point for renewables in europe.

The war is expediting Europe’s clean energy transitions . The energy crisis hit the EU while it was already discussing ambitious renewables targets under the Fit for 55 package. After Russia invaded Ukraine in February 2022, energy security emerged as an additional strong motivation to accelerate renewable energy deployment. At the EU level, the European Commission’s REPowerEU plan released in May 2022 proposes ending the bloc’s reliance on Russian fossil fuels by 2027. Among other goals, the plan aims to increase the share of renewables in final energy consumption to 45% by 2030, exceeding the 40% previously under negotiation.

Europe’s renewable electricity expansion doubles over the 2022-2027 period as energy security concerns add to climate ambitions. Many European countries passed or proposed action plans to further raise their ambitions, increased policy support and addressed non-financial challenges. Our forecast for growth in the EU has been revised upward significantly (by 30%) from last year’s report, led by Germany (50% higher) and Spain (60% higher). Germany has increased renewable electricity targets, introduced higher auction volumes and improved remuneration for distributed PV while reducing permitting timelines. Spain has streamlined permitting for solar PV and wind plants, and increased grid capacity for new renewable energy projects.

Renewable capacity growth outside of China, main and accelerated cases, 2010-2027

Sluggish growth of renewables in the transport and heating sectors holds back higher renewable energy penetration in the EU. In our main case, renewables’ share of transport energy demand expands from 9% in 2020 to 15% in 2027, which is not in line with the EU’s aspirations for 2030. While demand for electric vehicles and biofuel expands, state and EU-level incentives to meet higher renewable shares are not in place in most cases. For heating and cooling, the annual increase in the share of renewables would need to almost quadruple from historical and forecasted growth to be on track with the REPowerEU plan targets.

Policy improvements can drastically increase renewables expansion and put the European Union in line with REPowerEU goals. Our main forecast falls short of the modelled goals of REPowerEU plan for all sectors. For electricity, in order to reach the installed capacity needed to generate 69% of electricity from renewables by 2030, average annual net additions need to be 30% higher for solar PV and more than twice as high for wind. Faster acceleration of wind and solar PV would require EU member states to reduce permitting and licensing timelines, extend auction schemes with clear schedules, redesign auctions to reflect the increasing cost of renewables and their energy security benefits, and improve incentive schemes for distributed solar PV generation. If EU governments rapidly implement these changes, the accelerated case sees growth 30% higher, putting the EU on track with its more ambitious REPowerEU modelled goals. For transport, countries would need to implement more ambitious transport decarbonisation programmes, including both biofuels and EVs. In the accelerated case, renewable energy’s share in transport climbs to 20% by 2027, narrowing the gap with the EU goal of 29% by 2030. For heating and cooling, accelerating the rollout of heat pumps will require overcoming high upfront costs through incentives, regulations and low-cost financing for households to facilitate investment. 

Renewable heat progress summary in the European Union, 2020-2030

Renewable electricity progress summary in the european union, 2020-2030, renewable transport progress summary in the european union, 2020-2030.

Market interventions must shelter citizens from high costs but without hurting the business case for new renewable energy investments. In October 2022, the European Council passed emergency regulations to protect vulnerable customers from high energy prices, including windfall profit levies on electricity generators. While there is strong rationale behind these interventions, their impact needs to be assessed in terms of the potential harm to renewable developers’ capacity to invest in new projects. Current and proposed market interventions in Europe (such as wholesale market caps and windfall-profit taxes) could create uncertainties for renewable energy investments if they are not well designed or co-ordinated across countries. Moreover, the ongoing energy crisis has also sparked new discussions within the European Union concerning possible future electricity market design. These proposed reforms could, in principle, boost market-driven renewable energy deployment, ensure energy security and encourage investment in flexibility resources. However, it is important that any proposals be carefully and transparently prepared, with clear visibility on timing and involving all relevant stakeholders, in order to avoid unintended uncertainty among investors.

China, the United States and India all double their renewable capacity expansion in the next five years, accounting for two-thirds of global growth

China is forecast to install almost half of new global renewable power capacity over 2022-2027, as growth accelerates in the next five years despite the phaseout of wind and solar PV subsidies. Policy guidelines and targets in China’s new 14th Five-Year Plan on renewable energy are the basis for this year’s 35% upward revision on last year’s forecast. Very ambitious new renewable energy targets, market reforms and strong provincial government support provide long-term revenue certainty for renewables. In most Chinese provinces, utility-scale renewables are cheaper than regulated coal electricity prices, driving rapid adoption. In the main forecast, China is expected to reach its 2030 target of 1 200 GW of total wind and solar PV capacity five years in advance.

In the United States, the Inflation Reduction Act is providing unprecedented long-term policy visibility for wind and solar PV projects. Passed in August 2022, the legislation extended tax credits for renewables until 2032. In addition, 37 out of 50 states have renewable portfolio standards and goals supporting expansion. By 2027, US annual wind and PV capacity additions double compared with 2021. Given that the United States now has clear long-term policy visibility, any remaining forecast uncertainties relate to supply chain constraints, trade measures, grid infrastructure inadequacy and long permitting lead times.

In India, new installations are set to double over our forecast period, led by solar PV and driven by competitive auctions implemented to achieve the government’s ambitious target of 500 GW of non-fossil capacity by 2030.

New policies in the United States and India can lead to more diversified global solar PV manufacturing

Solar PV manufacturing investment in India and the United States is expected to reach almost USD 25 billion over 2022-2027, a sevenfold increase compared with the last five years. India’s Production Linked Incentives (PLI) initiative closes nearly 80% of Indian manufacturers’ investment cost gap with the lowest-cost manufacturers in China. Meanwhile, fully monetising manufacturing tax credits in the United States could bring all segments of PV manufacturing to cost parity with the lowest-cost manufacturers. In addition to manufacturing subsidies, tariffs on imported PV equipment and local-content premiums encourage project developers to purchase domestically manufactured products in both India and the United States. 

China's share of production capacity by market segment, 2021 and 2027

Total investment in solar pv manufacturing capacity by country and region, 2016-2027.

The global solar PV supply chain is diversifying, but China will continue to dominate manufacturing. Despite growing investment in the United States and India, China is forecast to invest USD 90 billion over the forecast period, more than triple the expected investment by the rest of the world combined. China’s share in global manufacturing capacity could decrease slightly, from 80‑95% today to 75-90%, depending on the manufacturing segment. Furthermore, if countries maintain trade policies that limit imports and favour domestically produced PV products, greater geographical distribution of production could result in China’s share shrinking more significantly to 60-75% by 2027 depending on the segment. At the same time, investment plans also indicate supply significantly exceeding expected global PV demand even in the most optimistic forecasts by 2027. In the absence of faster growth in global demand, this could result in plant utilisation factors as low as half today’s levels for all manufacturing segments in China. 

Policy efforts are turning hydrogen production from wind and solar PV into a new growth area

Global renewable capacity dedicated to producing hydrogen increases 100-fold in the next five years, offering opportunities to decarbonise industry and transport. Policies and targets introduced in more than 25 countries across all continents are expected to result in 50 GW of wind and PV capacity focused on producing hydrogen over the 2022-2027 period. This expansion is geographically diversified, with China leading the growth, followed by Australia, Chile and the United States. Together, these four markets account for roughly two-thirds of dedicated renewable capacity for hydrogen production. While renewable capacity dedicated to hydrogen accounts for only 2% of our main forecast, the share is significantly higher at 13% in the Middle East and North Africa and 5% in Latin America because of export opportunities. 

Total renewable capacity dedicated to hydrogen production in the main case by region, 2021-2027

Total renewable capacity dedicated to hydrogen production in the main and accelerated case globally, 2021-2027, climate and energy goals underpin robust biofuels forecast.

Total global biofuel demand expands by 35 000 million litres per year (MLPY), or 22%, over 2022-2027 in the main forecast. The United States, Canada, Brazil, Indonesia and India make up 80% of global expansion in biofuel use, as all five countries have comprehensive policy packages that support growth. Renewable diesel is expected to lead the global expansion for the first time mainly, driven by policies designed to reduce greenhouse gas emissions in advanced economies. Biojet fuel demand expands significantly to 3 800 MLPY in our main forecast – 35 times the 2021 level – to account for nearly 1% of total jet fuel consumption. Recent US tax incentives and the EU’s ReFuelEU target propel most of the growth in biojet fuel. Meanwhile, rising ethanol and biodiesel use occurs almost entirely in emerging economies as they aim to reduce oil imports while benefiting the local economy by using indigenous resources.  

Waste and residues are a key growth area for biofuels but require action to prevent a supply crunch

One-third of new biofuels production is set to come from waste and residues by 2027. Transport greenhouse gas reduction policies in Europe and the United States are fuelling global demand for waste and residues. The United States’ Inflation Reduction Act drives a 20% increase in our biojet and renewable diesel forecast. The policy rewards lower greenhouse gas intensity fuels, driving biofuel producers to focus on waste and residues. In Europe, the existing Renewable Energy Directive and member state policies reward biofuels made from waste and residues. Most biofuel growth in Europe is also for renewable diesel and biojet. Singapore and China are also expanding renewable diesel and biojet production from waste and residues to serve the European and US markets. 

Global biofuel production growth by feedstock type in the main case, 2022-2027

Global biofuel production by feedstock type in the main case, 2010-2027.

Unprecedented demand growth is straining supply chains, but government policies and innovation may yet provide relief. Demand for waste and residue oils and fats is expected to nearly exhaust supplies of the most readily available sources by 2027. In advanced economies, supply limits are prompting biodiesel, renewable diesel and biojet producers to secure conventional vegetable oils such soybean oil and rapeseed oil. Vegetable oil supplies dedicated to biofuel production expand to 23% from 17% over the forecast period. However, higher prices due to strong demand will prompt companies and governments to improve feedstock supply chains, seek out new supplies and develop new techniques. Policies and innovation can also help unlock untapped supplies and support technology development, enabling the use of more widely available feedstocks for sustainable biofuel production.

Heating with renewables grows but not fast enough to contain fossil fuel use

Modern renewable consumption for heating purposes is expected to increase by almost one-third during 2022-2027, raising the modern use of renewables in heat from 11% to 14% by 2027. Renewable heat currently benefits from policy momentum, in particular in the European Union, in response to the energy security concerns fuelled by the current energy crisis. In both the industry and buildings sectors, the combination of rising shares of renewables in the power sector and greater reliance on electricity for heating, including through heat pumps, makes the largest contribution to renewable heat uptake. Nevertheless, renewable heat developments are insufficient to contain fossil fuel-based heat consumption.

Subscription successful

Thank you for subscribing. You can unsubscribe at any time by clicking the link at the bottom of any IEA newsletter.

Delivering hydrogen to EU's industry: Which are the greenest options?

R enewable hydrogen is expected to play a crucial role in reducing carbon emissions in Europe. Previous Joint Research Centre (JRC) research revealed that sourcing it from regions with cheaper renewable energy can prove to be more cost-effective than local production.

However, environmental concerns arise from transporting large quantities of hydrogen over long distances, as the environmental impact varies significantly according to the production technology and the method of delivery.

To address these concerns, a new study compares the life cycle environmental impacts of on-site production through steam methane reforming (SMR) or electrolysis with three different delivery methods, including compression, liquefaction, and chemical bonding to other molecules. Transportation by both ship and pipeline was considered.

The distance used to compare the different methods of delivery is 2,500 km, compatible with the extent of EU territory and equivalent to the distance between Portugal and the Netherlands. The two countries were considered based on a proposal in a project that examined the feasibility of sustainable hydrogen transportation.

The results show that the environmental performance of hydrogen supplied to large industries can vary significantly based on the production technology and delivery pathway.

The study was carried out by the JRC for the Clean Hydrogen Partnership, a public-private partnership supporting research and innovation (R&I) activities in hydrogen technologies in Europe. The findings result in key recommendations for policymakers and stakeholders to help countries and industries to accelerate the transition towards a more sustainable hydrogen economy.

On-site production versus long-distance delivery

The most environmentally sustainable approach is on-site production using efficient renewable sources, such as wind power in the Netherlands. If on-site production is not viable using local abundant renewable sources, importing renewable hydrogen can still lead to a significant reduction in greenhouse gas (GHG) emissions compared to on-site production with fossil fuels. However, focusing solely on GHG emissions may lead to other, unintended environmental impacts.

Shipping liquid hydrogen and transporting compressed hydrogen through pipelines appear to have the least environmental impact when delivering hydrogen over long distances.

Meanwhile, the process of packing and unpacking hydrogen into chemical carriers such as ammonia, liquid organic compounds, methanol, and synthetic natural gas demands larger amounts of energy and resources. It makes these options less desirable to minimize environmental impact. But no significant difference was noticed in comparative environmental impact of delivery methods when comparing chemical carriers one with another.

Role of renewable energy infrastructure

The report emphasizes the close relationship between the environmental impact of delivered hydrogen and renewable energy infrastructure.

For imported solar-generated hydrogen to have an environmental advantage over conventional hydrogen production from fossil fuels, the environmental impact of generating electricity through photovoltaic panels must be significantly reduced.

This can be achieved by improving the efficiency of photovoltaic panels in terms of materials use and utilizing renewable energy for their production.

Impact of water use

Water use is another crucial factor to consider. The availability of freshwater affects the impact of hydrogen production. On-site hydrogen generation in water-rich countries proves to be a more sustainable option in terms of water use compared to importing hydrogen from water-scarce nations.

Hydrogen loss

Hydrogen losses during the delivery chain can significantly increase the environmental impact of delivered hydrogen. However, options that are more susceptible to losses, such as liquid and compressed hydrogen, still have lower environmental impacts than using hydrogen carriers.

When on-site production of hydrogen using local renewable sources is not feasible, importing renewable hydrogen from closer regions becomes the more environmentally sustainable choice. When transporting hydrogen over long distances within Europe, delivering compressed hydrogen through pipelines or liquid hydrogen via ships stands out as the preferred option in terms of environmental impact.

More information: Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe. publications.jrc.ec.europa.eu/ … ory/handle/JRC137953

Provided by European Commission, Joint Research Centre (JRC)

wn0sdwk000IT6

• Press releases
• China renewables overseas expansion

Get in touch

• Sonia Kerr [email protected] +44 330 174 7267
• Kevin Baxter [email protected] +44 408 809922
• Vivien Lebbon [email protected] +44 330 174 7486
• Mark Thomton [email protected] +1 630 881 6885
• Hla Myat Mon [email protected] +65 8533 8860
• BIG Partnership [email protected] UK-based PR agency

China’s renewable exports grow by 35% between 2019-2023

Energy batteries surpass solar modules as primary renewable commodity export

1 minute read

• LinkedIn LinkedIn Share on LinkedIn
• Facebook Facebook Share on Facebook
• Twitter Share on Twitter
• Email Share by email

Chinese renewable product exports grew 35% from 2019 to 2023, driven by competitive prices and production capacity domination, according to the new ‘Looking overseas’ report from Wood Mackenzie. 

Energy batteries surpassed solar modules and became China’s primary renewable energy commodity export over the last four years. In the same time period, wind and solar project investment increased by 26%, and accounted for 39% of total Belt and Road projects in 2023.

Chinese renewable energy companies are actively looking for global business opportunities, according to the report. Renewable energy investors tend to invest in markets with high power demand, stable business environments and predictable revenue streams. Meanwhile, Chinese manufacturers are targeting markets with local content requirements to become regional manufacturing hubs. 

“Renewable energy is favoured by Chinese developers in near-term overseas investment compared to other conventional power generating technologies. More than a hundred wind and solar projects have been developed in the Belt and Road market in the past decade,” said Xiaoyang Li, Director APAC Power & Renewables Research at Wood Mackenzie. 

Integrated supply chains, rapidly declining prices, and a high standard of performance have enabled China-based renewable manufacturers to supply more than 65% of the total global demand, and Wood Mackenzie expects this trend to continue.

Low manufacturing costs have supported China-based renewable manufacturers in offering attractive prices, which are up to 200% lower compared to Western players in the major competing markets. The report found that prices for non-Chinese products are double those of comparable China-made equipment. 

“Benefitting from a robust domestic supply chain, equipment produced by Chinese manufacturers overseas remains price-competitive despite an uplift due to inflation uncertainty and higher production costs,” Li said.   

According to the report, interest in overseas renewable project investment by Chinese companies is increasing, but progress is slow due to high development risks and uncertain revenue flow.  

Li added: “Backed by strong equipment supply chains from Chinese manufacturers, Chinese solar and storage investors prefer greenfield investment when looking for overseas opportunities. Meanwhile, wind power investors tend to acquire existing assets, considering long construction periods and high development risks.” 

Markets with high power demand, stable business environments and predictable revenue streams are favoured by Chinese investors, but geopolitical issues are also encountered in these markets. 

Related content

End of the road for china’s teapots - asia's swing producers.

We aim to identify the marginal refinery configuration in Asia so that we can correctly forecast our short-term product prices, margins, throughputs and trade balances. In our assessment, China’s teapot refiners are marginal swing producers because of their scale and weak margins. Teapots are private refiners in China that are not owned by Chinese NOCs. In our estimate, Chinese teapots account for over a quarter of China’s refining capacity. After a period of good margins in the last few years, teapot margins are expected to fall due to lower crude discounts and lower product value realisation. With this view on margins, we forecast a decline in teapot crude processing, which also affects our views on China’s product exports and Asia’s overall regional balances. The trend of lower margins coupled with China’s strict policy on promoting the high-quality development of green innovation in the refining industry will force many teapots to close in the longer term.

What's included

This report contains:

End Of Road For China’S Teapots Asia's Swing Producers.pdf

PDF 1.30 MB

You can pay by card or invoice

Already have a subscription? Sign In

China’s zonal gas transmission tariff: changes and implications

Can global metallurgical coal markets maintain momentum through the winter chill.

As China’s winter anti-pollution policies bring metallurgical coal prices off the boil, we assess whether events in China, and simmering demand elsewhere, will be enough to keep the market energised in 2018.

Met Coal webcall Oct 2017.pdf

PDF 1.11 MB

China economic focus April 2024: what does a strong Q1 mean?

The Chinese economy grew by 5.3% year-on-year in Q1 2024, a surprise to the upside. Better-than-expected industrial activity was the main reason for the outperformance in Q1, but we do not think the momentum will last through the whole year. The green economy led growth in Q1. Renewable installations beat expectations, while electric vehicle (EV) production remained strong. The construction sector remained a drag. Infrastructure construction slowed due to project suspension in 12 provinces, and the property sector remained unresponsive to policy support.

PDF 1.02 MB

Global iron ore short-term outlook May 2024

A steel production uptick in China and additional economic support measures have bolstered the ferrous markets. The 62% Fe fines CFR China price averaged US$117.5/t in May 2024 (+5.9% or +US$6.5/t month-on-month), trading between US$115 and US$120/t. Although total port inventories have reached a new record high for the year, iron ore prices remain resilient. Nevertheless, China faces an increasingly challenging environment this year, with tough conditions in the crucial property market despite recent stimulus measures.

China Iron Ore Imports, April 2024 Data.pdf

PDF 273.26 KB