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Renewable Energy Reshaping the Global Energy Landscape

As fossil fuels become increasingly scarce and their environmental impacts grow more severe, many countries around the world are accelerating the development of alternative energy sources—especially renewable energy. The global shift toward renewable energy is fundamentally reshaping the balance between energy supply and demand.

Redrawing the Map of Renewable Energy

Fossil fuels—including coal, oil, and natural gas—were the primary energy sources that powered the First Industrial Revolution in the late 18th and early 19th centuries. Thanks to these energy sources, human production advanced to its current scale and capacity. Fossil fuels replaced traditional sources such as biomass (wood, human and animal labor, etc.), playing a crucial role in socio-economic development.

However, fossil fuels are finite, while global energy demand continues to rise. Moreover, the extraction, processing, and use of fossil fuels have had negative environmental consequences—not only for current generations but for future ones as well. As a result, the world has increasingly turned to alternative sources, with renewable energy seen as the most viable solution to these limitations. Specifically:

Annual Growth in Renewable Energy Production

Climate change and more frequent extreme weather events have made the transition to renewable energy more urgent than ever. Between 1966 and 2022, the annual growth rate of renewable energy output fluctuated significantly but generally followed a positive trend.

Key peaks were observed in 1974—at 9.67%—driven by the global oil crisis, and in 2008—at 10.03%—during the global financial crisis, which exposed the unsustainable nature of many economies and growth models. Since 2010, global renewable energy production has entered a period of high and steady growth, consistently above 4%. According to the International Energy Agency (IEA), global renewable energy output reached a record high of over 440 gigawatts in 2023, an increase of 107 gigawatts from the previous year.

Rising Competitiveness of Renewable Energy

With nearly unlimited extraction potential and sustainability, solar and wind energy have become increasingly widespread. The oil crisis of the 1970s prompted many countries to rethink energy consumption and initiate major research programs on solar and wind power as part of their renewable energy strategies. Thanks to technological advances, renewable energy has become increasingly cost-competitive with fossil fuels.

While differences in cost and capacity remain, key indicators for these renewables follow similar trends: average installation costs and levelized costs of energy (LCOE) are declining, while capacity factors are rising. Technological improvements have helped lower solar and wind energy costs, offering long-term economic benefits and accelerating their share in the global energy mix. This helps ensure national energy security, promotes sustainable development, reduces pollution, and combats climate change. IEA research shows that by 2025, renewable energy will become the world's main source of electricity, accounting for one-third of total global power generation.

The Electrification Trend

With economic and social development, electric machines and devices have played an increasingly important role in improving productivity and reducing human labor. Electricity is essential to power these devices, and its importance continues to grow.

To achieve carbon neutrality by mid-century, many countries are shifting from fossil fuels to electricity for powering equipment, buildings, and transportation. For example, the electrification of heating systems is part of the European Union’s plan to reduce emissions from buildings.

Today, improved electrical equipment and transmission grids are driving widespread electrification across sectors, even in traditionally fossil fuel–intensive ones like transportation. Electric vehicles (EVs) are becoming mainstream. According to EV-volumes.com, global EV sales are expected to triple from 10.5 million in 2022 to over 31 million in 2027. At the current growth rate, this number could more than double again to 74.5 million units by 2035.