Renewable Energy Technologies

Technology Analyst: Susan Leiby


Archived Viewpoints

About This Technology

Modern renewable energy technologies have become mainstream in many energy markets because they offer increasingly viable and sustainable alternatives to today's dominant fossil-fuel (coal, oil, and natural-gas) and nuclear technologies. Researchers are making advances in a broad range of renewable technologies for electricity generation, transport fuels, and heating and cooling. Renewable technologies draw on continuously replenished energy resources—including heat and light from the sun, wind, biomass, falling water, heat from inside the earth, and ocean energy. These resources are typically large and dispersed, and their energy is often convertible with little environmental impact and low- and no-carbon emissions.

Renewable energy technologies are making increasingly significant contributions to energy markets. The sector has grown rapidly in the past decade in response to a confluence of critical drivers, including dramatic declines in the costs of renewable energy systems, strong growth in energy demand in developing countries, environmental concerns about pollution and global warming, the desire to increase energy security and diversity, fossil-fuel-price volatility, and technology advances that continue to improve the performance of renewables systems. Stimulating innovation and economic-growth opportunities is also a key driver for renewables. Government policies worldwide continue to play a vital role in helping to advance technologies and lower market barriers. At least 173 countries now provide some type of renewable energy target or support policy, and aggressive policies in countries such as Germany, Japan, and China have proved extremely successful in encouraging deployments. Onshore-wind, biomass, geothermal, and hydropower technologies are already competitive with conventional energy supplies without subsidies in many regions, and solar PV has begun to reach cost parity with grid power in areas with high insolation and high electricity prices. In competitive bidding programs, many developing countries are attracting record low prices and high volumes for renewable energy.

New global investments in renewable power and fuels (excluding large hydro greater than 50 MW) reached a record $286 billion in 2015, despite low fossil-fuel prices and declining costs for solar-PV and wind power, according to Bloomberg New Energy Finance. Developing-economy investments exceeded those of developed countries for the first time. Growth opportunities for renewables producers and distributors depend on specific local conditions—the renewable resource base, government support and energy economics, market factors, and institutional constraints. Both wind and solar energy—the fastest- growing technologies—had a record year in 2015 as a result of falling prices. Grid-connected solar-PV adoptions are accelerating worldwide, creating opportunities for materials, component, and system suppliers for crystalline-silicon PV technology (primarily) but also nonsilicon thin-film technologies. The concentrating-solar-power industry is also expanding in sunny regions of the world, although costs have not dropped as rapidly. Wind-turbine manufacturers and suppliers continue to see strong growth, led by China, and offshore-wind markets are expanding in Europe and elsewhere. Biofuels producers and their suppliers have opportunities to expand in countries that mandate the use of biofuels in transportation fuels—but future growth depends on the commercialization of more sustainable biofuels. Geothermal power and heating markets are poised for growth in at least a dozen countries. Small and large hydropower applications continue to expand to meet energy needs, especially in developing countries, and pumped-hydro energy storage is seeing growing use worldwide to complement other renewable technologies. Ocean-tidal and wave-energy technologies are beginning to reach commercialization and have long-term potential similar to that of hydropower and offshore-wind power. All these technologies have the potential to offer clean new sources of low-carbon energy, provide economic-development opportunities, and improve the standard of living for people in rural areas. As more countries move toward the large-scale use of renewable energy technologies, stakeholders must also assess the economic, environmental, and social trade-offs—such as land-management issues—associated with each technology and implement new grid and distribution technologies to support growth.