The A to Z of the Energy Transition: R is for Renewable Energy

What! Just one letter for renewables?! Why am I not doing S is for Solar, W is for Wind (or Wave), H is for hydro etc. ? ? ?

I did consider this but as important as renewables are to the transition, I think the story is relatively straight forward and I wanted to keep the other letters for other, perhaps lesser-known topics. So I hope you don't think I've crammed too much into one letter this week!

Renewable energy covers a very broad (and sometimes blurred) range of technologies. In the simplest of terms a source of renewable energy needs to satisfy two criteria: 1) It is zero (or very low carbon) at the point of production (and low carbon on a full lifecycle basis) and 2) It is naturally and infinitely replenished. On this second point there's little debate about wind and solar, but more debate on this in some forms of bio energy. I covered more on this under ... And don't forget about G is for Geothermal

So this article will focus on the main forms of renewable electricity generation

So let me break this article in four sections.

1.    The phenomenal growth of wind and solar

2.    Hydro the unsung backbone of renewable power?

3.    Is there a role for other technologies?

4.    What about the wind doesn't blow and the sun doesn't shine?

The phenomenal growth of wind and solar

Whilst the development of wind and solar PV to generate electricity goes back a century and a half (the first electricity generating wind turbine was installed in Scotland in 1897 by Professor James Blyth and the first solar cells to generate electricity were even earlier in 1883), I'm going to focus this on the last two or so decades.

Since 2000, wind and solar energy have experienced extraordinary growth. Installed capacity of wind has grown nearly 70 times and solar a massive 1700 times! Globally solar capacity now exceeds that of wind (although wind still generates more electricity) and combined has surpassed hydro (generating 15% of global electricity).

In fact, virtually every historic forecast of renewables growth has wildly underestimated the pace of renewable deployment.

Global installed capacity of wind and solar - source: Energy Institute Statistical Review of World Energy charting tool

The success of wind has in large part been driven by ever larger and more efficient turbines, Onshore turbines which until a few years ago were typically around 2 MW are now commonly 5-7 MW and may reach up 10 MW, in the case of Envision Energy's EN-220 unit being developed. But it is in offshore wind where turbine scale has really taken advantage of the superior wind resource at sea. Less than a decade ago I visited what was then the world's largest offshore turbine, a 7 MW unit in Methil, Fife. Today nine years on, offshore wind turbines are regular 10-15 MW and as large as 26 MW. Not withstanding some of the recent challenges in the US, offshore wind has rapidly grown from nothing to 85 GW according to this report of RenewableUK China is by far the largest market, but the UK is a strong second with 15.6 GW installed. Offshore wind has flourished where winds are typically strongest and most reliable (such as the North Sea) but also where the alternatives of onshore wind or solar are limited by land use or lower resource quality.

The Energy Institute is leading important work on many aspects of offshore and onshore wind health and safety through it's G+ Global Offshore Wind Health and Safety Organisation and SafetyOn initiatives.

Solar's story has been even more remarkable than wind, driven by massive reductions in cost (more than 90%) over the last decade or so. This declining cost curve or learning curve has been supported by solar's modular manufacturing approach. Solar panels are small and manufactured in the billions each year. This has driven massive improvements in efficiency (although rightly people have challenged the environmental and ethical practices that occur in some parts of the world). There have also been several key technological improvements to solar PV, including from polycrystalline to monocrystalline, from P type cells to N type, tracking technologies and bifacial panels (which harness energy from the reflection of sun from the ground in desert / stone type environments). China has dominated the global story of solar, growing 47% in 2024 in generation terms. But even the well established US market saw a 27% increase in solar generation last year (in part supported by the Inflation Reduction Act).

What is extraordinary about solar is that the growth rate shows little sign of abating. There are already reports that solar installation in the first half of 2025 is some 60% higher than the same period last year.

Solar and wind have two other 'super powers'.

First, both directly generate electricity. I discussed this at length in P is for Primary Energy. Electrification for end-use is typically far more efficient than burning coal or gas to generate electricity - charging my EV at home gives an energy efficiency conversion of well over 90%, with very few system losses, three or four times more efficient than a diesel or petrol car. As economies electrify, source of directly electricity will reduce the overall need for primary energy input.

And secondly, wind and solar in particular are highly suitable for distributed and off grid solutions. A home or village in developing parts of Africa can access vital electricity for light, refrigeration of food and other critical services via a solar-battery system for a few hundred dollars.

Hydro the unsung backbone of renewable power?

As arguably the most mature form of renewable energy, hydro power continues to play a significant role in decarbonising the grid. Hydro works by harnessing the kinetic energy of flowing water—typically from rivers or reservoirs—to spin turbines and generate electricity. According to the Energy Institute Statistical Review of World Energy, in 2024 hydro accounted for around 14% of global electricity - just slightly less than wind and solar combined. Unsurprisingly the proportion varies massively been different geographies, with hydro making up over 95% of Norwegian electricity and over half of Brazil's.

Globally installed hydro capacity reached 1443 GW in 2024 (of which just over 1250 GW was conventional, with pumped hydro accounting for the remaining ~200 GW). I have to admit being surprised how much hydro has grown, nearly doubling in capacity since 2000. China is by far the largest hydro producer in the world, adding over 6.5 GW of conventional and nearly 8 GW of pumped hydro just in 2024. I'll talk more about pumped hydro under a future letter.

Hydro's two main advantages, in contrast to wind and solar, are that first output is not dependent on daily weather patterns and second that it is typically considered dispatchable i.e., it can be called on to produce electricity in seconds and output easily varied to meet demand. In this respect, it can act as a helpful variable load to complement wind and solar.

Hydro's biggest challenges are that it is increasingly affected on a seasonal basis by the volume of rainfall - something that is likely to be exacerbated by climate change with increasing incidence of droughts. Whilst globally hydro output has remained broadly stable and steadily growing, it is has suffered big yearly swings in individual countries / continents. For example, in France hydro generation fell 25% in 2022 (unfortunately the same year nuclear fell dramatically due to maintenance issues) before sharply recovering in 2023 and 2024. Similarly, China saw a 6% fall in 2023, with a 10% increase in 2024. The chart below shows the scale of some of those swings.

Largest year-on-year variations in hydro generation by country - source: Energy Institute Statistical Review of World Energy (Gemma Fox)

Whilst China dominates global growth in hydro, there are plenty of projects under construction elsewhere, particularly in Africa, parts of South America and Asia. You can read a load more on hydropower in the World Hydropower Outlook 2025 published by our friends at the International Hydropower Association (IHA).

Is there a role for other technologies?

There's often a lot of interest and excitement in new solutions around new ways of capturing energy from wave and tidal, but today their contribution is tiny relative to wind, solar and hydro. Tidal energy broadly uses one of two approaches: a barrier across a tidal estuary or a manmade lagoon. It provide a highly predictable, with a smoothly varying profile (clearly at high and low tides flow reduces to zero) and with some variation due to lunar cycles. Wave technologies clearly have a dependency on sea conditions (which often correlates to wind speed).

Globally there's only around 0.5 GW of installed tidal projects, most of which is from two projects: the world's largest, the 254 MW Sihwa Lake in South Korea and France’s La Rance 240 MW project (pictured below). Wave generation is even more niche, with only a few pilot MW in operation around the world. A few years ago plans were under development for a tidal 320 MW tidal lagoon in Swansea, which would have become the world's largest. The project effectively was shelved in 2018, when it failed to receive government support.

Fundamentally, the challenge for tidal and wave projects is cost - both in terms of current cost versus wind, solar or fossil - but also the expected potential reductions in costs through time. Inevitably each tidal project is unique to its location and very big, therefore the learning curve I described for wind and solar above is incredibly hard to replicate. And whilst tidal lagoons may create new lifestyle amenities for the public (the Swansea lagoon was to have had a 10 km walk and cycle way), they also likely to face opposition from environmentalist, the fishing industry and other people who don't want their coastline built on.

La Rance tidal lagoon in France - Source: WEAMAC Marine Energy

Wave and tidal energy may have a role to play in the energy transition, although their contribution is almost certainly going to remain very modest compared to wind and solar, they offer some advantages that can make them locally valuable tools in the energy mix. The International Energy Agency (IEA) has forecast that tidal and wave could contribute up to 300 GW of capacity by 2050. That's nearly 600x higher than today's installed capacity but to put it in context less than the year on year growth in solar capacity last year!

Finally, what about CSP (Concentrated Solar Power) ? Rather than using PV technology, CSP uses a large array of mirror to concentrate energy from the sun to heat a liquid (often molten salt). It's key benefit is that the heat generated is not only used to generate electricity but can be used as form of storage to generate electricity once the sun has set. The are some incredibly impressive CSP projects around the world, in Dubai, the US, Mexico and Spain, but globally CSP represents around 0.3% of total solar capacity. No doubt this will grow through time but I think it will only remain a niche solution in the context of the global transition.

Sheikh Mohammed Bin Rashid Solar Park - 700 MW Concentrated Solar in distance, solar PV in foreground - Source: Author during a visit in 2022

What about the wind doesn't blow and the sun doesn't shine?

If I had a £1 or a $1 for each time someone asked, "Renewables are all very well.... but what happens when the wind doesn't blow and the sun doesn't shine?", I would be writing this article from my yacht somewhere very warm and sunny, rather than a somewhat chilly home office!

A decade or so ago, the consensus (at least in the circles I moved) was that renewable penetration on a grid might reach 25-30% but beyond that it would prove difficult, if not impossible. That thinking has clearly been debunked. As the chart below illustrates, many grids now regularly exceed 50% renewable penetration on an annual basis and some have reached or got close to 100% on a daily basis.

Ten most decarbonised power systems globally - Source: Energy Institute Statistical Review of World Energy launch presentation 2025

None of this is to ignore the complexity (and costs) of integrating renewables into grids - this is arguably one of the biggest challenges of the energy transition. In the last edition, Q is for Queues for the Grid I discussed the largest global backlog of projects waiting to connect to the grid. In D is for Digitalisation I described the role of digital technologies in enabling technologies such as time of use pricing. And in the coming letters I'll be talking more about the important role of storage, transmission, distribution and other technologies critical to integrating renewables.

So think of this is part 1 of the renewables story in my A to Z of the Energy Transition, with more to come in the next few letters!

Further reading

And as always, please find some further reading from the Energy Institute's #NewEnergyWorld magazine with thanks to Will Dalrymple.

Wind

Shifting gears: onshore wind in Northern Europe

Canada sets goal of 5 GW of offshore wind by 2030, while US sector faces policy headwinds

Onshore wind beats solar PV as the lowest-cost renewable energy source in 2024

UK supercharges offshore wind with £1bn investment

Poland ramps up offshore wind as energy security dominates political agenda

China outlines plans to accelerate offshore wind and green trade measures to reach climate goals

Solar

Solar imports surge by 60% across Africa, suggesting a major renewables take-off across the continent

Sheep farmers find new hope with solar

Being a maverick pays off for Australian solar 5B, while rooftop solar booms in China

Hydro

Cameroon pushes ahead with 420 MW hydroelectric project

The promise of small hydro power in India

Tidal

Energy Insight: Tidal lagoon power for the UK - will it happen?

New turbine blade a ‘step change’ for tidal energy

Finance

New financial models advance clean energy in Africa