Why on earth do we need renewable energy?

Energy generated from naturally replenishing sources such as the sun and wind is called renewable energy. Electricity production, transportation and the heating and cooling of water and air can all be accomplished with renewable energy.

Renewable energy is becoming crucial in combatting climate change and reducing greenhouse gas emissions. The greatest source of human-generated greenhouse gas emissions (the cause of climate change and global warming) is burning fossil fuels for energy.

And renewable energy sources can be used indefinitely, unlike finite and non-renewable fossil fuels.

• Solar power. Solar panels or concentrated solar power devices transform sunlight into electricity, even in cloudy conditions, using photovoltaic (PV) panels or solar radiation concentrator mirrors.
• Wind power. Large wind turbines situated on land, freshwater or seawater capture the kinetic energy of moving air. Wind energy has been used for thousands of years, and while average wind speed fluctuates, its potential surpasses worldwide electricity generation.
• Hydropower. This involves harnessing water power from rivers and reservoirs moving from higher to lower elevations. Water flow produces energy for run-of-river plants, whereas reservoir plants depend on stored water. Small-scale hydropower is often considered the most environmentally friendly option, particularly for serving remote communities.
• Biomass energy. Various organic resources (biomass), including wood, charcoal, dung and other manures, produce heat, power and crops to create liquid biofuels. However, burning biomass releases greenhouse gases into the atmosphere, although less than burning fossil fuels like coal, oil or gas.
• Geothermal energy. This capitalizes on the earth's readily available interior thermal energy. The heat from geothermal reservoirs is obtained via wells or other methods. Natural hydrothermal reservoirs are hot and permeable, and although hot, enhanced geothermal systems require hydraulic stimulation. At the surface, fluids of different temperatures are used to create electricity.
• Ocean energy. Energy generated from seawater's kinetic energy and thermal energy is used to produce electricity or heat. Ocean energy systems are in the early stages of development, and several wave and tidal power prototypes are under investigation. The potential for ocean energy easily exceeds current human energy demands.

Clean energy is our most viable avenue to a sustainable and habitable planet.

Why? Because renewable energy sources are cheap and the most economical option for power production in most parts of the world. The cost of clean energy technologies is falling rapidly (solar power costs dropped by 85% between 2010-2020. By 2030, inexpensive electricity generated from renewable sources could account for 65%  of the world's total electricity supply. Renewable energy should drastically reduce carbon emissions and aid in reducing climate change by decarbonizing 90% of the power sector by 2050. Switching to clean energy minimizes carbon emissions, helping to address climate change, air pollution and health issues.

One of the major advantages of renewable energy is the lack of greenhouse gases and other pollutants. Pollution-free, it doesn’t contaminate the air or water and enables us to lower our reliance on imported fuels and diversify the energy mix. Renewable energy sources are not subject to price volatility or supply disruptions like fossil fuels. And importantly, developing renewable technologies can create new jobs and stimulate local economies.

Although renewable energy sources provide many advantages, there are drawbacks:

• Land use. Certain renewable technologies (e.g., large-scale solar and wind farms) cover a lot of land, which can harm ecosystems and wildlife habitats. Also, installing the infrastructure might lead to removing land and destroying habitats.
• Intermittent supply. Several renewable energy sources are affected by the weather so maintaining a steady supply relies on energy storage devices.
• Transmission and distribution of energy. The infrastructure needed to transfer power to populated regions can demand heavy investment. Renewable energy fluctuation might be too much for the current energy grid to manage.
• Scarce elements. Solar panels and batteries depend on lithium and cobalt. The mining and processing of these materials can affect the environment adversely and can be socially and politically divisive.
• Cost. Although the price of renewable energy has dropped recently, it can still be more expensive than conventional fossil fuel sources, especially for smaller installations. Energy storage devices can also be expensive.

Renewable energy investment reached a peak of $495 billion in 2022, up from $32 billion in 2004. This massive increase in funding demonstrates the renewable energy industry’s growing maturity.

As sustainable and low-carbon investment is becoming increasingly important to investors and corporations, renewable energy is emerging as a significant player in capital markets solutions. Several renewable trading and related instruments have been developed to support and incentivize growth, including:

• Power purchase agreements (PPAs). Contracts allow renewable energy generators to sell their electricity directly to buyers at a fixed price for a set period. This provides revenue certainty and helps to finance new projects. Corporations often use PPAs to meet sustainability goals and procure low-cost renewable energy solutions.
• Green certificates. These tradable instruments represent the generation of one MWh of renewable energy fed into the grid. Certificates can be bought and sold separately from the electricity they represent, allowing buyers to claim they are using renewable energy sources even if they are not physically connected to the relevant source.
• Gas and power. Renewable trading in gas and power markets enables participants to buy and sell renewable energy in the form of natural gas or electricity. Renewable natural gas comes from organic waste, and renewable electricity is generated from wind, solar or hydropower.
• Freight. Renewable trading in freight involves transporting biofuels or equipment necessary for renewable energy projects, such as wind turbines, solar panels and so on.
• Weather. Renewable trading in weather uses derivatives to manage the risks associated with power production, like low wind speeds for wind power generators or cloud cover for solar power generators.
• Carbon trading. A market-driven strategy aimed at mitigating greenhouse gas emissions. It establishes a cost for carbon emissions, enabling companies to trade emissions permits. Firms that produce less than their allowance sell unused permits to those that exceed their allowance, creating a financial incentive for companies to lower their emissions.
• Green bonds. Bonds are issued to finance environmentally sustainable projects, including renewable energy projects. Usually, governments, financial institutions and corporations issue green bonds.

The development and adoption of renewable energy systems have become a priority for governments worldwide, with many implementing policies such as:

• Feed-in tariffs. Feed-in tariffs involve long-term contracts that guarantee renewable energy producers a fixed price for their electricity. This incentivizes investors and developers to support renewable energy projects.
• Renewable energy targets. Governments determine the amount of energy that should come from renewable sources by a specific date. Targets help drive investment in renewable energy and establish a long-term vision for the power sector.
• Net metering. Individuals and businesses with renewable energy systems can sell excess electricity back to the grid, reducing their energy bills.
• Renewable portfolio standards (RPS). RPS policies require electricity suppliers to deliver a percentage of their energy from renewable sources by a given date. This provides a market for renewable energy and helps drive demand.
• Tax credits. Governments can offer renewable energy tax credits to individuals or businesses that invest in the clean energy revolution.
• Carbon pricing. Carbon taxes or cap-and-trade systems put a price on carbon emissions, making burning fossil fuels more expensive and incentivizing users to switch to renewable sources of energy.
• Green energy certificates. These tradable certificates prove an amount of renewable energy has been produced. Certificates can be sold to companies or individuals who want to offset their carbon emissions.

Countries use various combinations of these policies, depending on their circumstances and energy goals.

Completed in 2018, Morocco’s 580 MW Noor Ouarzazate Solar Complex is the world's largest concentrated solar power plant. Mirrors focus sunlight and heat water, which generates steam to power a turbine. This project is expected to reduce Morocco's reliance on imported oil.

The Swansea Bay Tidal Lagoon (SBTL) in Wales, UK, will harness the tide's ebb and flow to produce electricity. The project’s 320 MW capacity could supply clean energy to more than 155,000 households. The development could serve as a prototype for future tidal power projects when completed.

The Clean Cooling Collaborative (formally the Kigali Cooling Efficiency Program) encourages developing nations and the highest contributors to cooling-related emissions to use energy-efficient cooling technologies. The initiative — supported by influential organizations, including the United Nations and the World Bank — aims to increase the energy efficiency of cooling systems while cutting greenhouse gas emissions.