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About This Technology

Modern renewable energy technologies are becoming 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. Scientists are making advances in a broad range of renewable technologies for power production, 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, including low- and no-carbon emissions.

Renewable energy technologies are making increasingly significant contributions to energy markets today. The sector has grown rapidly since 2000 in response to a confluence of critical drivers, including strong growth in world energy demand—particularly in developing countries, environmental concerns about pollution and global warming, the desire to increase energy security and diversity, high fossil-fuel prices, and technology advances that are improving the performance and lowering the costs of renewable energy systems. Stimulating the next wave of innovation and new job opportunities is also a key driver for renewables. A large-scale move to renewable energy is still not a certainty, even in a high-oil-price environment. Government policies worldwide continue to play a vital role in helping to advance renewable technologies and lower market barriers. Nearly 120 countries now provide some type of renewable energy–promotion policy, and aggressive policies in countries such as Germany have proved extremely successful. Some technologies, such as large-scale wind, biomass, geothermal, and small hydropower are increasingly competitive without subsidies, and solar-system prices are dropping rapidly. In recognition of these developments, a growing number of large industrial companies, financial institutions, and venture-capital-funded start-ups are rushing to develop market opportunities for renewable energy technologies and in turn are helping to drive down costs even further.

Global revenues for solar-PV, wind-power, and biofuels markets (the three fastest-growing renewables) grew to $246 billion in 2011, a 31% increase from revenues in the previous year. Following the global economic slowdown and struggling financial markets in many countries, renewable energy costs have continued to decline, and growth has picked up pace in many locations. Growth opportunities for renewable energy producers and distributors in both industrialized and developing countries depend on specific local conditions—the renewable energy resource base, government support and energy economics, market factors, and institutional constraints. Grid-connected solar photovoltaic technology is seeing rapid worldwide growth as prices continue to drop and approach grid parity, creating opportunities for materials, component, and system suppliers for both silicon and nonsilicon thin-film technologies. The concentrating solar-power industry is also expanding in sunny regions of the world, after more than 15 years of commercial inactivity. Wind-turbine manufacturers and suppliers continue to see healthy growth, especially in China and offshore wind markets in the United Kingdom and elsewhere. Biofuels producers and their suppliers have opportunities to expand in the United States, Brazil, Europe, China, and other countries that mandate the use of biofuels in transportation fuels—but future growth depends on the development of advanced, more sustainable biofuels. Geothermal power and heating markets are poised for major growth in many countries, and small hydropower applications have significant potential to meet future energy needs, especially in developing countries. 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 embrace the idea of large-scale renewable energy technology use, stakeholders must also recognize and assess the trade-offs—economic, environmental, and social—associated with each technology, such as land-management issues.