Learn how turning toward cleaner energy sources means factoring in economic and energy needs alongside environmental ones. Contact online >>
Learn how turning toward cleaner energy sources means factoring in economic and energy needs alongside environmental ones.
If you want to be eco-friendly, you should be driving an electric car. Right?
Unfortunately, it is not as simple as that. While electric cars do not pollute the air around them like a combustion engine does, they do need to be charged, leading to questions such as what energy source the electricity is coming from and whether that energy source is clean.
The overall evaluation of an energy source is based not only on how clean it is; it also has to be reliable, accessible, and affordable. Not all of these factors can be categorized neatly. For example, petroleum tends to be relatively affordable in the United States, but that is in part because the government subsidizes fossil fuel industries. Similarly, while wind energy tends to be relatively expensive, its cost has been steadily declining for years as its use increases.
To evaluate the options available, understanding fundamental facts about what types of energy are available and what trade-offs each presents is helpful.
There are three main categories of energy sources: fossil fuel, alternative, and renewable. Renewable is sometimes, but not always, included under alternative.
Fossil fuels formed over millions of years ago as dead plants and animals were subjected to extreme heat and pressure in the earth''s crust. This natural process converted bones and other organic matter into carbon-rich substances that, when burned, generate energy. There are three main fossil fuels.
Fossil fuels are often called dirty energy sources because using them comes at a high—and often irreversible—cost to the environment. Carbon emissions, or the amount of carbon dioxide these fuels release into the atmosphere, add up over generations and cannot be taken back. Moreover, there is only a finite amount of these resources on earth.
Forms of energy not derived from fossil fuels include both renewable and alternative energy, terms that are sometimes used interchangeably but do not mean the same thing. Alternative energy broadly refers to any energy that is not extracted from a fossil fuel, but not necessarily only from a renewable source. For example, nuclear power generation most commonly uses uranium, an abundant but not technically renewable fuel. Renewable energy, on the other hand, includes sources such as sun and wind that occur naturally and continuously.
There are five main renewable and alternative fuels.
Renewable and alternative energy sources are often categorized as clean energy because they produce significantly less carbon emissions compared to fossil fuels. But they are not without an environmental footprint.
Hydropower generation, for example, releases lower carbon emissions than fossil fuel plants do. However, damming water to build reservoirs for hydropower floods valleys, disrupting local ecosystems and livelihoods. In another case, biofuels are renewable but are cultivated on huge swaths of land and sometimes generate more carbon emissions than fossil fuels do.
Other considerations such as safety also matter. The likelihood of a meltdown at a nuclear facility is exceedingly small, but if one were to occur, the results would be catastrophic. In fact, concerns about the dangers associated with operating nuclear power plants have limited the expansion of nuclear energy.
In 2018, more than 81 percent of the energy countries produced came from fossil fuels. Hydroelectricity and other renewable energy (14 percent) and nuclear energy (about 5 percent) accounted for the remainder. But not all countries consume energy at the same levels. For example, the United States, China, and European Union countries combined were responsible for half of the world''s total coal, natural gas, and oil consumption in 2018. Nor do all countries use the same mix of fuels. Norway primarily uses hydroelectric power, for example, but in Saudi Arabia oil reigns supreme. When choosing which types of energy to use, countries balance their economic needs with environmental concerns.
Climate change has added new considerations and urgency to the decisions countries make about their energy sources.
Developing countries have different needs than developed countries—and they face a different set of energy challenges as consequences of climate change become more severe. Many developing countries are going through industrialization, the development of factories and mass production, which requires large amounts of energy. Some of these countries see fossil fuels as the best way to achieve those energy goals, though many are turning to alternative energy sources as well—seeing them as the future of energy consumption.
In 2015, 196 countries pledged to increase their use of clean energy as part of the Paris Agreement, an international treaty that allowed signatories to set their own goals for lower carbon emissions. As countries around the world push to adopt more clean energy sources, they will increasingly contend with the environmental and economic trade-offs that renewable sources present and the reality that opting for clean over dirty energy is not such a simple choice after all.
IEA (2024), Renewables 2024, IEA, Paris https://, Licence: CC BY 4.0
Renewable energy consumption in the power, heat and transport sectors increases near 60% over 2024-2030 in our main-case forecast. This increase boosts the share of renewables in final energy consumption to nearly 20% by 2030, up from 13% in 2023. Electricity generation from renewable energy sources makes up more than three-quarters of the overall rise, owing to continued policy support in more than 130countries, declining costs and the expanding use of electricity for road transport and heat pumps.
Renewable fuels, including liquid, gaseous and solid bioenergy as well as hydrogen and e-fuels, account for near 15% of the forecast growth in renewable energy demand. These fuels expand the quickest in areas not amenable to electrification (e.g. the aviation and marine sectors) and offer energy access in rural areas and in industries with readily available biomass (e.g. sugar and ethanol, and pulp and paper). Other renewable energy, such as solar thermal and geothermal, accounts for the remaining 10% of growth.
In the electricity sector, the renewable energy share is forecast to expand from 30% in 2023 to 46% in 2030. Solar and wind make up almost all this growth. This rapid expansion has a spillover effect, helping decarbonise other sectors in which power is used for industrial processes, heating buildings and charging electric vehicles. Renewable electricity is also used to produce renewable hydrogen destined for use in materials, chemicals and for power production which accounts for near three-quarters of renewable hydrogen demand in 2030 in our main case.
As a result, renewable electricity is also the primary source of renewable energy expansion in the heat and transport sectors. The share of renewables in heat demand climbs to nearly 20% of the total, supplied by solid and gaseous bioenergy, solar thermal and geothermal energy, and ambient heat. In the transport sector, the renewable energy share climbs to 6% of total demand as liquid biofuel consumption expands in the road, aviation and marine segments, with a small contribution from hydrogen and e-fuels.
Global renewable electricity generation is forecast to climb to over 17000TWh (60EJ) by 2030, an increase of almost 90% from 2023. This would be enough to meet the combined power demand of China and the United States in 2030. Over the next six years, several renewable energy milestones are expected to be reached:
In 2030, renewable energy sources are used for 46% of global electricity generation, with wind and solar PV together making up 30%. By 2030, however, solar PV becomes the foremost renewable electricity source, followed by wind, both surpassing hydropower.
In 2030, variable renewables account for two-thirds of global renewable electricity generation, rising from less than 45% today. Over the forecast period, the share of solar PV in meeting global power demand triples while wind almost doubles and the role of hydropower becomes less prominent. Hydropower generation is still expected to grow globally as new projects become operational, mostly in emerging and developing countries, but the technology''s share in total power generation declines slightly.
The share of other renewables, including bioenergy, concentrated solar power and geothermal energy, remains unchanged at less than 3%. As variable renewables account for 90% of the global renewable generation increase over the forecast period, additional sources of power system flexibility will be required. Meanwhile, bioenergy, geothermal and concentrated solar power expansions remain limited despite their critical role in integrating wind and solar PV generation into electricity systems around the world.
In the next six years, renewable energy demand in the transport sector is set to increase 3.0EJ, double the 1.5EJ increase of 2017-2023. Growth also becomes more diverse, with renewable electricity, aviation biofuels, marine biofuels, hydrogen and e-fuels emerging to complement increased biofuel use for road transportation. While biofuel use for road transport made up nearly 90% of growth in renewable transport demand during 2017-2023, over the next six years this share drops to 33% with the remainder comprising renewable electricity (50%), aviation and maritime biofuels (10%), and hydrogen and e-fuels (7%).
Renewable shares of transport energy demand are rising globally, but regional trajectories differ. In the United States, Europe and China, renewable electricity makes up most new renewable transport demand, as electric vehicle stocks expand, powered by growing shares of renewable electricity. In contrast, road biofuel demand is levelling off in these regions.
In the United States and Europe, biofuel support policies persist, but rising electric vehicle use and vehicle efficiency are reducing overall transport fuel demand, thereby limiting the potential for biofuel growth. Nonetheless, new policies for the aviation and marine sectors are boosting biofuel demand in both regions. While biofuel support remains limited in China, in Brazil, India and much of the rest of the world, biofuels remain the dominant source of new renewable transport demand to 2030.
Current renewable energy demand forecasts for the road, marine and aviation subsectors fall short of the IEA Net Zero by 2050 Scenario trajectory. Among these, road transport is the closest to meeting the scenario''s targets, thanks to ongoing and planned biofuel production and the growing adoption of electric vehicles, which are powered increasingly by renewable electricity.
However, the aviation and marine segments currently depend almost entirely on fossil fuels, with renewable fuel projects only beginning to emerge. To align with the Net Zero by 2050 Scenario, biofuel consumption in these sectors must increase from 6% to 20% of global biofuel demand in 2030. Additionally, the use of hydrogen, e‑kerosene, e‑ammonia, and e‑methanol, which is currently negligible, rises to 1.5EJ, representing about 30% of the transport sector''s renewable energy use today.
Heat remains the primary end-use sector, accounting for almost half of global final energy consumption and nearly 40% of energy-related CO2 emissions in 2023. During 2017-2023, annual heat demand expanded 7% (+14 EJ) globally. As modern renewable heat consumption1 represented only half of additional heat demand, annual heat-related CO2 emissions rose 5% during the last six years – almost entirely in the industry sector.
In 2023, high interest rates, inflation, less construction activity in many countries, a return to lower natural gas prices and changing policies transformed the landscape of many renewable heat markets. Heat pumps and solar thermal and geothermal heating systems have low operating costs, but they entail a considerable investment for households, so sales are particularly sensitive to borrowing costs and consumer sentiment.
Last year, new solar thermal installations declined 7%, mainly because of persistent real estate sector challenges in China, the largest market. Positive solar thermal developments in India (+27% year-on-year, encouraged by the easing of financial pressures after the Covid-19 pandemic), Mexico (+5%), Brazil (+3%), the UnitedKingdom(+66%, supported by high energy tariffs), Greece (+10%) and emerging African markets were mostly offset by significant declines in Denmark (-‑25%), Spain (-26%), Germany (-46%), Poland (-38%) and Australia (-8%).
The global heat pump market also stalled in 2023. After robust growth in 2022 owing to high energy prices and policy support in Europe, the United States and China, newly installed capacity was 3% lower in 2023. Air-to-water heat pump sales dropped 10% year-on-year in Japan – one of the most mature heat pump markets – amid high inflation and low consumer spending. Sales of air-to-air heat pumps fell 15% year-on-year in the United States, partly due to rising borrowing costs and consumer hesitation over big-ticket investments. Some US consumers also postponed their purchases in anticipation of upcoming state-administered Inflation Reduction Act rebates for low- and medium-income households, which are expected to become available in 2024 or 2025 depending on the state.
While still the second-best sales level, heat pump purchases in Europe contracted 6.5% year-on-year in 2023, forcing several manufacturers to adjust operations and cut jobs. Contrasting trends were observed across national heat pump markets in Europe, however, with sales rising significantly in Germany (+59%), the Netherlands (+43%) and Belgium (+72%), but contracting sharply in Italy (-44%), Finland (-42%) and Poland (-39%).
Yet, heat pumps continue to gain ground over fossil fuel boilers in Europe, with their market share expanding in almost all countries last year (except Italy, Poland and Finland) to make up almost one-third of heating system sales in 2023. Lower heat pump sales in the United States, Europe and Japan were only partly offset by 12% growth in the Chinese market (the largest one), resulting from renewed construction activity after the lifting of Covid-19 restrictions.
The limited growth of solar thermal capacity and the recent slowdown of heat pump sales emphasises the need for consistent and continued policy support for cash-strapped households to overcome financing challenges. It also highlights the importance of further enhancing heat pump cost-competitiveness by adjusting energy tariffs and taxes to reduce the price gap between electricity and gas, which remains high in many markets. Additionally, alternative business models such as energy service companies (ESCOs), which are currently being developed mainly for medium- and large-scale projects, could play an important role in boosting renewable heat deployment.
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