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Towards Sustainable Energy: A Systematic Review of Renewable Energy Sources, Technologies, and Public Opinions

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Systematic review article, renewable energy consumption and economic growth nexus—a systematic literature review.

• 1 School of Economics, Guangdong University of Finance and Economics, Guangzhou, China
• 2 School of Technology, Management and Engineering, NMIMS, Indore, India
• 3 Department of Banking and Financial Markets, Financial University Under the Government of the Russian Federation, Moscow, Russia
• 4 University Center for Circular Economy, University of Pannonia, Nagykanizsa, Hungary

An efficient use of energy is the pre-condition for economic development. But excessive use of fossil fuel harms the environment. As renewable energy emits no or low greenhouse gases, more countries are trying to increase the use of energies from renewable sources. At the same time, no matter developed or developing, nations have to maintain economic growth. By collecting SCI/SSCI indexed peer-reviewed journal articles, this article systematically reviews the consumption nexus of renewable energy and economic growth. A total of 46 articles have been reviewed following the PRISMA guidelines from 2010 to 2021. Our review research shows that renewable energy does not hinder economic growth for both developing and developed countries, whereas, there is little significance of consuming renewable energy (threshold level) on economic growth for developed countries.

Introduction

Consuming non-renewable energy may produce output and foster economic development, but undoubtedly it is a significant source of carbon emission and environmental degradation ( Awodumi and Adewuyi 2020 ). Using non-renewable energy sources put countries in a dilemma in policy priority between pollution reduction and economic growth. Thus, whether renewable or non-renewable, the energy should be used carefully and efficiently as its sources are limited. In addition, due to climate change and global warming situation, renewable energy could be the most attractive alternative to fossil fuel, reducing the CO 2 emission process. However, introducing new renewable energy technologies, consuming, and making them available for the citizens, is very time-consuming and costly. On the other side, countries struggle to maintain economic growth and development. Due to the COVID-19 crisis, the situation has been worsening. The governments of both developing and developed nations have to balance spending for climate change mitigation and economic growth.

Moreover, there is still limited information regarding all the perceived critical factors in moving toward fully renewable energy sources. This article shows a comprehensive assessment of how renewable energy systems affect the country’s economic growth. In this article, assessment is carried out based on G7 and Next-11 countries. France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada make up the Group of Seven (G7) intergovernmental organization. Government officials from these nations meet regularly to discuss world economic and monetary matters, with each member alternating through the chairmanship.

Along with the BRICs, the Next-11 (or N-11) are eleven countries identified by Goldman Sachs as having a high potential to become the world’s largest economies in the twenty-first century, namely, Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam. Figure 1 shows the name of G7 and Next-11 countries.

FIGURE 1 . (Group Seven) G7 and (Next-11) N-11 countries.

Energy resource has been the fundamental element for an economy or economic development ( Xiong et al., 2014 ). It is clear that economic growth mainly depends on energy consumption, which is highly responsible for greenhouse gas (GHG) emissions, particularly CO 2 , as stated by Gabr and Mohamed (2020) . CO 2 emissions are a by-product generated by primary consumption sources of non-renewable energy, such as fossil fuels ( Thollander et al., 2007 ). Starting from this general environmental framework due to non-renewable sources, several national economies, after having experienced several disasters, have tried to bring about a structural change in production methods and energy use. Some countries have mainly switched to renewable sources, leaving fossil fuels to no longer be based on non-renewable energy sources ( Irfan et al., 2021 ). According to the EY Company’s Renewable Energy Country Attractiveness Index (RECAI), which integrates new global trends, the countries with the most significant opportunities for investments in renewables are the United States, China, and India, three large economies that have been competing for these positions for several years now ( RECAI, 2020 ). Implementing renewable energy sources (RES) is essential but still faces some challenges in some European countries. Perception and awareness toward RES are the main challenges in countries such as Montenegro ( Djurisic et al., 2020 ).

One of the world’s major power resource user countries, China, has put forward the “double carbon” target to reduce emissions ( Jiang et al., 2022 ). China’s domestic market has shown some resilience despite the end of domestic subsidies in December 2020 and the COVID-19 crisis, which affected 10% of new capacity additions. Chinese solar panel production grew by 15.7% compared to 2019 ( RECAI, 2020 ). Australia represents the third, this country has experienced exponential growth in residential photovoltaics, distributing over 10 GW of solar energy to civilian homes and adopting necessary plans to export hydrogen to Asia ( RECAI, 2020 ). India follows, from 7th to 4th place, and thanks to the growth of photovoltaic capacity to meet the ambitious national green goals for 2030 ( RECAI, 2020 ). In addition to G7 and N-11 countries, Table 1 shows the general information and technology-specific scores of the top 10 countries that invest in renewable energy sources, and Figure 2 shows the data visualization of the dataset in Table 1 .

TABLE 1 . Top 10 countries that invest in renewable sources.

FIGURE 2 . Comparison of technology-specific score of top 10 countries.

Some studies tried to relate the consumption of renewable energy and economic growth. But most of the studies concern EU countries and other factors. For example Tutak and Brodny . (2022 ) have tried to analyze the impact of renewable energy on economics, environmental, and conventional energy sources. In addition, ( Smolović et al., 2020 ), by using the pooled mean group (PMG) estimator in a dynamic panel setting (an ARDL model) has carried out a nexus between renewable energy consumption and economic growth in the traditional and new member states of the EU. Furthermore, the panel vector autoregression (PVAR) model ( Koengkan, Fuinhas, and Marques 2019 ) has examined the relationship between financial openness, renewable and non-renewable energy consumption, CO2 emissions, and economic growth in 12 Latin American countries. Furthermore Lorente et al. ( 2022 ) found that there is an association between economic complexity and CO 2 emissions is inverted-U and further N-shaped relationship for Portugal, Italy, Ireland, Greece, and Spain.

We have noticed a research gap of systematic review analysis regarding economic growth and renewable energy consumption in recent years by analyzing other existing research work. From this point of view, our study tried to fill the research gap and make it a collection of systematic reviews in this field. Moreover, there were no such systematic reviews (including developing, developed, and underdeveloped countries) in this field of study.

Due to the higher cost of implementing and maintaining, cost-benefit analysis, and other external–internal factors, renewable energy is still under consideration to entirely depend on the energy source. Thus, this is a burning question for the researchers, policy makers, and related organizations whether introducing the renewable energy source would hinder or slow down the economic growth. Many researchers are trying to answer for their respective country or region of interest. No such review work tried to find the nexus between RE and EG for G7 and N-11 countries. This study attempted to gather the related research outcomes and give a broader picture of introducing and using the renewable energy and economic growth relationship.

Basic Interpretation With Renewable Energy and Economic Growth

Introducing renewable energy and economic growth is a widespread debate among researchers. From this point of view, by executing the panel data (1970–2017) ( Konuk et al., 2021 , 11), examined the relationship between economic growth and biomass energy consumption for N-11 countries. According to their research work, economic development and biomass energy consumption act together in the long run. In addition, Jenniches (2018 ) tried to assess the regional economic impacts of a transition to renewable energy generation in his review article. He believes clearly that defining technologies and assessment periods is very significant. Doytch and Narayan (2021) estimated the effects of non-renewable and renewable energy consumption on manufacturing and services growth. They have found that renewable energy enhances growth in high-growth sectors, that is, the services sector in high-income economies and the manufacturing sector in middle-income economies. Acheampong et al. (2021) investigated the causal relationship between renewable energy, CO 2 emission, and economic growth for 45 African (sub-Saharan) countries over 57 years (1960–2017). Using the GMM-PVAR method, they have concluded that a bidirectional causal relationship exists between economic growth and renewable energy ( Acheampong, Dzator, and Savage 2021 ). Another old study (comparatively) in 2003 by Ugur and Sari examined the causality relationship between the two series in the top 10 emerging economies and G7 countries. They have discovered bi-directional causality for Argentina, GDP to energy consumption causality for Korea and Italy, energy and consumption to GDP for Turkey, France, Germany, and Japan. Additionally, it was found that countries such as Argentina, Brazil, Paraguay, Uruguay, and Venezuela have low renewable energy participation in their energy mix. An effect between renewable energy consumption and fossil fuels, as a possible response to periods of scarcity in reservoirs, was detected for these countries ( Koengkan et al., 2020b ).

In contrast, economic growth may slow down due to energy conservation in the case of the rest four nations ( Soytas and Sari, 2003 ). Another estimation suggested that non-renewable energy consumption has a significant and positive impact on economic activities and development across a large number of Organization for Economic Co-operation and Development (OECD) countries ( Ivanovski, Hailemariam, and Smyth 2021 ). A review of hybrid renewable energy systems (HRES) in developing countries has been conducted by Zebra et al. (2021) . They believe Asian developing countries perform better than African nations for renewable and non-renewable mini-grids maintenance and productivity. They also believe that, in general, the costs of mini-grids will continue to decline, making renewable sources even more competitive at the utility scale. Some researchers also tried to find the opposite relationship between economic growth (barriers) and renewable energy development. Seetharaman et al. (2019 ) believe technological, social, and regulatory barriers hinder the development of RE development, but economic constraints do not directly impact the outcome of renewable energy.

In some countries, renewable energy and consumption do not hinder economic development, and on the other side, it plays a vital role in hindering economic development. So, according to Islam et al. (2022) , income growth shows positive and negative effects on renewable and non-renewable energy consumption. Consider that domestic and foreign investments positively affect renewable and non-renewable energy consumption. Furthermore, institutional quality has a positive impact on renewable energy consumption. Instead, the urbanization process has a negative impact on the consumption of renewable energy because it has a positive influence on the consumption of non-renewable energy ( Islam et al., 2022 ).

Unfortunately, despite the revolutionary attempt to adopt renewable energy technologies, some industrial countries are still firm on the consumption of fossil fuels energies with the aim of recording faster and more impressive economic growth ( Shrinkhal, 2019 ; Islam et al., 2021 ). Contrary to the positive effects on the environment generated with renewable energy sources, the economic serenity that can be reached using non-renewable enriches the coffers of different economies and the lifestyles of their people, but not those of the environment ( Doytch and Narayan, 2016 ). In some cases, renewable energy consumption (threshold level) does not significantly affect economic growth for developed countries. Renewable energy (RE) and economic development indicators may not correlate in selected EU countries. Despite some debate and unstable economic conditions, the share of RE in total energy consumption in EU countries has been systematically growing and was not much dependent on economic factors ( Ogonowski 2021 ). The economic value of solely replacing renewable energy with nuclear power and fossil energy could be very high and infeasible. They consider that electricity and power generation based on only renewable energy would cost an additional 35 trillion KRW/year for South Korea ( Park et al., 2016 ). This method is infeasible, and customer willingness to pay will be low. Lema et al. (2021) by taking in-depth analysis, tried to measure to what extent direct and indirect economic benefits are created when Chinese investments in RE projects in sub-Saharan Africa. Their research revealed that the FDI and investments on RE projects might have “bounded economic benefits” for the region by creating new job opportunities, production and training activities, linkage with local systems, and so on. In addition, economic awareness, public opinion, and mass participation are essential for the use of RE in the region. Citizens of Kenya (73%) (both urban and rural) strongly approved the development of RE sources technologies and (91%) believe that RE technologies will reduce the cost of electricity and power generation ( Oluoch et al., 2020 ).

Methodology Used in Review Assessment

We have considered Group seven (G7: Canada, France, Germany, Italy, Japan, UK, and the United States), countries (as developed nations and the Next-11 (N- 11: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam) countries (exclude South Korea) as developing countries.

To maintain the whole process, we have followed the PRISMA flowchart explained in Figure 3 :

FIGURE 3 . PRISMA flow diagram.

The PRISMA method—Preferred Reporting Items for Systematic Reviews and Meta-Analyzes—built a set of minimum elements based on the references highlighted in the systematic reviews and meta-analysis. The primary purpose of PRISMA is to focus primarily on studies that evaluate the effects of certain interventions. However, they can also be used to report systematic reviews that present with different objectives (e.g., from the evaluation of interventions) ( Prisma, 2021 ).

For this purpose, PRISMA was used because it is helpful for the critical evaluation of the published systematic reviews of this study, although it is not a tool for assessing the quality of a systematic review. For the main results of the literature review according to the PRISMA guidelines, we have considered the available online date for the “Year” column. We have followed the MLA style for the author’s name. The applied and references related theories are in the “Theories” column. Authors’ article methodologies are considered in the “Methods” column. The author’s near-future predictions or consequences are listed in the “Predictors” column. The results, conclusions, or outcomes are in the “Outcomes” column, followed by article keywords in the “Keywords” section. We have used google scholar citation for the citation column until the last week of December 2021. The citation number may vary as the citations are increasing every day. The last column is “Journal,” which denotes the respective article published journal name.

We have used Google Scholar, Scopus, Science Direct, and PubMed for research articles. Initially, we searched the articles using the keywords “Renewable energy” and “Economic growth.” We have 553 articles related to good governance and sustainable tourism mentioned in the article’s title. There were 17 duplicate articles that we had to remove. We deducted the articles unrelated to the topic content from this initial screening. After removing the irrelevant articles, we had 97 full-text eligible articles. From these 97 articles, we have selected 46 closely matched full-text articles for review ( Figure 3 ).

Effect of Renewable Energy in Economic Growth G7 Countries

While presenting economic prosperity, the G7 countries can still not guarantee environmental well-being. In fact, using the annual frequency data from 1980 to 2016, the impact on the environment of some variables was ascertained using panel data. The results show that financial globalization and eco-innovation reduce the ecological footprint. On the contrary, urbanization stimulates environmental degradation by increasing the ecological footprint values ( Ahmad et al., 2021 ).

Amri (2017) , using the dynamic simultaneous-equation panel data approach, investigated, over the period 1990–2012, the relationship between three indicators (economic growth, renewable energy, and trade) in different income groups of countries and underlined the interdependence of these variables. Notably, the main findings reveal a bidirectional nexus between renewable energy consumption and GDP in all groups of nations; a persistent bidirectional relationship among foreign trade and renewable energies in all groups of countries; finally, a bidirectional nexus between trade and economic growth in developed, developing, and others developed countries. In addition, a team of researchers investigated the dynamic effect of RE consumption, biocapacity, and economic growth in the United States from 1985 to 2014. Using the ARDL model, the authors claim that a decline in environmental degradation can attribute to an increase in RE consumption through its negative effect on the ecological footprint. Their study revealed that biocapacity and economic growth would exert more pressure on the ecological footprint. Furthermore, a causal relationship was built between ecological footprint and economic growth and economic growth and biocapacity ( Usman, Alola, and Sarkodie 2020 ).

Armeanu et al. (2021) , investigated, using several statistical methods, the interrelationships, over the period 1990–2014, among renewable energy, types of energy, economic growth, CO 2 emissions, and urbanization in different income groups of countries, and highlighted that “In the case of the group of countries with a high level of income, the presence of the co-integration of the renewable energy use with the carbon releases, renewable and nuclear energy, electric power consumption, and the urban population was observed” and the relationship was satisfied, due to the interest of this group of countries to preserve the environment. Furthermore, through the Granger causality test, the authors find a single-bidirectional causal relationship between economic growth and energy intensity in the low-income countries, whereas many bidirectional relations among the variables in high-income countries, particularly between energy intensity and CO 2 emissions.

Another study was conducted by Hao et al. (2021) to investigate the effects of green growth on CO 2 emissions for G7 countries over the past twenty-five years, using second-generation panel data methods, for example, the distributive self-regressive-augmented transversal lag model (CSARDL). The results revealed that both short- and long-term GDP growth impact environmental impoverishment. Thus, the thesis that green growth supports the quality of the environment is confirmed. The authors highlighted that any changes in CO 2 , GDP, green growth (GG), environmental taxes (ET), renewable energy consumption (REC), and human capital (HC) in one of the G7 countries would have consequences in other G7 countries in an interconnected nexus between G7 countries.

However, at the regional level, total energy consumption positively affects growth, while renewable sources negatively affect development in some regions in low- and middle-income countries ( Namahoro et al., 2021a ). Instead of testing the relationships among variables with appropriate and feasible econometrics modeling techniques, using panel data methodologies, Li and Leung (2021) evaluated the relationship between energy prices, economic growth, and renewable energy consumption. The results of Li and Lung’s study (2021) highlighted the importance of economic growth in supporting renewable energy consumption, especially in G7 countries with developed economies. However, factors that are affected through renewable energy systems are listed in Table 2 . By focusing on R&D spending and uniform policies, the G7 countries have transformed their economies from copying countries to a community of dynamic economies. As a result, and in tandem with the economy’s digitalization. This study examines the relationship between energy, financial, environmental sustainability, and social performance of G7 countries using a data envelopment analysis (DEA)-like composite score. The foundation of this study is formed over the reconstruction and modification of regional emissions and examining aspects such as energy, efficiency, and usage, in addition to the prospect of having a regional development outline. Most prior research used certain essential methodologies to examine emission levels and variance depending on actors connected to energy efficiency, energy structure, financial development, production, industry, technological development openness, and population.

TABLE 2 . Factor that effected through the renewable energy system.

Namahoro et al. (2021b) underlined that renewable energy consumption affects economic growth, using an asymmetric analysis with a non-linear autoregressive-distributed lagged model (NARDL) and causality test. In contrast, Wang and Wang (2020) reveal that in the G7 countries, renewable energy consumption positively affects economic growth. The threshold value changes influence in this positive relationship. Thus, the role of growing renewable energy use to stimulate economic growth is non-linear. For example, if the EU countries increase their renewable energy over a threshold value, the position of renewable energy in supporting economic development is more significant. In the same line, in 2020, Chen et al. (2020) studied the causal link between renewable energy consumption and economic growth using a threshold model. The reference period is 1995–2015, and they confirm that renewable energies positively and significantly affect the economic growth in the OECD countries, whereas no significant effect is in the developed countries. The authors underlined that in developing and non-OECD countries, renewable energies significantly affect economic growth over a certain threshold of their consumption. In addition, Yang et al. (2021) found feed-in-tarrif (FIT) have higher expected output and profit, and lower market prices. The risks of production and gain is of relatively more significant. By contrast, the production and profit of renewable portfolio standard (RPS) remain relatively more stable. In the same year, Sharma et al. (2021) examined the interrelationships between sustainability indicators and financial growth performance, using Arellano–Bond dynamic panel data estimation, system dynamic panel data estimation, and the augmented mean group model. The results highlighted that the transition toward renewable energy is economically in the long run, positively impacting economic growth in line with the environment. From this point of view, total investment in RE and descriptive statistics with technological specific scores by G7 countries are listed in Tables 3 , 4 , respectively. Table 3 shows the Renewable Energy Country Attractive Index of different countries, and according to the score it is found out in the USA the growth or electricity generation through the renewable energy in the wonderful way. Overall data also shows the growth rate of the onshore wind energy systems, solar PV, solar CSP, geothermal systems are better in the United States; on the other hand, the offshore wind energy system and biomass systems are popular in the United Kingdom. The Renewable Energy Country Attractiveness Index (RECAI) rates the attractiveness of renewable energy investment and deployment prospects in the world’s top 40 markets. The rankings reflect our evaluations of market attractiveness and worldwide market trends. Table 4 describes the different statistical parameters with central tendency in terms of mean, mode, and median of renewable energy sources. It also finds most of the energy sources are minimum RECAI for Canada and maximum for the United States.

TABLE 3 . G 7 countries that invest in renewable sources.

TABLE 4 . Descriptive statistics with technological specific scores of G7 countries.

In Figure 4 , we have listed the comparative technology-specific scores in various factors among G7 countries.

FIGURE 4 . Comparison of technology-specific score of G7 countries. Data source: author elaboration.

There are also different phenomena in energy sector resources, capacity, and different level scales may have different outcomes. There is a possibility of reducing energy and resource consumption and to advance degrowth-related ideals of energy local production at local and small-scale energy systems in Spain and Greece ( Tsagkari, Roca, and Kallis 2021 ). The authors summarize that despite the degrowth potential of these local energy projects, their prospects are limited to revitalizing local economies and empowering local communities. The summary results of the literature review regarding G7 countries are listed in Table 5 .

TABLE 5 . Main results of literature review according to PRISMA guidelines of G7 countries.

Effect of Renewable Energy in Economic Growth Next-11 Countries

Rural people in impoverished and developing nations lack access to electricity that is dependable, economical, and long-lasting. Even though these countries have limited renewable energy sources, many urban and rural people rely on kerosene, diesel, and other fossil fuels to meet their energy needs. The renewable energy capacity in the Next-11 nations is shown in Table 6 .

TABLE 6 . Renewable energy capacity in 11 countries.

The Bangladesh’s energy sector remains deficient, impeding the country’s smooth economic activity, and progress. For greening growth and meeting sustainable development goals (SDGs), increasing the amount of renewable energy in the energy resources mix and reducing and reducing the material consumption utilized for energy generation is critical ( Baniya, Giurco, and Kelly 2021 ). The government attempts to close the gap between supply and demand for electricity by installing short-term power plants, coal-fired power plants, and importing from neighboring nations. However, the country still has a long way to produce and supply enough power. Furthermore, increased FDI inflows connected to energy limit the country’s extensive usage of renewable energy. At the same time, increased economic growth and CO 2 emissions in the area, particularly in Bangladesh, stimulate the use of renewable energy ( Murshed 2021 ). Another renewable energy source, tidal power, may play an essential part in the nation’s electrical supply by adding to it ( Ahmad and Hasan 2021 , 25). This will very certainly stimulate the industry and commercial activity along the shore. The answer may be alternatives to current energy sources, such as renewable energy resources. More renewable energy sources will be introduced and consumed, reducing energy scarcity, and promoting economic activity and growth ( Bhuiyan, Mamur, and Begum 2021 ). Researchers such as Alam et al. (2017) proposed a one-way causal relationship between economic growth and overall energy demand (renewable and non-renewable). They claim that even a cautious approach to energy sources would not affect the country’s economy, but that because economic success leads to increased energy consumption, Bangladesh must pursue renewable energy and demand-side management ( Alam, Ahmed, and Begum 2017 ). Nigeria, one of the NEXT-11 countries, is one of the Africa’s largest fossil fuel exporters. However, this country has recently experienced a significant energy problem. Biofuel has been identified as renewable energy (bioethanol and biodiesel) in recent years. Waste materials and feedstocks are widely available and accessible, potentially fueling Nigeria’s socio-economic progress ( Adewuyi 2020 ). Islam et al. describe the economic effect of renewable and non-renewable energy systems. The dynamic simulations approach looks at the influence of income growth, foreign direct investment, domestic investment, urbanization, physical infrastructure, and institutional quality on renewable and non-renewable energy consumption in Bangladesh from 1990 to 2019. According to empirical evidence, income growth positively and negatively impact renewable and non-renewable energy usage. Domestic investment has a favorable influence on renewable and non-renewable energy usage. It has been observed that foreign direct investment has a beneficial effect on renewable energy use. Although urbanization has a negative impact on renewable energy consumption, it positively impacts non-renewable energy consumption. Physical infrastructure has a positive and negative influence on renewable and non-renewable energy usage. Factor that effected through the renewable energy system on N-11 countries is listed in Table 7 .

TABLE 7 . Factor that effected through the renewable energy system on N-11 countries.

Ramadan et al. discuss the economic evaluation of new regulatory tariffs for renewables in Egypt. After 25 years of operation, the results show that adding a CAES system will increase the profitability of the Egyptian government’s new tariff for wind installations, with an NPV of $306 million compared to $207 million for a stand-alone wind system. Furthermore, the economic advantages rise if the government incentives for new renewable energy system installations or decreases financing rates. Ghouchani et al. investigate Iran’s renewable energy development potential. Three potential possibilities for the Iran’s renewable energy sector are examined in this report “long-term technology acquisition programs,” “policy stabilization,” and “attraction of international investment.” The findings indicated that renewable energy policy planning and implementation success is determined by selecting the most adaptive policies to national goals, technological capabilities, and economy. To swiftly and successfully develop and implement a comprehensive renewable energy plan, a thorough analysis of limits, impediments, available facilities and technologies, international sanctions, and foreign investment is essential. Sovacool et al. investigated and provided remedies to the likelihood of corruption in the Mexico’s renewable energy sector. The report then examines particular corruption risks in four nations (Mexico, Malaysia, Kenya, and South Africa) before offering five recommendations and solutions to help combat corruption. These approaches include corruption risk mapping, subsidy registries, sunset clauses, transparency initiatives, anti-corruption regulations, and shared ownership models. In the Economic Community of West African States’ renewable energy plan framework, Ozoegwe et al. examined Nigeria’s solar energy policy goals and tactics. This initiative is advised since the national solar energy strategy document lacks policies on encouraging the solar technology company in Nigeria. The proposals emphasized the requirements of the Renewable Energy Policy of the Economic Community of the West African States, which are currently in place. Case studies supported the recommendations for a community-shared business model for home end users and clusters of small companies in physical market places and an energy management contract business model for large organizations.

Ajayi et al. (2022) examined the influence of sustainable energy on national climate change, food security, and job opportunities in implications for Nigeria. It looked at international data on the links between energy and renewable energy adoption, national development, population growth, job creation, rural–urban integration, and the inherent benefits of renewable energy resources in mitigating climate change and global warming incidents. If Nigeria wants to continue economic growth, particularly in agriculture and food security, renewable energy for power generation must be included in the country’s rural development policy. It also shows that renewable energy can minimize its anthropogenic climate change contribution. From this point of view, total investment in RE and descriptive statistics with technological specific scores by N-11 countries are listed in Tables 8 , 9 , respectively. According to Table 8 , RECAI of Egypt is maximum, and the growth rate of renewable energy in Egypt is also maximum. Table 8 also shows that the RECAI score of some of the countries in the offshore wind, such as Vietnam and geothermal in Egypt is minimal. The World Bank is putting out a long-term offshore wind roadmap for Turkey to issue a tender in the next 2 to 3 years. Following the cancellation of a 1.2 GW offshore wind auction in mid-2018, the World Bank is now in charge of disbursing EU money to support the feasibility and environmental studies in preparation for a second sale. Table 9 describes the different statistical parameters with central tendency in terms of mean, mode, and median of renewable energy sources. The 57th edition of our Renewable Energy Country Attractiveness Index (RECAI) demonstrates that there is a room for further renewable energy investment and strong demand for it. Institutional investors, in particular, have the ability and desire to offer massive, long-term capital injections required to support the fast-growing global renewable energy sector.

TABLE 8 . Next-11 countries that invest in renewable sources.

TABLE 9 . Descriptive statistics with technological specific scores of N-11 countries.

In Figure 5 , we have listed the comparative technology-specific scores in various factors among N-11 countries.

FIGURE 5 . Comparison of technology-specific score of N-11 countries.

The impact of renewable energy use on Nigeria’s environmental quality in several sectors was studied by Maji and his colleagues. The influence of renewable energy consumption on sectoral environmental quality is being examined in Nigeria as part of the government’s effectiveness. A regression analysis was used to estimate a dataset from 1989 to 2019. The per capita indicator, environmental quality indicators, and sectoral output from the agricultural, manufacturing, construction sectors, transportation, oil, residential, commercial, and public services sectors, and other sectors were examined. Adelaja et al. discussed the several barriers to national renewable energy adoption in Nigeria. Despite the privatization of Nigeria’s largest power utility company, the Power Holding Company of Nigeria (PHCN), the country’s electrical demand is rarely met. Nigeria’s electricity output has lately been reduced, despite a massive increase in demand.

To fill the hole, polluting electric generators, inefficient energy sources including candles, kerosene lamps, paraffin devices, and entire energy abstention have all been employed. These problems lead to missed commercial and economic prospects, low quality of life, and missed long-term development potential. Lin et al. looked at how Nigeria’s renewable energy program affected the country’s total output. Based on Nigeria’s Renewable Energy Program aims, this research asks three main questions, Is it possible for Nigeria’s economy to be built entirely on renewable energy? Is it feasible to replace non-renewable energy with renewable energy? What is renewable energy’s economic impact? This study focuses on the growth of renewable energy in Nigeria. We calculate, among other things, the economic effect, production elasticity, and substitution possibilities of renewable and non-renewable energy sources. Our findings, based on a dataset from 1980 to 2015 and analyzed using the translog production function, demonstrate that capital and labor are the key drivers of output in Nigeria; however, although being positive, the economic effect of renewable and non-renewable energy sources is negligible. Wang and Wang. (2020) studied the non-linear behavior of aggregated and disaggregated renewable and non-renewable energy consumption on GDP per capita in Pakistan. This research looked at how diverse forms of energy, such as renewables, fossil fuels, oil-based electrical generating, and hydroelectric power, impact Pakistan’s output. While using fossil fuels to boost economic growth may be beneficial in the early stages of production, it is not helpful in the later stages of production. According to the study, using clean energy, while not beneficial in the early stages of production in expanding production activities in Pakistan, is useful in the later stages of production, not only for production but also for the environment.

Mohamed et al. (2021) in Pakistan discussed the role of renewable energy in combating terrorism. This study looks at the relationship between terrorism, renewable energy, and fossil fuel consumption in Pakistan, taking into account several variables such as economic development and income disparity. Using the autoregressive-distributed lag testing technique, this study evaluated the long-term connection between the examined variables throughout the yearly period of 1980–2015. Their variables have long-term relationships, as shown by the Wald test. The summary results of the literature review regarding the Next-11 (N-11) countries are listed in Table 10 .

TABLE 10 . Main results of literature review according to PRISMA guidelines of Next-11 Countries.

Granger causality identifies the long-term bi-directional causal links between all variables. The research demonstrates short-term unidirectional causes between terrorism and fossil energy, GDP and renewable energy, and wealth disparity and fossil energy, even though there are bidirectional causal links between renewable energy and fossil energy in the near run. In reality, long-term statistics demonstrate that fossil fuels decrease terrorism while renewable energy increases it.

Wang and Wang (2020) studied renewable energy use, economic growth, and the human development index in Pakistan. This study examines the link between renewable energy consumption, economic growth, and the human development index in Pakistan from 1990 to 2014 using the two-stage least square approach. According to empirical research, using renewable energy does not improve Pakistan’s human development. Surprisingly, the lesser a country’s degree, the higher its income will be. CO 2 emissions also contribute to the enhancement of the human development index. Furthermore, trade liberalization stifles Pakistan’s progress in terms of human development. Again, the long-term feedback idea between environmental influences and human development is supported by causality analysis.

Islam et al. (2022) demonstrate how renewable energy helps Pakistan prosper economically. The research aims to look at the link between renewable energy consumption and economic growth in Pakistan, taking into account capital and labor as possible production function variables. In this work, the autoregressive-distributed lag (ARDL) model and the rolling window approach (RWA) were used to integrate data in a Pakistani scenario. Quarterly data from 1972Q1 to 2011Q4 were used in the study. Bertheau and his colleagues looked into it. A geospatial and techno–economic study for the Philippines was based on 100% renewable energy micro-grids. As a result, this study recommends a hybrid approach that combines geospatial analysis, cluster analysis, and energy system modeling: To begin, they identify islands that are not connected to the power grid. Second, cluster analysis is used to identify trends. Third, we perform simulations of energy systems employing solar, wind, and battery storage to generate 100% renewable energy systems. Our research will focus on 649 non-electrified islands with 650,000 people. These islands are grouped into four groups based on population and renewable resource availability. They determined that cost-optimized 100 percent renewable energy systems rely on solar and storage capacity for each cluster, with additional wind capacity. According to Doytch and Narayan (2021) , renewable energy boosts economic growth. This study examines the influence of non-renewable and renewable energy consumption on economic development, distinguishing between manufacturing and service growth. Our empirical model is based on an endogenous growth framework with an increasing number of intermediate capital goods that comprise non-renewable and renewable energy inputs. We examine the impacts of non-renewable and renewable energy consumption on manufacturing and service growth, broken down by the type of usage (industrial, residential, and total final energy consumption) while accounting for well-known growth variables. Park and his colleagues looked at the procedures used by South Korean renewable energy cooperatives. This research focuses on citizen participatory RE co-ops as a vital niche in the community-led energy route. This study did a narrative analysis based on the RE co-ops’ present state and in-depth interviews. We examined key changes and inertia in the conventional energy system at the national, regional, and local levels by comparing within and across scales. Each scale was made up of a tangle of sub-regimes such as market, policy, and culture. We believe a niche may play a creative role in changing sub-regimes of various sizes based on resources that can be handled, such as money resources, rules, and connections. Sim J et al. looked at the economic and environmental benefits of R&D investment in the renewable energy sector in South Korea. The South Korean government has announced a strategy to invest in renewable energy to shift the country’s economy away from fossil fuels and toward renewables. This study assesses R&D investment in six types of renewable energy sources: biomass, waste, solar thermal energy, photovoltaic energy, marine energy, and wind power energy while taking into account several uncertainty factors such as the amount of renewable energy produced, R&D investment, unit price, and risk-free interest rate. According to Yurtkuran et al., agriculture, renewable energy generation, and globalization all influence CO 2 emissions in Turkey. This study investigates the impact of agriculture, renewable energy production, and globalization on CO 2 emissions in Turkey between 1970 and 2017. It uses the Gregory–Hansen integration test, bootstrap autoregressive-distributed lag (ARDL) approach, fully modified ordinary least squares, dynamic ordinary least squares, and long run estimators. The KOF indices for politics, society, and economics are explanatory variables. The Gregory–Hansen test and the bootstrap ARDL approach imply co-integration variables. In Turkey, Shan et al. investigated the role of green technology innovation and renewable energy in achieving carbon neutrality. A Granger causality test determines the causal relationship between green technology innovation, energy consumption, renewable energy, population, per capita income, and carbon dioxide emissions. Green technology innovation, renewable energy, energy consumption, population, per capita income, and carbon dioxide emissions are all co-integrated in the long run. Furthermore, while green technology innovation and renewable energy reduce carbon dioxide emissions, energy consumption, population, and per capita carbon emissions increase. Kul et al. evaluated the renewable energy investment risk factors for Turkey’s long-term development. This study uses a three-stage decision framework based on the multi-criteria decision methodology (MCDM) to assess and examine the risk factors of REIs in Turkey. The Delphi approach identifies REI risk factors in the first stage. The analytical hierarchy process is used in the second stage to examine the discovered REI risk factors (AHP). The third stage involves applying fuzzy weighted aggregated sum product assessment to evaluate and prioritize methods for overcoming risk issues in REI projects (FWASPAS). The Delphi technique discovered six primary risk variables and 23 sub-risk factors. Economic and commercial risks emerged as prominent risk factors in AHP research. The energy plan for a new era of economic development in Vietnam was examined by Nong et al. (2020) . The prospective implications of such a new power strategy in Vietnam are examined in this research by extending an economic electricity-detailed model. We found that, under a 2030 target scenario, the policy will lower the prices of both fossil- and renewable-based power by 40–78%, benefiting all sectors of the economy by allowing them to replace fossil fuels. Households benefit the most, as indicated by improvements in the per capita utility of 5.64–19.19%. Overall, the Vietnamese economy benefits greatly from the various scenarios, with real GDP increasing by 5.44–24.83%, significantly greater than the results in other countries. Nguyen et al. describe the economic potential of renewable energy in the Vietnam’s electrical industry. In a baseline scenario without renewables, coal provides 44% of total electricity generation from 2010 to 2030. Renewable energy has the potential to reduce that amount to 39%, as well as the sector’s overall CO 2 emissions by 8%, SO 2 by 3%, and NOx by 4%. Furthermore, renewables have the potential to avoid the construction of 4.4 GW of fossil fuel generating capacity, save local coal, and minimize coal and gas imports, therefore boosting energy independence and security. Omri et al. demonstrate how renewable energy helps offset the adverse effects of environmental issues on socio-economic well-being. The findings of this article demonstrate that 1) CO 2 emissions have unconditionally adverse effects on human development and economic growth; 2) the net impact on human growth of the economy from the interaction among renewable power and carbon intensity are positive, that is, renewable energy reduces the impacts of per capita CO 2 emissions on human development and economic growth; and 3) sustainable energy interacts with CO 2 frequency and carbon intensity from liquid fuels.

Conclusion and Policy Implications

Global warming, environmental pollution, and other related issues are no more country-specific problems now. For power generation and carbon dioxide sequestration, the clean development mechanism involves the massive deployment of renewable energy technologies to promote the concept of sustainable development ( Latake et al., 2015 ). In addition to the (greenhouse gas) GHG mitigating potential of renewable energy resources, the energy security guarantee is swiftly becoming a reality with the exploitation of different renewable energy resources. The clean development mechanism is a fundamental idea of the Kyoto Protocol under the canopy of the United Nations Framework on Convention on Climate Change (UNFCCC). However, it was envisaged that the industrialized nations would finance emission reduction mechanisms whereby the fund will be given to developing countries as sponsorship for renewable energy programs. To mitigate this problem, introducing more green technologies and renewable energy sources can be a solution. But, uncertainty, input–output cost analysis, higher production and maintenance cost, skill workforce, enough financial strengths, awareness etc ., are only a few challenges toward mass sustainable energy development. Thus, in comparison of the effects of feed-in tariff (FIT) with a renewable portfolio standard (RPS) in the developing renewable energy industry uncertainty, FIT has higher expected output and profit and lower market prices. On the other hand, the production and profit of RPS remain relatively more stable. If the cost of renewable energy is high, the incentive effect of the policy under FIT seems better. As the price goes down, the incentive effect under RPS probably continues to rise. According to the aforementioned research, it is found out that the renewable energy sector plays a very vital role in the overall growth of the country. Developing a more renewable energy system is necessary for Pakistan, Bangladesh, and Nigeria.

Renewable energy and natural resources significantly reduce emissions ( Usman and Lorente, 2022 ). Consequently, the environmental impact of CO 2 emissions requires widespread monitoring worldwide to analyze the effects on climate change (eg., floods, landslides, droughts, and increase in global average temperature). All these effects weigh under the economic conditions of each country ( Halldó rsson and Kovács, 2010 ). As Hao et al. (2021) , green growth and eco-innovation revolutionize the industrial structure. The G7 countries must focus on a green growth strategy to achieve the SDGs.

In the renewable energy capacity in Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam, it is found that Indonesia plays a vital role using the renewable energy system in the country’s economic growth. The installed capacity of the renewable energy system in Indonesia is 14,690,000 MW. On the other hand, the Pakistan study looked at how different types of energy, such as renewables, fossil fuels, oil-based electrical generation, and hydroelectric power, can affect the output level in Pakistan. Our study concludes that while using fossil fuels to boost economic growth may be beneficial in the early stages of production, it is not helpful in the later stages of production. Whereas using clean energy may not be beneficial in the early stages of production in expanding production activities in developing countries, it is beneficial in the later stages of production not only for production but also for the environment. Policy makers should speed up the deep reforms regarding renewable energy to mitigate environmental degradation ( Koengkan et al., 2020b ). It has been proven that globalization can stimulate renewable energy sources for Latin American countries ( Koengkan et al., 2020a ). This will be beneficial in the region and at the world stage, developing green energy technologies. Thus, it is suggested that policy makers take advantage of globalization to reduce the costs of RE technologies and develop policies encouraging the access of these technologies by households with low income.

This is to note that the study has some limitations. For example, in this article, we have considered mainly G7 and N-11 countries which reflect primarily developed and developing countries. Meanwhile, many underdeveloped countries were not considered in the study. In addition, we have taken the last 10 years (2010–2021) of published articles for this systematic review. But the world economic conditions have been changing rapidly among nations. If we would consider the recent 5 years, the outcome of the review process may vary.

Furthermore, we have only analyzed English language articles. But there may be other critically related articles published in local languages such as Mandarin Chinese, Russians, and Spanish. Thus, we believe there is scope for more research on this topic area.

Data Availability Statement

The original contributions presented in the study are included in the article/Supplementary Material, further inquiries can be directed to the corresponding author.

Author Contributions

MB: conceptualization, methodology, resources and software, writing—original draft, and supervision. VK: original draft. AM: investigation, methodology, writing—original draft, supervision, and formal analysis. GP: data curation, validation, writing—original draft, and writing—review and editing. QZ: Revise, Proofread. XH: Proofread.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher’s Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors, and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Acknowledgments

We thank the financial support of Széchenyi 2020 under the “EFOP-3.6.1-16-2016-00015.”

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AHP analytical hierarchy process

ARDL autoregressive-distributed lag

Brics Brazil, Russia, India, China, South Africa

CAES computer-assisted execution system

CO 2 carbon dioxide

COVID-19 coronavirus disease variant

CSARDL cross sectionally augmented autoregressive distributed lag

CSP concentrated solar power

DEA data envelopment analysis

EDI economic development indicators

ET environmental taxes

FDI foreign direct investment

FIT feed-in tariff

FWASPAS fuzzy weighted aggregated sum product assessment

G7 Group of Seven

GDP gross domestic product

GG green growth

GHG greenhouse gas

GMM generalized method of moments

HC human capital

HRES hybrid renewable energy systems renewable energy

KOF Konjunkturforschungsstelle

MCDM multi-criteria decision methodology

MLA Modern Language Association

N-11 Next-11

NARDL non-linear autoregressive-distributed lagged model

NOX nitric oxide

NPV net present value

OECD Organization for Economic Co-Operation and Development

PHCN Power Holding Company of Nigeria

PMG Pooled Mean Group

PRISMA preferred reporting items for systematic reviews and meta-analyses

PV photovoltaic

PVAR panel vector autoregression

R&D research and development

RE renewable energy

REC renewble energy consumption

RECAI Company’s Renewable Energy Country Attractiveness Index

REI renewble energy investment

RES renewable energy sources

RPS renewable portfolio standard

RWA rolling window approach

SCI/SSCI science citation index/social sciences citation index

SDGs sustainable development goals

SO 2 sulfur dioxide

UNFCCC United Nations Framework Convention on Climate Change

Keywords: renewable energy, economic growth, consumption, Next-11 countries, Group 7

Citation: Bhuiyan MA, Zhang Q, Khare V, Mikhaylov A, Pinter G and Huang X (2022) Renewable Energy Consumption and Economic Growth Nexus—A Systematic Literature Review. Front. Environ. Sci. 10:878394. doi: 10.3389/fenvs.2022.878394

Received: 21 February 2022; Accepted: 28 March 2022; Published: 29 April 2022.

Reviewed by:

Copyright © 2022 Bhuiyan, Zhang, Khare, Mikhaylov, Pinter and Huang. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

*Correspondence: Gabor Pinter, [email protected]

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Climate Forward

The shift to renewable energy is speeding up. here’s how..

The head of the world’s leading energy organization called the war in Ukraine an “accelerator” of the transition.

By Somini Sengupta

Wars have unintended consequences.

Russia’s war in Ukraine seems to have sped up the global energy transition from fossil fuels to renewables.

This is a big deal. Most of us take for granted that we will enter a dark room and flick on the lights, that our homes will be warm in winter, that we will look out the window of a car and watch the world go by.

But what powers our lives is undergoing a huge change.

Consider three recent developments.

First, according to the International Energy Agency, an estimated $1.4 trillion poured into “clean energy” projects in 2022, a category that includes solar farms, batteries and electric vehicle charging stations. That’s more than ever before, and more than the money that poured into new oil and gas projects. Fatih Birol, the head of the agency, described the energy crisis spurred by the Russian invasion as “an accelerator for clean energy transitions.”

Second, BloombergNEF, a research firm, described this direction of change in a report published last week . Investments in low-carbon energy “reached parity” with capital aimed at expanding fossil fuels, it said.

And finally, the oil giant BP said this week that it expected the war in Ukraine would push countries to ramp up renewable energy projects for the sake of energy security, and that oil and gas demand could peak sooner than the company had anticipated just a year ago.

Spoiler alert: The shift away from fossil fuels isn’t happening fast enough to stay within relatively safe boundaries of climate change. For that to happen, a handful of big emerging economies in Asia, Africa and Latin America will need more renewable energy projects. Financing those projects is more expensive in the countries of the global south than it would be in Europe and North America.

You’re going to hear a lot more going forward about the energy transition. It’s worth pausing for a minute today and looking at how big these changes are.

Energy security doesn’t mean fossil fuels anymore.

Nearly a year ago, right after the Russian invasion, the oil and gas industry made a full-throated pitch that it was key to energy security and affordability. For a while, there was lots of hand-wringing about whether the world’s climate goals would be sacrificed at the altar of energy security.

But since then, renewable projects have been ramped up, not just on climate grounds, but rather in the name of energy security. Renewables are increasingly affordable, once they’re built, and they offer security as well.

In Europe, wind and solar accounted for 22 percent of electricity generation last year, overtaking for the first time the share of gas (20 percent) and coal (16 percent), according to Ember, a research firm .

“In 2023, Europe is set to witness a huge fall in fossil fuels — of coal power, yes, but especially gas power,” said the Ember report, which published on Tuesday.

Globally, renewable energy installations grew by 25 percent in 2022.

China’s investments exceeded, by a long shot, that of every other country.

Especially in the industrialized world, many people are going electric.

Never mind Tesla’s troubles. The electric car transition is in high gear.

In 2022, nearly 15 percent of all new car sales globally were electric, compared to 3 percent of all new car sales in 2019, according to the I.E.A . China dominates the market. More electric cars were sold in China than anywhere else. China’s biggest electric car and bus maker, BYD, has a higher global market share than Tesla.

At this pace, Birol said in an interview with Times journalists on Friday, by 2030, every second car sold in the biggest car markets — China, the United States and Europe — will be powered by electricity, not fossil fuels.

The heat pump became a hot item, especially in Europe this winter.

That’s a huge shift. For more than a hundred years, we have heated buildings with coal, oil, gas and wood. Globally, heat pump sales grew by 15 percent, according to the I.E.A. In some European countries, sales doubled in the first few months of 2022, following the Russian invasion of Ukraine.

We’re not moving fast enough, though.

These changes, accelerated by the Russian invasion, are improving the world’s “clean energy transition prospects,” Birol said, though it will not be enough to stay within what scientists consider safe boundaries: limiting average global temperature rise to 1.5 degree Celsius between the mid-19th century and the end of this century.

That will need better financing terms for emerging economies.

I hear this often from diplomats and entrepreneurs trying to build renewable energy projects in countries like India, Brazil and South Africa. It’s still way too expensive to borrow money.

If you want to develop a solar project in Brazil or India, Birol said, you’re likely to pay three times more for financing than if you were to build the same project in Europe.

That has huge climate implications. The energy demands of these big emerging economies are growing fast. If they can’t finance renewables, they’ll turn to gas instead. Or worse, to coal.

“The biggest hurdle in front of us is the cost of capital,” Birol said.

From the Wirecutter

The New York Times product review website suggests 10 free, or nearly free, ways to save money on heat and hot water .

Essential news from The Times

On the industry payroll: The health risks of gas stoves are under close scrutiny. Meet the scientist who gets paid by fossil fuel interests to speak on their behalf .

Alaska mine project blocked: The E.P.A. will ban the disposal of industrial waste in the Bristol Bay watershed, killing plans for a mine that could have threatened a rich salmon fishery .

Climate start-ups shine: Tech workers and investors are flocking to start-ups that aim to combat climate change .

The earth moves: Regulators and scientists say fracking operations are causing a surge in seismic activity in Texas .

China’s slowdown: Oil and gas consumption fell in 2022 for the first time since 1990 as the government kept many cities under lockdown. A rebound is expected this year .

A less green Baghdad: A real estate boom in one of the largest cities in the Arab world is erasing the gardens that have helped to moderate temperature increases .

Unexpected fishing buddies: Bottlenose dolphins and Brazilian fishermen are cooperating. It means more fish for both .

From outside The Times

The Science Friday podcast interviewed Juan Pablo Culasso, a professional birder who is blind, about designing accessible forest trails in his native Colombia .

From Bloomberg: A prominent investment research firm assailed Gautam Adani, the Indian tycoon who made a fortune from coal. Adani has lost billions since .

Yale Climate Connections recommended twelve books with advice for people who want to take action on climate change .

The Albuquerque Journal reported on companies using oil drilling technology to tap New Mexico’s geothermal potential .

The Colorado River can no longer meet the water needs of an arid West. The Los Angeles Times is documenting the crisis in a series of articles, videos and podcasts .

Before you go: How to not be complicit

The Indigenous author and scientist Robin Wall Kimmerer is a messenger for ecological care. In an interview with The New York Times Magazine, she talks about how it’s possible for humans to live well and for nature to flourish, and about ways to push back at the powerful forces of destruction around us. “I can’t topple Monsanto, but I can plant an organic garden ,” she said.

Thanks for being a subscriber. We’ll be back on Friday.

Manuela Andreoni, Claire O’Neill and Douglas Alteen contributed to Climate Forward. Read past editions of the newsletter here .

If you’re enjoying what you’re reading, please consider recommending it to others. They can sign up here . Browse all of our subscriber-only newsletters here .

Reach us at [email protected] . We read every message, and reply to many!

Somini Sengupta is The Times’s international climate correspondent. She has also covered the Middle East, West Africa and South Asia and is the author of the book, “The End of Karma: Hope and Fury Among India’s Young.” More about Somini Sengupta

Renewable Energy

Renewable energy comes from sources that will not be used up in our lifetimes, such as the sun and wind.

Earth Science, Experiential Learning, Engineering, Geology

Wind Turbines in a Sheep Pasture

Wind turbines use the power of wind to generate energy. This is just one source of renewable energy.

Photograph by Jesus Keller/ Shutterstock

The wind, the sun, and Earth are sources of  renewable energy . These energy sources naturally renew, or replenish themselves.

Wind, sunlight, and the planet have energy that transforms in ways we can see and feel. We can see and feel evidence of the transfer of energy from the sun to Earth in the sunlight shining on the ground and the warmth we feel when sunlight shines on our skin. We can see and feel evidence of the transfer of energy in wind’s ability to pull kites higher into the sky and shake the leaves on trees. We can see and feel evidence of the transfer of energy in the geothermal energy of steam vents and geysers .

People have created different ways to capture the energy from these renewable sources.

Solar Energy

Solar energy can be captured “actively” or “passively.”

Active solar energy uses special technology to capture the sun’s rays. The two main types of equipment are photovoltaic cells (also called PV cells or solar cells) and mirrors that focus sunlight in a specific spot. These active solar technologies use sunlight to generate electricity , which we use to power lights, heating systems, computers, and televisions.

Passive solar energy does not use any equipment. Instead, it gets energy from the way sunlight naturally changes throughout the day. For example, people can build houses so their windows face the path of the sun. This means the house will get more heat from the sun. It will take less energy from other sources to heat the house.

Other examples of passive solar technology are green roofs , cool roofs, and radiant barriers . Green roofs are completely covered with plants. Plants can get rid of pollutants in rainwater and air. They help make the local environment cleaner.

Cool roofs are painted white to better reflect sunlight. Radiant barriers are made of a reflective covering, such as aluminum. They both reflect the sun’s heat instead of absorbing it. All these types of roofs help lower the amount of energy needed to cool the building.

Advantages and Disadvantages There are many advantages to using solar energy. PV cells last for a long time, about 20 years.

However, there are reasons why solar power cannot be used as the only power source in a community. It can be expensive to install PV cells or build a building using passive solar technology.

Sunshine can also be hard to predict. It can be blocked by clouds, and the sun doesn’t shine at night. Different parts of Earth receive different amounts of sunlight based on location, the time of year, and the time of day.

Wind Energy

People have been harnessing the wind’s energy for a long, long time. Five-thousand years ago, ancient Egyptians made boats powered by the wind. In 200 B.C.E., people used windmills to grind grain in the Middle East and pump water in China.

Today, we capture the wind’s energy with wind turbines . A turbine is similar to a windmill; it has a very tall tower with two or three propeller-like blades at the top. These blades are turned by the wind. The blades turn a generator (located inside the tower), which creates electricity.

Groups of wind turbines are known as wind farms . Wind farms can be found near farmland, in narrow mountain passes, and even in the ocean, where there are steadier and stronger winds. Wind turbines anchored in the ocean are called “ offshore wind farms.”

Wind farms create electricity for nearby homes, schools, and other buildings.

Advantages and Disadvantages Wind energy can be very efficient . In places like the Midwest in the United States and along coasts, steady winds can provide cheap, reliable electricity.

Another great advantage of wind power is that it is a “clean” form of energy. Wind turbines do not burn fuel or emit any pollutants into the air.

Wind is not always a steady source of energy, however. Wind speed changes constantly, depending on the time of day, weather , and geographic location. Currently, it cannot be used to provide electricity for all our power needs.

Wind turbines can also be dangerous for bats and birds. These animals cannot always judge how fast the blades are moving and crash into them.

Geothermal Energy

Deep beneath the surface is Earth’s core . The center of Earth is extremely hot—thought to be over 6,000 °C (about 10,800 °F). The heat is constantly moving toward the surface.

We can see some of Earth’s heat when it bubbles to the surface. Geothermal energy can melt underground rocks into magma and cause the magma to bubble to the surface as lava . Geothermal energy can also heat underground sources of water and force it to spew out from the surface. This stream of water is called a geyser.

However, most of Earth’s heat stays underground and makes its way out very, very slowly.

We can access underground geothermal heat in different ways. One way of using geothermal energy is with “geothermal heat pumps.” A pipe of water loops between a building and holes dug deep underground. The water is warmed by the geothermal energy underground and brings the warmth aboveground to the building. Geothermal heat pumps can be used to heat houses, sidewalks, and even parking lots.

Another way to use geothermal energy is with steam. In some areas of the world, there is underground steam that naturally rises to the surface. The steam can be piped straight to a power plant. However, in other parts of the world, the ground is dry. Water must be injected underground to create steam. When the steam comes to the surface, it is used to turn a generator and create electricity.

In Iceland, there are large reservoirs of underground water. Almost 90 percent of people in Iceland use geothermal as an energy source to heat their homes and businesses.

Advantages and Disadvantages An advantage of geothermal energy is that it is clean. It does not require any fuel or emit any harmful pollutants into the air.

Geothermal energy is only avaiable in certain parts of the world. Another disadvantage of using geothermal energy is that in areas of the world where there is only dry heat underground, large quantities of freshwater are used to make steam. There may not be a lot of freshwater. People need water for drinking, cooking, and bathing.

Biomass Energy

Biomass is any material that comes from plants or microorganisms that were recently living. Plants create energy from the sun through photosynthesis . This energy is stored in the plants even after they die.

Trees, branches, scraps of bark, and recycled paper are common sources of biomass energy. Manure, garbage, and crops , such as corn, soy, and sugar cane, can also be used as biomass feedstocks .

We get energy from biomass by burning it. Wood chips, manure, and garbage are dried out and compressed into squares called “briquettes.” These briquettes are so dry that they do not absorb water. They can be stored and burned to create heat or generate electricity.

Biomass can also be converted into biofuel . Biofuels are mixed with regular gasoline and can be used to power cars and trucks. Biofuels release less harmful pollutants than pure gasoline.

Advantages and Disadvantages A major advantage of biomass is that it can be stored and then used when it is needed.

Growing crops for biofuels, however, requires large amounts of land and pesticides . Land could be used for food instead of biofuels. Some pesticides could pollute the air and water.

Biomass energy can also be a nonrenewable energy source. Biomass energy relies on biomass feedstocks—plants that are processed and burned to create electricity. Biomass feedstocks can include crops, such as corn or soy, as well as wood. If people do not replant biomass feedstocks as fast as they use them, biomass energy becomes a non-renewable energy source.

Hydroelectric Energy

Hydroelectric energy is made by flowing water. Most hydroelectric power plants are located on large dams , which control the flow of a river.

Dams block the river and create an artificial lake, or reservoir. A controlled amount of water is forced through tunnels in the dam. As water flows through the tunnels, it turns huge turbines and generates electricity.

Advantages and Disadvantages Hydroelectric energy is fairly inexpensive to harness. Dams do not need to be complex, and the resources to build them are not difficult to obtain. Rivers flow all over the world, so the energy source is available to millions of people.

Hydroelectric energy is also fairly reliable. Engineers control the flow of water through the dam, so the flow does not depend on the weather (the way solar and wind energies do).

However, hydroelectric power plants are damaging to the environment. When a river is dammed, it creates a large lake behind the dam. This lake (sometimes called a reservoir) drowns the original river habitat deep underwater. Sometimes, people build dams that can drown entire towns underwater. The people who live in the town or village must move to a new area.

Hydroelectric power plants don’t work for a very long time: Some can only supply power for 20 or 30 years. Silt , or dirt from a riverbed, builds up behind the dam and slows the flow of water.

Other Renewable Energy Sources

Scientists and engineers are constantly working to harness other renewable energy sources. Three of the most promising are tidal energy , wave energy , and algal (or algae) fuel.

Tidal energy harnesses the power of ocean tides to generate electricity. Some tidal energy projects use the moving tides to turn the blades of a turbine. Other projects use small dams to continually fill reservoirs at high tide and slowly release the water (and turn turbines) at low tide.

Wave energy harnesses waves from the ocean, lakes, or rivers. Some wave energy projects use the same equipment that tidal energy projects do—dams and standing turbines. Other wave energy projects float directly on waves. The water’s constant movement over and through these floating pieces of equipment turns turbines and creates electricity.

Algal fuel is a type of biomass energy that uses the unique chemicals in seaweed to create a clean and renewable biofuel. Algal fuel does not need the acres of cropland that other biofuel feedstocks do.

Renewable Nations

These nations (or groups of nations) produce the most energy using renewable resources. Many of them are also the leading producers of nonrenewable energy: China, European Union, United States, Brazil, and Canada

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• ENVIRONMENT

Renewable energy, explained

Solar, wind, hydroelectric, biomass, and geothermal power can provide energy without the planet-warming effects of fossil fuels.

In any discussion about climate change , renewable energy usually tops the list of changes the world can implement to stave off the worst effects of rising temperatures. That's because renewable energy sources such as solar and wind don't emit carbon dioxide and other greenhouse gases that contribute to global warming .

Clean energy has far more to recommend it than just being "green." The growing sector creates jobs , makes electric grids more resilient, expands energy access in developing countries, and helps lower energy bills. All of those factors have contributed to a renewable energy renaissance in recent years, with wind and solar setting new records for electricity generation .

For the past 150 years or so, humans have relied heavily on coal, oil, and other fossil fuels to power everything from light bulbs to cars to factories. Fossil fuels are embedded in nearly everything we do, and as a result, the greenhouse gases released from the burning of those fuels have reached historically high levels .

As greenhouse gases trap heat in the atmosphere that would otherwise escape into space, average temperatures on the surface are rising . Global warming is one symptom of climate change, the term scientists now prefer to describe the complex shifts affecting our planet’s weather and climate systems. Climate change encompasses not only rising average temperatures but also extreme weather events, shifting wildlife populations and habitats, rising seas , and a range of other impacts .

Of course, renewables—like any source of energy—have their own trade-offs and associated debates. One of them centers on the definition of renewable energy. Strictly speaking, renewable energy is just what you might think: perpetually available, or as the U.S. Energy Information Administration puts it, " virtually inexhaustible ." But "renewable" doesn't necessarily mean sustainable, as opponents of corn-based ethanol or large hydropower dams often argue. It also doesn't encompass other low- or zero-emissions resources that have their own advocates, including energy efficiency and nuclear power.

Types of renewable energy sources

Hydropower: For centuries, people have harnessed the energy of river currents, using dams to control water flow. Hydropower is the world's biggest source of renewable energy by far, with China, Brazil, Canada, the U.S., and Russia the leading hydropower producers . While hydropower is theoretically a clean energy source replenished by rain and snow, it also has several drawbacks.

For Hungry Minds

Large dams can disrupt river ecosystems and surrounding communities , harming wildlife and displacing residents. Hydropower generation is vulnerable to silt buildup, which can compromise capacity and harm equipment. Drought can also cause problems. In the western U.S., carbon dioxide emissions over a 15-year period were 100 megatons higher than they normally would have been, according to a 2018 study , as utilities turned to coal and gas to replace hydropower lost to drought. Even hydropower at full capacity bears its own emissions problems, as decaying organic material in reservoirs releases methane.

Dams aren't the only way to use water for power: Tidal and wave energy projects around the world aim to capture the ocean's natural rhythms. Marine energy projects currently generate an estimated 500 megawatts of power —less than one percent of all renewables—but the potential is far greater. Programs like Scotland’s Saltire Prize have encouraged innovation in this area.

Wind: Harnessing the wind as a source of energy started more than 7,000 years ago . Now, electricity-generating wind turbines are proliferating around the globe, and China, the U.S., and Germany are the leading wind energy producers. From 2001 to 2017 , cumulative wind capacity around the world increased to more than 539,000 megawatts from 23,900 mw—more than 22 fold.

Some people may object to how wind turbines look on the horizon and to how they sound, but wind energy, whose prices are declining , is proving too valuable a resource to deny. While most wind power comes from onshore turbines, offshore projects are appearing too, with the most in the U.K. and Germany. The first U.S. offshore wind farm opened in 2016 in Rhode Island, and other offshore projects are gaining momentum . Another problem with wind turbines is that they’re a danger for birds and bats, killing hundreds of thousands annually , not as many as from glass collisions and other threats like habitat loss and invasive species, but enough that engineers are working on solutions to make them safer for flying wildlife.

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Solar: From home rooftops to utility-scale farms, solar power is reshaping energy markets around the world. In the decade from 2007 and 2017 the world's total installed energy capacity from photovoltaic panels increased a whopping 4,300 percent .

In addition to solar panels, which convert the sun's light to electricity, concentrating solar power (CSP) plants use mirrors to concentrate the sun's heat, deriving thermal energy instead. China, Japan, and the U.S. are leading the solar transformation, but solar still has a long way to go, accounting for around two percent of the total electricity generated in the U.S. in 2017. Solar thermal energy is also being used worldwide for hot water, heating, and cooling.

Biomass: Biomass energy includes biofuels such as ethanol and biodiesel , wood and wood waste, biogas from landfills, and municipal solid waste. Like solar power, biomass is a flexible energy source, able to fuel vehicles, heat buildings, and produce electricity. But biomass can raise thorny issues.

Critics of corn-based ethanol , for example, say it competes with the food market for corn and supports the same harmful agricultural practices that have led to toxic algae blooms and other environmental hazards. Similarly, debates have erupted over whether it's a good idea to ship wood pellets from U.S. forests over to Europe so that it can be burned for electricity. Meanwhile, scientists and companies are working on ways to more efficiently convert corn stover , wastewater sludge , and other biomass sources into energy, aiming to extract value from material that would otherwise go to waste.

Geothermal: Used for thousands of years in some countries for cooking and heating, geothermal energy is derived from the Earth’s internal heat . On a large scale, underground reservoirs of steam and hot water can be tapped through wells that can go a mile deep or more to generate electricity. On a smaller scale, some buildings have geothermal heat pumps that use temperature differences several feet below ground for heating and cooling. Unlike solar and wind energy, geothermal energy is always available, but it has side effects that need to be managed, such as the rotten egg smell that can accompany released hydrogen sulfide.

Ways to boost renewable energy

Cities, states, and federal governments around the world are instituting policies aimed at increasing renewable energy. At least 29 U.S. states have set renewable portfolio standards —policies that mandate a certain percentage of energy from renewable sources, More than 100 cities worldwide now boast at least 70 percent renewable energy, and still others are making commitments to reach 100 percent . Other policies that could encourage renewable energy growth include carbon pricing, fuel economy standards, and building efficiency standards. Corporations are making a difference too, purchasing record amounts of renewable power in 2018.

Wonder whether your state could ever be powered by 100 percent renewables? No matter where you live, scientist Mark Jacobson believes it's possible. That vision is laid out here , and while his analysis is not without critics , it punctuates a reality with which the world must now reckon. Even without climate change, fossil fuels are a finite resource, and if we want our lease on the planet to be renewed, our energy will have to be renewable.

Related Topics

• SUSTAINABILITY
• RENEWABLE ENERGY
• GEOTHERMAL ENERGY
• SOLAR POWER
• HYDROELECTRIC POWER
• CLIMATE CHANGE

Activists fear a new threat to biodiversity—renewable energy

How the Ukraine war is accelerating Germany's renewable energy transition

We took the Great American Road Trip—in electric cars

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Renewable Energy

Renewable energy sources are growing quickly and will play a vital role in tackling climate change..

Since the Industrial Revolution, the energy mix of most countries across the world has become dominated by fossil fuels. This has major implications for the global climate, as well as for human health. Three-quarters of global greenhouse gas emissions result from the burning of fossil fuels for energy. Fossil fuels are responsible for large amounts of local air pollution – a health problem that leads to at least 5 million premature deaths each year.

To reduce CO 2 emissions and local air pollution, the world needs to rapidly shift towards low-carbon sources of energy – nuclear and renewable technologies.

Renewable energy will play a key role in decarbonizing our energy systems in the coming decades. But how rapidly is our production of renewable energy changing? What technologies look most promising in transforming our energy mix?

In this article we look at the data on renewable energy technologies across the world; what share of energy they account for today, and how quickly this is changing.

Renewable energy generation

How much of our primary energy comes from renewables.

We often hear about the rapid growth of renewable technologies in media reports. But how much of an impact has this growth had on our energy systems?

In this interactive chart, we see the share of primary energy consumption that came from renewable technologies – the combination of hydropower, solar, wind, geothermal, wave, tidal, and modern biofuels. Traditional biomass – which can be an important energy source in lower-income settings is not included.

Note that this data is based on primary energy calculated by the 'substitution method' which attempts to correct for the inefficiencies in fossil fuel production. It does this by converting non-fossil fuel sources to their 'input equivalents': the amount of primary energy that would be required to produce the same amount of energy if it came from fossil fuels.

Approximately one-seventh of the world's primary energy is now sourced from renewable technologies.

Note that this is based on renewable energy's share in the energy mix. Energy consumption represents the sum of electricity, transport, and heating. We look at the electricity mix later in this article.

Breakdown of renewables in the energy mix

In the section above we looked at what share renewable technologies collectively accounted for in the energy mix.

In the charts shown here, we look at the breakdown of renewable technologies by their components – hydropower, solar, wind, and others.

The first chart shows this as a stacked area chart, which allows us to more readily see the breakdown of the renewable mix and the relative contribution of each. The second chart is shown as a line chart, allowing us to see more clearly how each source is changing over time.

Globally we see that hydropower is by far the largest modern renewable source. However, we also see wind and solar power both growing rapidly.

Renewables in the electricity mix

How much of our electricity comes from renewables.

In the sections above we looked at the role of renewables in the total energy mix . This includes not only electricity but also transport and heating. Electricity forms only one component of energy consumption.

Since transport and heating tend to be harder to decarbonize – they are more reliant on oil and gas – renewables tend to have a higher share in the electricity mix versus the total energy mix.

This interactive chart shows the share of electricity that comes from renewable technologies.

Globally, almost one-third of our electricity comes from renewables.

Hydropower generation

Hydroelectric power has been one of our oldest and largest sources of low-carbon energy. Hydroelectric generation at scale dates back more than a century, and is still our largest renewable source – excluding traditional biomass, it still accounts for approximately half of renewable generation.

However, the scale of hydroelectric power generation varies significantly across the world. This interactive chart shows its contribution by country.

Share of primary energy that comes from hydropower

This interactive chart shows the share of primary energy that comes from hydropower.

Share of electricity that comes from hydropower

This interactive chart shows the share of electricity that comes from hydropower.

Wind energy

Wind energy generation.

This interactive chart shows the amount of energy generated from wind each year. This includes both onshore and offshore wind farms.

Wind generation at scale – compared to hydropower, for example – is a relatively modern renewable energy source but is growing quickly in many countries across the world.

Installed wind capacity

The previous section looked at the energy output from wind farms across the world. Energy output is a function of power (installed capacity) multiplied by the time of generation.

Energy generation is therefore a function of how much wind capacity is installed. This interactive chart shows installed wind capacity – including both onshore and offshore – across the world.

Share of primary energy that comes from wind

This interactive chart shows the share of primary energy that comes from wind.

Share of electricity that comes from wind

This interactive chart shows the share of electricity that comes from wind.

Solar energy

Solar energy generation.

This interactive chart shows the amount of energy generated from solar power each year.

Solar generation at scale – compared to hydropower, for example – is a relatively modern renewable energy source but is growing quickly in many countries across the world.

Installed solar capacity

The previous section looked at the energy output from solar across the world. Energy output is a function of power (installed capacity) multiplied by the time of generation.

Energy generation is therefore a function of how much solar capacity is installed. This interactive chart shows installed solar capacity across the world.

Share of primary energy that comes from solar

This interactive chart shows the share of primary energy that comes from solar power.

Share of electricity that comes from solar

This interactive chart shows the share of electricity that comes from solar power.

Biofuel production

Traditional biomass – the burning of charcoal, organic wastes, and crop residues – was an important energy source for a long period of human history. It remains an important source in lower-income settings today. However, high-quality estimates of energy consumption from these sources are difficult to find. The Energy Institute Statistical Review of World Energy – our main data source on energy – only publishes data on commercially traded energy, so traditional biomass is not included.

However, modern biofuels are included in this energy data. Bioethanol and biodiesel – fuel made from crops such as corn, sugarcane, hemp, and cassava – are now a key transport fuel in many countries.

This interactive chart shows modern biofuel production across the world.

Installed geothermal capacity

This interactive chart shows the installed capacity of geothermal energy across the world.

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Renewable-energy development in a net-zero world

The rapid maturation of wind and solar power has been nothing short of astonishing. Not long ago, the development of new solar and wind farms was typically driven by small regional players, and the cost was significantly higher than that of a coal plant. Today, the cost of renewables has plummeted, and many solar and wind projects are undertaken by large multinational companies, which often also announce staggering development targets.

About the authors

This article is a collaborative effort by Florian Heineke, Nadine Janecke, Holger Klärner, Florian Kühn , Humayun Tai , and Raffael Winter , representing views from McKinsey’s Electric Power & Natural Gas Practice.

Over the past decade, the growth of renewable energy has consistently and dramatically outperformed nearly all expectations (Exhibit 1). Upward corrections of estimates have become something of a ritual.

But this growth story is just getting started. As countries aim to reach ambitious decarbonization targets, renewable energy—led by wind and solar—is poised to become the backbone of the world’s power supply. Along with capacity additions from major energy providers, new types of players are entering the market (Exhibit 2). Today’s fast followers include major oil and gas companies, which aim to shift their business models to profit from the increased demand for renewables and the electrification of vehicles, and private-equity players and institutional investors that make renewable energy a central component of their investment strategy. Leaders in the shipping industry are investing in renewables to enable the production of hydrogen and ammonia as zero-emission fuel sources; steel manufacturers are eyeing green hydrogen to decarbonize their steel production, with renewables providing the green electricity for the process. Car manufacturing companies are also striking renewable-energy deals to help power their operations and manufacturing, as well as making investments in wind and solar projects.

McKinsey estimates that by 2026, global renewable-electricity capacity will rise more than 80 percent from 2020 levels (to more than 5,022 gigawatts). 1 Global Energy Perspective 2022 , McKinsey, April 2022. Of this growth, two-thirds will come from wind and solar, an increase of 150 percent (3,404 gigawatts). By 2035, renewables will generate 60 percent of the world’s electricity. 2 Global Energy Perspective 2022 , McKinsey, April 2022. But even these projections might be too low. Three years ago, we looked at advances made by renewable energy and asked, “How much faster can they grow?” 3 “ Rethinking the renewable strategy for an age of global competition ,” McKinsey, October 11, 2019. The answer is: faster than you think they can.

Three core capabilities for wind and solar developers

This race to build additional solar and wind capacity increases the pressure on developers to execute efficiently and heightens competition for finite resources. Still, the three winning capabilities we identified three years ago as important for building or expanding a renewables business are even more critical now. They form the bedrock required to tackle upcoming challenges:

• Value-chain excellence. As competition intensifies and government support for renewables subsides, strong capabilities across the entire value chain are the required cost of admission. For instance, gaining access to scarce amounts of attractive land will require differentiation in project origination and development. As margins squeeze and operators’ exposure to risk increases, ambitious companies will want to explore new, profitable offtake markets for their electricity, such as data centers or hydrogen electrolyzers for industrial production.
• Economies of scale and skill. Driven by the rapid scaling of the renewables industry, many players have built efficient operating models. However, finding employees with the necessary skills and capabilities, particularly in high-demand areas such as project development and engineering, is becoming a bottleneck for growth ambitions.
• Agile operating model. Agility and speed will be key in finding innovative ways to integrate partners and in establishing robust, high-performing supply chains. They will also enable businesses to shift resources quickly to the biggest value pools and respond to changes in the landscape, such as shifting regulations or price volatility.

Four challenges that will define the new era of renewable energy

Leveraging these capabilities as a strong foundation, successful renewables developers must navigate an increasingly complex and competitive landscape. Specifically, they will have to focus on and address four emerging challenges:

• A scarcity of top-quality land. Developers are in a constant scramble to identify new sites with increasing speed. Our analysis in Germany, a country aiming to nearly double its share of electricity coming from renewables by 2030, offers a glimpse into the constraints. Of the 51 percent of the country’s land that is potentially suitable for onshore wind farms, regulatory, environmental, and technical constraints eliminate all but 9 percent. 4 McKinsey land use optimization model. Meeting capacity targets will mean adding wind turbines to 4 to 6 percent of the country, giving developers very little room for error.
• A blue-collar and white-collar labor shortage. Across economies, the “Great Attrition” is making it difficult for companies to find and keep employees. Since April 2021, 20 million to 25 million US workers have quit their jobs, and 40 percent of employees globally say they are at least somewhat likely to leave their current position in the next three to six months. 5 Aaron De Smet, Bonnie Dowling, Bryan Hancock, and Bill Schaninger, “ The Great Attrition is making hiring harder. Are you searching the right talent pools? ,” McKinsey Quarterly , July 13, 2022; Table 4. Quits levels and rates by industry and region, seasonally adjusted, US Bureau of Labor Statistics, updated October 4, 2022. This environment presents a particularly acute challenge for industries such as renewable energy, where specific technical expertise and experience are crucial elements of success. For instance, our analysis suggests that between now and 2030, the global renewables industry will need an additional 1.1 million blue-collar workers to develop and construct wind and solar plants, and another 1.7 million to operate and maintain them. 6 Renewable energy benefits: Leveraging local capacity for onshore wind , International Renewable Energy Agency (IRENA), 2017; Renewable energy benefits: Leveraging local capacity for offshore wind , IRENA, 2018; Renewable energy benefits: Leveraging local capacity for solar PV , IRENA, 2017. This includes construction laborers, electricians, truck and semitrailer drivers, and operating engineers.
• Supply chain pressures. The soaring cost of steel, manufacturing disruptions caused by extended lockdowns in China, and transportation backlogs at ports are already making it difficult for wind and solar developers to complete projects in their pipeline on time and on budget. Some of these pressures will abate as others move to the forefront. For instance, many of the raw materials needed to manufacture solar panels and wind turbines are projected to be in short supply. This includes nickel, copper, and rare earth metals such as neodymium and praseodymium, which are indispensable for the creation of magnets used in wind turbine generators.
• Pressure on profits and volatility of returns in the short term. The increasing number of players moving into the renewable-development space, combined with reduced levels of government support and higher costs of materials, technology, and financing, is putting pressure on returns. At the same time, an all-time-high price volatility creates uncertainty and market risk.

Renewables developers will need to act decisively to prepare for these upcoming challenges. In a series of future articles, we provide detailed insights on each of these pressures and share potential ways players can take action.

Florian Heineke is a consultant in McKinsey’s Frankfurt office; Nadine Janecke is an associate partner in the Hamburg office; Holger Klärner is a partner in the Berlin office; Florian Kühn is a partner in the Oslo office; Humayun Tai is a senior partner in the New York office; and Raffael Winter is a partner in the Düsseldorf office.

The authors wish to thank Nadia Christakou, Florent Erbar, David Frankel, Emil Hosius, Anna Kemp, Nadine Palmowski, Andreas Schlosser, Sophia Spitzer, Christian Staudt, and Jakub Zivansky for their contributions to this article.

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Global Energy Perspective 2022

The power sector’s net-zero transition: Scaling up renewables and infrastructure

• Open access
• Published: 07 January 2020

Renewable energy for sustainable development in India: current status, future prospects, challenges, employment, and investment opportunities

• Charles Rajesh Kumar. J   ORCID: orcid.org/0000-0003-2354-6463 1 &
• M. A. Majid 1  

Energy, Sustainability and Society volume  10 , Article number:  2 ( 2020 ) Cite this article

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The primary objective for deploying renewable energy in India is to advance economic development, improve energy security, improve access to energy, and mitigate climate change. Sustainable development is possible by use of sustainable energy and by ensuring access to affordable, reliable, sustainable, and modern energy for citizens. Strong government support and the increasingly opportune economic situation have pushed India to be one of the top leaders in the world’s most attractive renewable energy markets. The government has designed policies, programs, and a liberal environment to attract foreign investments to ramp up the country in the renewable energy market at a rapid rate. It is anticipated that the renewable energy sector can create a large number of domestic jobs over the following years. This paper aims to present significant achievements, prospects, projections, generation of electricity, as well as challenges and investment and employment opportunities due to the development of renewable energy in India. In this review, we have identified the various obstacles faced by the renewable sector. The recommendations based on the review outcomes will provide useful information for policymakers, innovators, project developers, investors, industries, associated stakeholders and departments, researchers, and scientists.

Introduction

The sources of electricity production such as coal, oil, and natural gas have contributed to one-third of global greenhouse gas emissions. It is essential to raise the standard of living by providing cleaner and more reliable electricity [ 1 ]. India has an increasing energy demand to fulfill the economic development plans that are being implemented. The provision of increasing quanta of energy is a vital pre-requisite for the economic growth of a country [ 2 ]. The National Electricity Plan [NEP] [ 3 ] framed by the Ministry of Power (MoP) has developed a 10-year detailed action plan with the objective to provide electricity across the country, and has prepared a further plan to ensure that power is supplied to the citizens efficiently and at a reasonable cost. According to the World Resource Institute Report 2017 [ 4 , 5 ], India is responsible for nearly 6.65% of total global carbon emissions, ranked fourth next to China (26.83%), the USA (14.36%), and the EU (9.66%). Climate change might also change the ecological balance in the world. Intended Nationally Determined Contributions (INDCs) have been submitted to the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. The latter has hoped to achieve the goal of limiting the rise in global temperature to well below 2 °C [ 6 , 7 ]. According to a World Energy Council [ 8 ] prediction, global electricity demand will peak in 2030. India is one of the largest coal consumers in the world and imports costly fossil fuel [ 8 ]. Close to 74% of the energy demand is supplied by coal and oil. According to a report from the Center for monitoring Indian economy, the country imported 171 million tons of coal in 2013–2014, 215 million tons in 2014–2015, 207 million tons in 2015–2016, 195 million tons in 2016–2017, and 213 million tons in 2017–2018 [ 9 ]. Therefore, there is an urgent need to find alternate sources for generating electricity.

In this way, the country will have a rapid and global transition to renewable energy technologies to achieve sustainable growth and avoid catastrophic climate change. Renewable energy sources play a vital role in securing sustainable energy with lower emissions [ 10 ]. It is already accepted that renewable energy technologies might significantly cover the electricity demand and reduce emissions. In recent years, the country has developed a sustainable path for its energy supply. Awareness of saving energy has been promoted among citizens to increase the use of solar, wind, biomass, waste, and hydropower energies. It is evident that clean energy is less harmful and often cheaper. India is aiming to attain 175 GW of renewable energy which would consist of 100 GW from solar energy, 10 GW from bio-power, 60 GW from wind power, and 5 GW from small hydropower plants by the year 2022 [ 11 ]. Investors have promised to achieve more than 270 GW, which is significantly above the ambitious targets. The promises are as follows: 58 GW by foreign companies, 191 GW by private companies, 18 GW by private sectors, and 5 GW by the Indian Railways [ 12 ]. Recent estimates show that in 2047, solar potential will be more than 750 GW and wind potential will be 410 GW [ 13 , 14 ]. To reach the ambitious targets of generating 175 GW of renewable energy by 2022, it is essential that the government creates 330,000 new jobs and livelihood opportunities [ 15 , 16 ].

A mixture of push policies and pull mechanisms, accompanied by particular strategies should promote the development of renewable energy technologies. Advancement in technology, proper regulatory policies [ 17 ], tax deduction, and attempts in efficiency enhancement due to research and development (R&D) [ 18 ] are some of the pathways to conservation of energy and environment that should guarantee that renewable resource bases are used in a cost-effective and quick manner. Hence, strategies to promote investment opportunities in the renewable energy sector along with jobs for the unskilled workers, technicians, and contractors are discussed. This article also manifests technological and financial initiatives [ 19 ], policy and regulatory framework, as well as training and educational initiatives [ 20 , 21 ] launched by the government for the growth and development of renewable energy sources. The development of renewable technology has encountered explicit obstacles, and thus, there is a need to discuss these barriers. Additionally, it is also vital to discover possible solutions to overcome these barriers, and hence, proper recommendations have been suggested for the steady growth of renewable power [ 22 , 23 , 24 ]. Given the enormous potential of renewables in the country, coherent policy measures and an investor-friendly administration might be the key drivers for India to become a global leader in clean and green energy.

Projection of global primary energy consumption

An energy source is a necessary element of socio-economic development. The increasing economic growth of developing nations in the last decades has caused an accelerated increase in energy consumption. This trend is anticipated to grow [ 25 ]. A prediction of future power consumption is essential for the investigation of adequate environmental and economic policies [ 26 ]. Likewise, an outlook to future power consumption helps to determine future investments in renewable energy. Energy supply and security have not only increased the essential issues for the development of human society but also for their global political and economic patterns [ 27 ]. Hence, international comparisons are helpful to identify past, present, and future power consumption.

Table 1 shows the primary energy consumption of the world, based on the BP Energy Outlook 2018 reports. In 2016, India’s overall energy consumption was 724 million tons of oil equivalent (Mtoe) and is expected to rise to 1921 Mtoe by 2040 with an average growth rate of 4.2% per annum. Energy consumption of various major countries comprises commercially traded fuels and modern renewables used to produce power. In 2016, India was the fourth largest energy consumer in the world after China, the USA, and the Organization for economic co-operation and development (OECD) in Europe [ 29 ].

The projected estimation of global energy consumption demonstrates that energy consumption in India is continuously increasing and retains its position even in 2035/2040 [ 28 ]. The increase in India’s energy consumption will push the country’s share of global energy demand to 11% by 2040 from 5% in 2016. Emerging economies such as China, India, or Brazil have experienced a process of rapid industrialization, have increased their share in the global economy, and are exporting enormous volumes of manufactured products to developed countries. This shift of economic activities among nations has also had consequences concerning the country’s energy use [ 30 ].

Projected primary energy consumption in India

The size and growth of a country’s population significantly affects the demand for energy. With 1.368 billion citizens, India is ranked second, of the most populous countries as of January 2019 [ 31 ]. The yearly growth rate is 1.18% and represents almost 17.74% of the world’s population. The country is expected to have more than 1.383 billion, 1.512 billion, 1.605 billion, 1.658 billion people by the end of 2020, 2030, 2040, and 2050, respectively. Each year, India adds a higher number of people to the world than any other nation and the specific population of some of the states in India is equal to the population of many countries.

The growth of India’s energy consumption will be the fastest among all significant economies by 2040, with coal meeting most of this demand followed by renewable energy. Renewables became the second most significant source of domestic power production, overtaking gas and then oil, by 2020. The demand for renewables in India will have a tremendous growth of 256 Mtoe in 2040 from 17 Mtoe in 2016, with an annual increase of 12%, as shown in Table 2 .

Table 3 shows the primary energy consumption of renewables for the BRIC countries (Brazil, Russia, India, and China) from 2016 to 2040. India consumed around 17 Mtoe of renewable energy in 2016, and this will be 256 Mtoe in 2040. It is probable that India’s energy consumption will grow fastest among all major economies by 2040, with coal contributing most in meeting this demand followed by renewables. The percentage share of renewable consumption in 2016 was 2% and is predicted to increase by 13% by 2040.

How renewable energy sources contribute to the energy demand in India

Even though India has achieved a fast and remarkable economic growth, energy is still scarce. Strong economic growth in India is escalating the demand for energy, and more energy sources are required to cover this demand. At the same time, due to the increasing population and environmental deterioration, the country faces the challenge of sustainable development. The gap between demand and supply of power is expected to rise in the future [ 32 ]. Table 4 presents the power supply status of the country from 2009–2010 to 2018–2019 (until October 2018). In 2018, the energy demand was 1,212,134 GWh, and the availability was 1,203,567 GWh, i.e., a deficit of − 0.7% [ 33 ].

According to the Load generation and Balance Report (2016–2017) of the Central Electricity Authority of India (CEA), the electrical energy demand for 2021–2022 is anticipated to be at least 1915 terawatt hours (TWh), with a peak electric demand of 298 GW [ 34 ]. Increasing urbanization and rising income levels are responsible for an increased demand for electrical appliances, i.e., an increased demand for electricity in the residential sector. The increased demand in materials for buildings, transportation, capital goods, and infrastructure is driving the industrial demand for electricity. An increased mechanization and the shift to groundwater irrigation across the country is pushing the pumping and tractor demand in the agriculture sector, and hence the large diesel and electricity demand. The penetration of electric vehicles and the fuel switch to electric and induction cook stoves will drive the electricity demand in the other sectors shown in Table 5 .

According to the International Renewable Energy Agency (IRENA), a quarter of India’s energy demand can be met with renewable energy. The country could potentially increase its share of renewable power generation to over one-third by 2030 [ 35 ].

Table 6 presents the estimated contribution of renewable energy sources to the total energy demand. MoP along with CEA in its draft national electricity plan for 2016 anticipated that with 175 GW of installed capacity of renewable power by 2022, the expected electricity generation would be 327 billion units (BUs), which would contribute to 1611 BU energy requirements. This indicates that 20.3% of the energy requirements would be fulfilled by renewable energy by 2022 and 24.2% by 2027 [ 36 ]. Figure 1 shows the ambitious new target for the share of renewable energy in India’s electricity consumption set by MoP. As per the order of revised RPO (Renewable Purchase Obligations, legal act of June 2018), the country has a target of a 21% share of renewable energy in its total electricity consumption by March 2022. In 2014, the same goal was at 15% and increased to 21% by 2018. It is India’s goal to reach 40% renewable sources by 2030.

Target share of renewable energy in India’s power consumption

Estimated renewable energy potential in India

The estimated potential of wind power in the country during 1995 [ 37 ] was found to be 20,000 MW (20 GW), solar energy was 5 × 10 15 kWh/pa, bioenergy was 17,000 MW, bagasse cogeneration was 8000 MW, and small hydropower was 10,000 MW. For 2006, the renewable potential was estimated as 85,000 MW with wind 4500 MW, solar 35 MW, biomass/bioenergy 25,000 MW, and small hydropower of 15,000 MW [ 38 ]. According to the annual report of the Ministry of New and Renewable Energy (MNRE) for 2017–2018, the estimated potential of wind power was 302.251 GW (at 100-m mast height), of small hydropower 19.749 GW, biomass power 17.536 GW, bagasse cogeneration 5 GW, waste to energy (WTE) 2.554 GW, and solar 748.990 GW. The estimated total renewable potential amounted to 1096.080 GW [ 39 ] assuming 3% wasteland, which is shown in Table 7 . India is a tropical country and receives significant radiation, and hence the solar potential is very high [ 40 , 41 , 42 ].

Gross installed capacity of renewable energy in India

As of June 2018 reports, the country intends to reach 225 GW of renewable power capacity by 2022 exceeding the target of 175 GW pledged during the Paris Agreement. The sector is the fourth most attractive renewable energy market in the world. As in October 2018, India ranked fifth in installed renewable energy capacity [ 43 ].

Gross installed capacity of renewable energy—according to region

Table 8 lists the cumulative installed capacity of both conventional and renewable energy sources. The cumulative installed capacity of renewable sources as on the 31 st of December 2018 was 74081.66 MW. Renewable energy (small hydropower, wind, biomass, WTE, solar) accounted for an approximate 21% share of the cumulative installed power capacity, and the remaining 78.791% originated from other conventional sources (coal, gas diesel, nuclear, and large hydropower) [ 44 ]. The best regions for renewable energy are the southern states that have the highest solar irradiance and wind in the country. When renewable energy alone is considered for analysis, the Southern region covers 49.121% of the cumulative installed renewable capacity, followed by the Western region (29.742%), the Northern region (18.890%), the Eastern region (1.836%), the North-Easter region 0.394%, and the Islands (0.017%). As far as conventional energy is concerned, the Western region with 33.452% ranks first and is followed by the Northern region with 28.484%, the Southern region (24.967%), the Eastern region (11.716%), the Northern-Eastern (1.366%), and the Islands (0.015%).

Gross installed capacity of renewable energy—according to ownership

State government, central government, and private players drive the Indian energy sector. The private sector leads the way in renewable energy investment. Table 9 shows the installed gross renewable energy and conventional energy capacity (percentage)—ownership wise. It is evident from Fig. 2 that 95% of the installed renewable capacity derives from private companies, 2% from the central government, and 3% from the state government. The top private companies in the field of non-conventional energy generation are Tata Power Solar, Suzlon, and ReNew Power. Tata Power Solar System Limited are the most significant integrated solar power players in the country, Suzlon realizes wind energy projects, and ReNew Power Ventures operate with solar and wind power.

Gross renewable energy installed capacity (percentage)—Ownership wise as per the 31.12.2018 [ 43 ]

Gross installed capacity of renewable energy—state wise

Table 10 shows the installed capacity of cumulative renewable energy (state wise), out of the total installed capacity of 74,081.66 MW, where Karnataka ranks first with 12,953.24 MW (17.485%), Tamilnadu second with 11,934.38 MW (16%), Maharashtra third with 9283.78 MW (12.532%), Gujarat fourth with 10.641 MW (10.641%), and Rajasthan fifth with 7573.86 MW (10.224%). These five states cover almost 66.991% of the installed capacity of total renewable. Other prominent states are Andhra Pradesh (9.829%), Madhya Pradesh (5.819%), Telangana (5.137%), and Uttar Pradesh (3.879%). These nine states cover almost 91.655%.

Gross installed capacity of renewable energy—according to source

Under union budget of India 2018–2019, INR 3762 crore (USD 581.09 million), was allotted for grid-interactive renewable power schemes and projects. As per the 31.12.2018, the installed capacity of total renewable power (excluding large hydropower) in the country amounted to 74.08166 GW. Around 9.363 GW of solar energy, 1.766 GW of wind, 0.105 GW of small hydropower (SHP), and biomass power of 8.7 GW capacity were added in 2017–2018. Table 11 shows the installed capacity of renewable energy over the last 10 years until the 31.12.2018. Wind energy continues to dominate the countries renewable energy industry, accounting for over 47% of cumulative installed renewable capacity (35,138.15 MW), followed by solar power of 34% (25,212.26 MW), biomass power/cogeneration of 12% (9075.5 MW), and small hydropower of 6% (4517.45 MW). In the renewable energy country attractiveness index (RECAI) of 2018, India ranked in fourth position. The installed renewable energy production capacity has grown at an accelerated pace over the preceding few years, posting a CAGR of 19.78% between 2014 and 2018 [ 45 ] .

Estimation of the installed capacity of renewable energy

Table 12 gives the share of installed cumulative renewable energy capacity, in comparison with the installed conventional energy capacity. In 2022 and 2032, the installed renewable energy capacity will account for 32% and 35%, respectively [ 46 , 47 ]. The most significant renewable capacity expansion program in the world is being taken up by India. The government is preparing to boost the percentage of clean energy through a tremendous push in renewables, as discussed in the subsequent sections.

Gross electricity generation from renewable energy in India

The overall generation (including the generation from grid-connected renewable sources) in the country has grown exponentially. Between 2014–2015 and 2015–2016, it achieved 1110.458 BU and 1173.603 BU, respectively. The same was recorded with 1241.689 BU and 1306.614 BU during 2015–2016 and 1306.614 BU from 2016–2017 and 2017–2018, respectively. Figure 3 indicates that the annual renewable power production increased faster than the conventional power production. The rise accounted for 6.47% in 2015–2016 and 24.88% in 2017–2018, respectively. Table 13 compares the energy generation from traditional sources with that from renewable sources. Remarkably, the energy generation from conventional sources reached 811.143 BU and from renewable sources 9.860 BU in 2010 compared to 1.206.306 BU and 88.945 BU in 2017, respectively [ 48 ]. It is observed that the price of electricity production using renewable technologies is higher than that for conventional generation technologies, but is likely to fall with increasing experience in the techniques involved [ 49 ].

The annual growth in power generation as per the 30th of November 2018

Gross electricity generation from renewable energy—according to regions

Table 14 shows the gross electricity generation from renewable energy-region wise. It is noted that the highest renewable energy generation derives from the southern region, followed by the western part. As of November 2018, 50.33% of energy generation was obtained from the southern area and 29.37%, 18.05%, 2%, and 0.24% from Western, Northern, North-Eastern Areas, and the Island, respectively.

Gross electricity generation from renewable energy—according to states

Table 15 shows the gross electricity generation from renewable energy—region-wise. It is observed that the highest renewable energy generation was achieved from Karnataka (16.57%), Tamilnadu (15.82%), Andhra Pradesh (11.92%), and Gujarat (10.87%) as per November 2018. While adding four years from 2015–2016 to 2018–2019 Tamilnadu [ 50 ] remains in the first position followed by Karnataka, Maharashtra, Gujarat and Andhra Pradesh.

Gross electricity generation from renewable energy—according to sources

Table 16 shows the gross electricity generation from renewable energy—source-wise. It can be concluded from the table that the wind-based energy generation as per 2017–2018 is most prominent with 51.71%, followed by solar energy (25.40%), Bagasse (11.63%), small hydropower (7.55%), biomass (3.34%), and WTE (0.35%). There has been a constant increase in the generation of all renewable sources from 2014–2015 to date. Wind energy, as always, was the highest contributor to the total renewable power production. The percentage of solar energy produced in the overall renewable power production comes next to wind and is typically reduced during the monsoon months. The definite improvement in wind energy production can be associated with a “good” monsoon. Cyclonic action during these months also facilitates high-speed winds. Monsoon winds play a significant part in the uptick in wind power production, especially in the southern states of the country.

Estimation of gross electricity generation from renewable energy

Table 17 shows an estimation of gross electricity generation from renewable energy based on the 2015 report of the National Institution for Transforming India (NITI Aayog) [ 51 ]. It is predicted that the share of renewable power will be 10.2% by 2022, but renewable power technologies contributed a record of 13.4% to the cumulative power production in India as of the 31st of August 2018. The power ministry report shows that India generated 122.10 TWh and out of the total electricity produced, renewables generated 16.30 TWh as on the 31st of August 2018. According to the India Brand Equity Foundation report, it is anticipated that by the year 2040, around 49% of total electricity will be produced using renewable energy.

Current achievements in renewable energy 2017–2018

India cares for the planet and has taken a groundbreaking journey in renewable energy through the last 4 years [ 52 , 53 ]. A dedicated ministry along with financial and technical institutions have helped India in the promotion of renewable energy and diversification of its energy mix. The country is engaged in expanding the use of clean energy sources and has already undertaken several large-scale sustainable energy projects to ensure a massive growth of green energy.

1. India doubled its renewable power capacity in the last 4 years. The cumulative renewable power capacity in 2013–2014 reached 35,500 MW and rose to 70,000 MW in 2017–2018.

2. India stands in the fourth and sixth position regarding the cumulative installed capacity in the wind and solar sector, respectively. Furthermore, its cumulative installed renewable capacity stands in fifth position globally as of the 31st of December 2018.

3. As said above, the cumulative renewable energy capacity target for 2022 is given as 175 GW. For 2017–2018, the cumulative installed capacity amounted to 70 GW, the capacity under implementation is 15 GW and the tendered capacity was 25 GW. The target, the installed capacity, the capacity under implementation, and the tendered capacity are shown in Fig. 4 .

4. There is tremendous growth in solar power. The cumulative installed solar capacity increased by more than eight times in the last 4 years from 2.630 GW (2013–2014) to 22 GW (2017–2018). As of the 31st of December 2018, the installed capacity amounted to 25.2122 GW.

5. The renewable electricity generated in 2017–2018 was 101839 BUs.

6. The country published competitive bidding guidelines for the production of renewable power. It also discovered the lowest tariff and transparent bidding method and resulted in a notable decrease in per unit cost of renewable energy.

7. In 21 states, there are 41 solar parks with a cumulative capacity of more than 26,144 MW that have already been approved by the MNRE. The Kurnool solar park was set up with 1000 MW; and with 2000 MW the largest solar park of Pavagada (Karnataka) is currently under installation.

8. The target for solar power (ground mounted) for 2018–2019 is given as 10 GW, and solar power (Rooftop) as 1 GW.

9. MNRE doubled the target for solar parks (projects of 500 MW or more) from 20 to 40 GW.

10. The cumulative installed capacity of wind power increased by 1.6 times in the last 4 years. In 2013–2014, it amounted to 21 GW, from 2017 to 2018 it amounted to 34 GW, and as of 31st of December 2018, it reached 35.138 GW. This shows that achievements were completed in wind power use.

11. An offshore wind policy was announced. Thirty-four companies (most significant global and domestic wind power players) competed in the “expression of interest” (EoI) floated on the plan to set up India’s first mega offshore wind farm with a capacity of 1 GW.

12. 682 MW small hydropower projects were installed during the last 4 years along with 600 watermills (mechanical applications) and 132 projects still under development.

13. MNRE is implementing green energy corridors to expand the transmission system. 9400 km of green energy corridors are completed or under implementation. The cost spent on it was INR 10141 crore (101,410 Million INR = 1425.01 USD). Furthermore, the total capacity of 19,000 MVA substations is now planned to be complete by March 2020.

14. MNRE is setting up solar pumps (off-grid application), where 90% of pumps have been set up as of today and between 2014–2015 and 2017–2018. Solar street lights were more than doubled. Solar home lighting systems have been improved by around 1.5 times. More than 2,575,000 solar lamps have been distributed to students. The details are illustrated in Fig. 5 .

15. From 2014–2015 to 2017–2018, more than 2.5 lakh (0.25 million) biogas plants were set up for cooking in rural homes to enable families by providing them access to clean fuel.

16. New policy initiatives revised the tariff policy mandating purchase and generation obligations (RPO and RGO). Four wind and solar inter-state transmission were waived; charges were planned, the RPO trajectory for 2022 and renewable energy policy was finalized.

17. Expressions of interest (EoI) were invited for installing solar photovoltaic manufacturing capacities associated with the guaranteed off-take of 20 GW. EoI indicated 10 GW floating solar energy plants.

18. Policy for the solar-wind hybrid was announced. Tender for setting up 2 GW solar-wind hybrid systems in existing projects was invited.

19. To facilitate R&D in renewable power technology, a National lab policy on testing, standardization, and certification was announced by the MNRE.

20. The Surya Mitra program was conducted to train college graduates in the installation, commissioning, operations, and management of solar panels. The International Solar Alliance (ISA) headquarters in India (Gurgaon) will be a new commencement for solar energy improvement in India.

21. The renewable sector has become considerably more attractive for foreign and domestic investors, and the country expects to attract up to USD 80 billion in the next 4 years from 2018–2019 to 2021–2022.

22. The solar power capacity expanded by more than eight times from 2.63 GW in 2013–2014 to 22 GW in 2017–2018.

23. A bidding for 115 GW renewable energy projects up to March 2020 was announced.

24. The Bureau of Indian Standards (BIS) acting for system/components of solar PV was established.

25. To recognize and encourage innovative ideas in renewable energy sectors, the Government provides prizes and awards. Creative ideas/concepts should lead to prototype development. The Name of the award is “Abhinav Soch-Nayi Sambhawanaye,” which means Innovative ideas—New possibilities.

Renewable energy target, installed capacity, under implementation and tendered [ 52 ]

Off-grid solar applications [ 52 ]

Solar energy

Under the National Solar Mission, the MNRE has updated the objective of grid-connected solar power projects from 20 GW by the year 2021–2022 to 100 GW by the year 2021–2022. In 2008–2009, it reached just 6 MW. The “Made in India” initiative to promote domestic manufacturing supported this great height in solar installation capacity. Currently, India has the fifth highest solar installed capacity worldwide. By the 31st of December 2018, solar energy had achieved 25,212.26 MW against the target of 2022, and a further 22.8 GW of capacity has been tendered out or is under current implementation. MNRE is preparing to bid out the remaining solar energy capacity every year for the periods 2018–2019 and 2019–2020 so that bidding may contribute with 100 GW capacity additions by March 2020. In this way, 2 years for the completion of projects would remain. Tariffs will be determined through the competitive bidding process (reverse e-auction) to bring down tariffs significantly. The lowest solar tariff was identified to be INR 2.44 per kWh in July 2018. In 2010, solar tariffs amounted to INR 18 per kWh. Over 100,000 lakh (10,000 million) acres of land had been classified for several planned solar parks, out of which over 75,000 acres had been obtained. As of November 2018, 47 solar parks of a total capacity of 26,694 MW were established. The aggregate capacity of 4195 MW of solar projects has been commissioned inside various solar parks (floating solar power). Table 18 shows the capacity addition compared to the target. It indicates that capacity addition increased exponentially.

Wind energy

As of the 31st of December 2018, the total installed capacity of India amounted to 35,138.15 MW compared to a target of 60 GW by 2022. India is currently in fourth position in the world for installed capacity of wind power. Moreover, around 9.4 GW capacity has been tendered out or is under current implementation. The MNRE is preparing to bid out for A 10 GW wind energy capacity every year for 2018–2019 and 2019–2020, so that bidding will allow for 60 GW capacity additions by March 2020, giving the remaining two years for the accomplishment of the projects. The gross wind energy potential of the country now reaches 302 GW at a 100 m above-ground level. The tariff administration has been changed from feed-in-tariff (FiT) to the bidding method for capacity addition. On the 8th of December 2017, the ministry published guidelines for a tariff-based competitive bidding rule for the acquisition of energy from grid-connected wind energy projects. The developed transparent process of bidding lowered the tariff for wind power to its lowest level ever. The development of the wind industry has risen in a robust ecosystem ensuring project execution abilities and a manufacturing base. State-of-the-art technologies are now available for the production of wind turbines. All the major global players in wind power have their presence in India. More than 12 different companies manufacture more than 24 various models of wind turbines in India. India exports wind turbines and components to the USA, Europe, Australia, Brazil, and other Asian countries. Around 70–80% of the domestic production has been accomplished with strong domestic manufacturing companies. Table 19 lists the capacity addition compared to the target for the capacity addition. Furthermore, electricity generation from the wind-based capacity has improved, even though there was a slowdown of new capacity in the first half of 2018–2019 and 2017–2018.

The national energy storage mission—2018

The country is working toward a National Energy Storage Mission. A draft of the National Energy Storage Mission was proposed in February 2018 and initiated to develop a comprehensive policy and regulatory framework. During the last 4 years, projects included in R&D worth INR 115.8 million (USD 1.66 million) in the domain of energy storage have been launched, and a corpus of INR 48.2 million (USD 0.7 million) has been issued. India’s energy storage mission will provide an opportunity for globally competitive battery manufacturing. By increasing the battery manufacturing expertise and scaling up its national production capacity, the country can make a substantial economic contribution in this crucial sector. The mission aims to identify the cumulative battery requirements, total market size, imports, and domestic manufacturing. Table 20 presents the economic opportunity from battery manufacturing given by the National Institution for Transforming India, also called NITI Aayog, which provides relevant technical advice to central and state governments while designing strategic and long-term policies and programs for the Indian government.

Small hydropower—3-year action agenda—2017

Hydro projects are classified as large hydro, small hydro (2 to 25 MW), micro-hydro (up to 100 kW), and mini-hydropower (100 kW to 2 MW) projects. Whereas the estimated potential of SHP is 20 GW, the 2022 target for India in SHP is 5 GW. As of the 31st of December 2018, the country has achieved 4.5 GW and this production is constantly increasing. The objective, which was planned to be accomplished through infrastructure project grants and tariff support, was included in the NITI Aayog’s 3-year action agenda (2017–2018 to 2019–2020), which was published on the 1st of August 2017. MNRE is providing central financial assistance (CFA) to set up small/micro hydro projects both in the public and private sector. For the identification of new potential locations, surveys and comprehensive project reports are elaborated, and financial support for the renovation and modernization of old projects is provided. The Ministry has established a dedicated completely automatic supervisory control and data acquisition (SCADA)—based on a hydraulic turbine R&D laboratory at the Alternate Hydro Energy Center (AHEC) at IIT Roorkee. The establishment cost for the lab was INR 40 crore (400 million INR, 95.62 Million USD), and the laboratory will serve as a design and validation facility. It investigates hydro turbines and other hydro-mechanical devices adhering to national and international standards [ 54 , 55 ]. Table 21 shows the target and achievements from 2007–2008 to 2018–2019.

National policy regarding biofuels—2018

Modernization has generated an opportunity for a stable change in the use of bioenergy in India. MNRE amended the current policy for biomass in May 2018. The policy presents CFA for projects using biomass such as agriculture-based industrial residues, wood produced through energy plantations, bagasse, crop residues, wood waste generated from industrial operations, and weeds. Under the policy, CFA will be provided to the projects at the rate of INR 2.5 million (USD 35,477.7) per MW for bagasse cogeneration and INR 5 million (USD 70,955.5) per MW for non-bagasse cogeneration. The MNRE also announced a memorandum in November 2018 considering the continuation of the concessional customs duty certificate (CCDC) to set up projects for the production of energy using non-conventional materials such as bio-waste, agricultural, forestry, poultry litter, agro-industrial, industrial, municipal, and urban wastes. The government recently established the National policy on biofuels in August 2018. The MNRE invited an expression of interest (EOI) to estimate the potential of biomass energy and bagasse cogeneration in the country. A program to encourage the promotion of biomass-based cogeneration in sugar mills and other industries was also launched in May 2018. Table 22 shows how the biomass power target and achievements are expected to reach 10 GW of the target of 2022 before the end of 2019.

The new national biogas and organic manure program (NNBOMP)—2018

The National biogas and manure management programme (NBMMP) was launched in 2012–2013. The primary objective was to provide clean gaseous fuel for cooking, where the remaining slurry was organic bio-manure which is rich in nitrogen, phosphorus, and potassium. Further, 47.5 lakh (4.75 million) cumulative biogas plants were completed in 2014, and increased to 49.8 lakh (4.98 million). During 2017–2018, the target was to establish 1.10 lakh biogas plants (1.10 million), but resulted in 0.15 lakh (0.015 million). In this way, the cost of refilling the gas cylinders with liquefied petroleum gas (LPG) was greatly reduced. Likewise, tons of wood/trees were protected from being axed, as wood is traditionally used as a fuel in rural and semi-urban households. Biogas is a viable alternative to traditional cooking fuels. The scheme generated employment for almost 300 skilled laborers for setting up the biogas plants. By 30th of May 2018, the Ministry had issued guidelines for the implementation of the NNBOMP during the period 2017–2018 to 2019–2020 [ 56 ].

The off-grid and decentralized solar photovoltaic application program—2018

The program deals with the energy demand through the deployment of solar lanterns, solar streetlights, solar home lights, and solar pumps. The plan intended to reach 118 MWp of off-grid PV capacity by 2020. The sanctioning target proposed outlay was 50 MWp by 2017–2018 and 68 MWp by 2019–2020. The total estimated cost amounted to INR 1895 crore (18950 Million INR, 265.547 million USD), and the ministry wanted to support 637 crores (6370 million INR, 89.263 million USD) by its central finance assistance. Solar power plants with a 25 KWp size were promoted in those areas where grid power does not reach households or is not reliable. Public service institutions, schools, panchayats, hostels, as well as police stations will benefit from this scheme. Solar study lamps were also included as a component in the program. Thirty percent of financial assistance was provided to solar power plants. Every student should bear 15% of the lamp cost, and the ministry wanted to support the remaining 85%. As of October 2018, lantern and lamps of more than 40 Lakhs (4 million), home lights of 16.72 lakhs (1.672 million) number, street lights of 6.40 lakhs (0.64 million), solar pumps of 1.96 lakhs (0.196 million), and 187.99 MWp stand-alone devices had been installed [ 57 , 58 ].

Major government initiatives for renewable energy

Technological initiatives.

The Technology Development and Innovation Policy (TDIP) released on the 6th of October 2017 was endeavored to promote research, development, and demonstration (RD&D) in the renewable energy sector [ 59 ]. RD&D intended to evaluate resources, progress in technology, commercialization, and the presentation of renewable energy technologies across the country. It aimed to produce renewable power devices and systems domestically. The evaluation of standards and resources, processes, materials, components, products, services, and sub-systems was carried out through RD&D. A development of the market, efficiency improvements, cost reductions, and a promotion of commercialization (scalability and bankability) were achieved through RD&D. Likewise, the percentage of renewable energy in the total electricity mix made it self-sustainable, industrially competitive, and profitable through RD&D. RD&D also supported technology development and demonstration in wind, solar, wind-solar hybrid, biofuel, biogas, hydrogen fuel cells, and geothermal energies. RD&D supported the R&D units of educational institutions, industries, and non-government organizations (NGOs). Sharing expertise, information, as well as institutional mechanisms for collaboration was realized by use of the technology development program (TDP). The various people involved in this program were policymakers, industrial innovators, associated stakeholders and departments, researchers, and scientists. Renowned R&D centers in India are the National Institute of Solar Energy (NISE), Gurgaon, the National Institute of Bio-Energy (NIBE), Kapurthala, and the National Institute of Wind Energy (NIWE), Chennai. The TDP strategy encouraged the exploration of innovative approaches and possibilities to obtain long-term targets. Likewise, it efficiently supported the transformation of knowledge into technology through a well-established monitoring system for the development of renewable technology that meets the electricity needs of India. The research center of excellence approved the TDI projects, which were funded to strengthen R&D. Funds were provided for conducting training and workshops. The MNRE is now preparing a database of R&D accomplishments in the renewable energy sector.

The Impacting Research Innovation and Technology (IMPRINT) program seeks to develop engineering and technology (prototype/process development) on a national scale. IMPRINT is steered by the Indian Institute of Technologies (IITs) and Indian Institute of science (IISCs). The expansion covers all areas of engineering and technology including renewable technology. The ministry of human resource development (MHRD) finances up to 50% of the total cost of the project. The remaining costs of the project are financed by the ministry (MNRE) via the RD&D program for renewable projects. Currently (2018–2019), five projects are under implementation in the area of solar thermal systems, storage for SPV, biofuel, and hydrogen and fuel cells which are funded by the MNRE (36.9 million INR, 0.518426 Million USD) and IMPRINT. Development of domestic technology and quality control are promoted through lab policies that were published on the 7th of December 2017. Lab policies were implemented to test, standardize, and certify renewable energy products and projects. They supported the improvement of the reliability and quality of the projects. Furthermore, Indian test labs are strengthened in line with international standards and practices through well-established lab policies. From 2015, the MNRE has provided “The New and Renewable Energy Young Scientist’s Award” to researchers/scientists who demonstrate exceptional accomplishments in renewable R&D.

Financial initiatives

One hundred percent financial assistance is granted by the MNRE to the government and NGOs and 50% financial support to the industry. The policy framework was developed to guide the identification of the project, the formulation, monitoring appraisal, approval, and financing. Between 2012 and 2017, a 4467.8 million INR, 62.52 Million USD) support was granted by the MNRE. The MNRE wanted to double the budget for technology development efforts in renewable energy for the current three-year plan period. Table 23 shows that the government is spending more and more for the development of the renewable energy sector. Financial support was provided to R&D projects. Exceptional consideration was given to projects that worked under extreme and hazardous conditions. Furthermore, financial support was applied to organizing awareness programs, demonstrations, training, workshops, surveys, assessment studies, etc. Innovative approaches will be rewarded with cash prizes. The winners will be presented with a support mechanism for transforming their ideas and prototypes into marketable commodities such as start-ups for entrepreneur development. Innovative projects will be financed via start-up support mechanisms, which will include an investment contract with investors. The MNRE provides funds to proposals for investigating policies and performance analyses related to renewable energy.

Technology validation and demonstration projects and other innovative projects with regard to renewables received a financial assistance of 50% of the project cost. The CFA applied to partnerships with industry and private institutions including engineering colleges. Private academic institutions, accredited by a government accreditation body, were also eligible to receive a 50% support. The concerned industries and institutions should meet the remaining 50% expenditure. The MNRE allocated an INR 3762.50 crore (INR 37625 million, 528.634 million USD) for the grid interactive renewable sources and an INR 1036.50 crore (INR 10365 million, 145.629 million USD) for off-grid/distributed and decentralized renewable power for the year 2018–2019 [ 60 ]. The MNRE asked the Reserve Bank of India (RBI), attempting to build renewable power projects under “priority sector lending” (priority lending should be done for renewable energy projects and without any limit) and to eliminate the obstacles in the financing of renewable energy projects. In July 2018, the Ministry of Finance announced that it would impose a 25% safeguard duty on solar panels and modules imported from China and Malaysia for 1 year. The quantum of tax might be reduced to 20% for the next 6 months, and 15% for the following 6 months.

Policy and regulatory framework initiatives

The regulatory interventions for the development of renewable energy sources are (a) tariff determination, (b) defining RPO, (c) promoting grid connectivity, and (d) promoting the expansion of the market.

Tariff policy amendments—2018

On the 30th of May 2018, the MoP released draft amendments to the tariff policy. The objective of these policies was to promote electricity generation from renewables. MoP in consultation with MNRE announced the long-term trajectory for RPO, which is represented in Table 24 . The State Electricity Regulatory Commission (SERC) achieved a favorable and neutral/off-putting effect in the growth of the renewable power sector through their RPO regulations in consultation with the MNRE. On the 25th of May 2018, the MNRE created an RPO compliance cell to reach India’s solar and wind power goals. Due to the absence of implementation of RPO regulations, several states in India did not meet their specified RPO objectives. The cell will operate along with the Central Electricity Regulatory Commission (CERC) and SERCs to obtain monthly statements on RPO compliance. It will also take up non-compliance associated concerns with the relevant officials.

Repowering policy—2016

On the 09th of August 2016, India announced a “repowering policy” for wind energy projects. An about 27 GW turnaround was possible according to the policy. This policy supports the replacing of aging wind turbines with more modern and powerful units (fewer, larger, taller) to raise the level of electricity generation. This policy seeks to create a simplified framework and to promote an optimized use of wind power resources. It is mandatory because the up to the year 2000 installed wind turbines were below 500 kW in sites where high wind potential might be achieved. It will be possible to obtain 3000 MW from the same location once replacements are in place. The policy was initially applied for the one MW installed capacity of wind turbines, and the MNRE will extend the repowering policy to other projects in the future based on experience. Repowering projects were implemented by the respective state nodal agencies/organizations that were involved in wind energy promotion in their states. The policy provided an exception from the Power Purchase Agreement (PPA) for wind farms/turbines undergoing repowering because they could not fulfill the requirements according to the PPA during repowering. The repowering projects may avail accelerated depreciation (AD) benefit or generation-based incentive (GBI) due to the conditions appropriate to new wind energy projects [ 61 ].

The wind-solar hybrid policy—2018

On the 14th of May 2018, the MNRE announced a national wind-solar hybrid policy. This policy supported new projects (large grid-connected wind-solar photovoltaic hybrid systems) and the hybridization of the already available projects. These projects tried to achieve an optimal and efficient use of transmission infrastructure and land. Better grid stability was achieved and the variability in renewable power generation was reduced. The best part of the policy intervention was that which supported the hybridization of existing plants. The tariff-based transparent bidding process was included in the policy. Regulatory authorities should formulate the necessary standards and regulations for hybrid systems. The policy also highlighted a battery storage in hybrid projects for output optimization and variability reduction [ 62 ].

The national offshore wind energy policy—2015

The National Offshore Wind Policy was released in October 2015. On the 19th of June 2018, the MNRE announced a medium-term target of 5 GW by 2022 and a long-term target of 30 GW by 2030. The MNRE called expressions of Interest (EoI) for the first 1 GW of offshore wind (the last date was 08.06.2018). The EoI site is located in Pipavav port at the Gulf of Khambhat at a distance of 23 km facilitating offshore wind (FOWIND) where the consortium deployed light detection and ranging (LiDAR) in November 2017). Pipavav port is situated off the coast of Gujarat. The MNRE had planned to install more such equipment in the states of Tamil Nadu and Gujarat. On the 14 th of December 2018, the MNRE, through the National Institute of Wind Energy (NIWE), called tender for offshore environmental impact assessment studies at intended LIDAR points at the Gulf of Mannar, off the coast of Tamil Nadu for offshore wind measurement. The timeline for initiatives was to firstly add 500 MW by 2022, 2 to 2.5 GW by 2027, and eventually reaching 5 GW between 2028 and 2032. Even though the installation of large wind power turbines in open seas is a challenging task, the government has endeavored to promote this offshore sector. Offshore wind energy would add its contribution to the already existing renewable energy mix for India [ 63 ] .

The feed-in tariff policy—2018

On the 28th of January 2016, the revised tariff policy was notified following the Electricity Act. On the 30th May 2018, the amendment in tariff policy was released. The intentions of this tariff policy are (a) an inexpensive and competitive electricity rate for the consumers; (b) to attract investment and financial viability; (c) to ensure that the perceptions of regulatory risks decrease through predictability, consistency, and transparency of policy measures; (d) development in quality of supply, increased operational efficiency, and improved competition; (e) increase the production of electricity from wind, solar, biomass, and small hydro; (f) peaking reserves that are acceptable in quantity or consistently good in quality or performance of grid operation where variable renewable energy source integration is provided through the promotion of hydroelectric power generation, including pumped storage projects (PSP); (g) to achieve better consumer services through efficient and reliable electricity infrastructure; (h) to supply sufficient and uninterrupted electricity to every level of consumers; and (i) to create adequate capacity, reserves in the production, transmission, and distribution that is sufficient for the reliability of supply of power to customers [ 64 ].

Training and educational initiatives

The MHRD has developed strong renewable energy education and training systems. The National Council for Vocational Training (NCVT) develops course modules, and a Modular Employable Skilling program (MES) in its regular 2-year syllabus to include SPV lighting systems, solar thermal systems, SHP, and provides the certificate for seven trades after the completion of a 2-year course. The seven trades are plumber, fitter, carpenter, welder, machinist, and electrician. The Ministry of Skill Development and Entrepreneurship (MSDE) worked out a national skill development policy in 2015. They provide regular training programs to create various job roles in renewable energy along with the MNRE support through a skill council for green jobs (SCGJ), the National Occupational Standards (NOS), and the Qualification Pack (QP). The SCGJ is promoted by the Confederation of Indian Industry (CII) and the MNRE. The industry partner for the SCGJ is ReNew Power [ 65 , 66 ].

The global status of India in renewable energy

Table 25 shows the RECAI (Renewable Energy Country Attractiveness Index) report of 40 countries. This report is based on the attractiveness of renewable energy investment and deployment opportunities. RECAI is based on macro vitals such as economic stability, investment climate, energy imperatives such as security and supply, clean energy gap, and affordability. It also includes policy enablement such as political stability and support for renewables. Its emphasis lies on project delivery parameters such as energy market access, infrastructure, and distributed generation, finance, cost and availability, and transaction liquidity. Technology potentials such as natural resources, power take-off attractiveness, potential support, technology maturity, and forecast growth are taken into consideration for ranking. India has moved to the fourth position of the RECAI-2018. Indian solar installations (new large-scale and rooftop solar capacities) in the calendar year 2017 increased exponentially with the addition of 9629 MW, whereas in 2016 it was 4313 MW. The warning of solar import tariffs and conflicts between developers and distribution firms are growing investor concerns [ 67 ]. Figure 6 shows the details of the installed capacity of global renewable energy in 2016 and 2017. Globally, 2017 GW renewable energy was installed in 2016, and in 2017, it increased to 2195 GW. Table 26 shows the total capacity addition of top countries until 2017. The country ranked fifth in renewable power capacity (including hydro energy), renewable power capacity (not including hydro energy) in fourth position, concentrating solar thermal power (CSP) and wind power were also in fourth position [ 68 ].

Globally installed capacity of renewable energy in 2017—Global 2018 status report with regard to renewables [ 68 ]

The investment opportunities in renewable energy in India

The investments into renewable energy in India increased by 22% in the first half of 2018 compared to 2017, while the investments in China dropped by 15% during the same period, according to a statement by the Bloomberg New Energy Finance (BNEF), which is shown in Table 27 [ 69 , 70 ]. At this rate, India is expected to overtake China and become the most significant growth market for renewable energy by the end of 2020. The country is eyeing pole position for transformation in renewable energy by reaching 175 GW by 2020. To achieve this target, it is quickly ramping up investments in this sector. The country added more renewable capacity than conventional capacity in 2018 when compared to 2017. India hosted the ISA first official summit on the 11.03.2018 for 121 countries. This will provide a standard platform to work toward the ambitious targets for renewable energy. The summit will emphasize India’s dedication to meet global engagements in a time-bound method. The country is also constructing many sizeable solar power parks comparable to, but larger than, those in China. Half of the earth’s ten biggest solar parks under development are in India.

In 2014, the world largest solar park was the Topaz solar farm in California with a 550 MW facility. In 2015, another operator in California, Solar Star, edged its capacity up to 579 MW. By 2016, India’s Kamuthi Solar Power Project in Tamil Nadu was on top with 648 MW of capacity (set up by the Adani Green Energy, part of the Adani Group, in Tamil Nadu). As of February 2017, the Longyangxia Dam Solar Park in China was the new leader, with 850 MW of capacity [ 71 ]. Currently, there are 600 MW operating units and 1400 MW units under construction. The Shakti Sthala solar park was inaugurated on 01.03.2018 in Pavagada (Karnataka, India) which is expected to become the globe’s most significant solar park when it accomplishes its full potential of 2 GW. Another large solar park with 1.5 GW is scheduled to be built in the Kadappa region [ 72 ]. The progress in solar power is remarkable and demonstrates real clean energy development on the ground.

The Kurnool ultra-mega solar park generated 800 million units (MU) of energy in October 2018 and saved over 700,000 tons of CO 2 . Rainwater was harvested using a reservoir that helps in cleaning solar panels and supplying water. The country is making remarkable progress in solar energy. The Kamuthi solar farm is cleaned each day by a robotic system. As the Indian economy expands, electricity consumption is forecasted to reach 15,280 TWh in 2040. With the government’s intent, green energy objectives, i.e., the renewable sector, grow considerably in an attractive manner with both foreign and domestic investors. It is anticipated to attract investments of up to USD 80 billion in the subsequent 4 years. The government of India has raised its 175 GW target to 225 GW of renewable energy capacity by 2022. The competitive benefit is that the country has sun exposure possible throughout the year and has an enormous hydropower potential. India was also listed fourth in the EY renewable energy country attractive index 2018. Sixty solar cities will be built in India as a section of MNRE’s “Solar cities” program.

In a regular auction, reduction in tariffs cost of the projects are the competitive benefits in the country. India accounts for about 4% of the total global electricity generation capacity and has the fourth highest installed capacity of wind energy and the third highest installed capacity of CSP. The solar installation in India erected during 2015–2016, 2016–2017, 2017–2018, and 2018–2019 was 3.01 GW, 5.52 GW, 9.36 GW, and 6.53 GW, respectively. The country aims to add 8.5 GW during 2019–2020. Due to its advantageous location in the solar belt (400 South to 400 North), the country is one of the largest beneficiaries of solar energy with relatively ample availability. An increase in the installed capacity of solar power is anticipated to exceed the installed capacity of wind energy, approaching 100 GW by 2022 from its current levels of 25.21226 GW as of December 2018. Fast falling prices have made Solar PV the biggest market for new investments. Under the Union Budget 2018–2019, a zero import tax on parts used in manufacturing solar panels was launched to provide an advantage to domestic solar panel companies [ 73 ].

Foreign direct investment (FDI) inflows in the renewable energy sector of India between April 2000 and June 2018 amounted to USD 6.84 billion according to the report of the department of industrial policy and promotion (DIPP). The DIPP was renamed (gazette notification 27.01.2019) the Department for the Promotion of Industry and Internal Trade (DPIIT). It is responsible for the development of domestic trade, retail trade, trader’s welfare including their employees as well as concerns associated with activities in facilitating and supporting business and startups. Since 2014, more than 42 billion USD have been invested in India’s renewable power sector. India reached US$ 7.4 billion in investments in the first half of 2018. Between April 2015 and June 2018, the country received USD 3.2 billion FDI in the renewable sector. The year-wise inflows expanded from USD 776 million in 2015–2016 to USD 783 million in 2016–2017 and USD 1204 million in 2017–2018. Between January to March of 2018, the INR 452 crore (4520 Million INR, 63.3389 million USD) of the FDI had already come in. The country is contributing with financial and promotional incentives that include a capital subsidy, accelerated depreciation (AD), waiver of inter-state transmission charges and losses, viability gap funding (VGF), and FDI up to 100% under the automated track.

The DIPP/DPIIT compiles and manages the data of the FDI equity inflow received in India [ 74 ]. The FDI equity inflow between April 2015 and June 2018 in the renewable sector is illustrated in Fig. 7 . It shows that the 2018–2019 3 months’ FDI equity inflow is half of that of the entire one of 2017–2018. It is evident from the figure that India has well-established FDI equity inflows. The significant FDI investments in the renewable energy sectors are shown in Table 28 . The collaboration between the Asian development bank and Renew Power Ventures private limited with 44.69 million USD ranked first followed by AIRRO Singapore with Diligent power with FDI equity inflow of 44.69 USD million.

The FDI equity inflow received between April 2015 and June 2018 in the renewable energy sector [ 73 ]

Strategies to promote investments

Strategies to promote investments (including FDI) by investors in the renewable sector:

Decrease constraints on FDI; provide open, transparent, and dependable conditions for foreign and domestic firms; and include ease of doing business, access to imports, comparatively flexible labor markets, and safeguard of intellectual property rights.

Establish an investment promotion agency (IPA) that targets suitable foreign investors and connects them as a catalyst with the domestic economy. Assist the IPA to present top-notch infrastructure and immediate access to skilled workers, technicians, engineers, and managers that might be needed to attract such investors. Furthermore, it should involve an after-investment care, recognizing the demonstration effects from satisfied investors, the potential for reinvestments, and the potential for cluster-development due to follow-up investments.

It is essential to consider the targeted sector (wind, solar, SPH or biomass, respectively) for which investments are required.

Establish the infrastructure needed for a quality investor, including adequate close-by transport facilities (airport, ports), a sufficient and steady supply of energy, a provision of a sufficiently skilled workforce, the facilities for the vocational training of specialized operators, ideally designed in collaboration with the investor.

Policy and other support mechanisms such as Power Purchase Agreements (PPA) play an influential role in underpinning returns and restricting uncertainties for project developers, indirectly supporting the availability of investment. Investors in renewable energy projects have historically relied on government policies to give them confidence about the costs necessary for electricity produced—and therefore for project revenues. Reassurance of future power costs for project developers is secured by signing a PPA with either a utility or an essential corporate buyer of electricity.

FiT have been the most conventional approach around the globe over the last decade to stimulate investments in renewable power projects. Set by the government concerned, they lay down an electricity tariff that developers of qualifying new projects might anticipate to receive for the resulting electricity over a long interval (15–20 years). These present investors in the tax equity of renewable power projects with a credit that they can manage to offset the tax burden outside in their businesses.

Table 29 presents the 2018 renewable energy investment report, source-wise, by the significant players in renewables according to the report of the Bloomberg New Energy Finance Report 2018. As per this report, global investment in renewable energy was USD of 279.8 billion in 2017. The top ten in the total global investments are China (126.1 $BN), the USA (40.5 $BN), Japan (13.4 $BN), India (10.9 $BN), Germany (10.4 $BN), Australia (8.5 $BN), UK (7.6 $BN), Brazil (6.0 $BN), Mexico (6.0 $BN), and Sweden (3.7 $BN) [ 75 ]. This achievement was possible since those countries have well-established strategies for promoting investments [ 76 , 77 ].

The appropriate objectives for renewable power expansion and investments are closely related to the Nationally Determined Contributions (NDCs) objectives, the implementation of the NDC, on the road to achieving Paris promises, policy competence, policy reliability, market absorption capacity, and nationwide investment circumstances that are the real purposes for renewable power expansion, which is a significant factor for the investment strategies, as is shown in Table 30 .

The demand for investments for building a Paris-compatible and climate-resilient energy support remains high, particularly in emerging nations. Future investments in energy grids and energy flexibility are of particular significance. The strategies and the comparison chart between China, India, and the USA are presented in Table 31 .

Table 32 shows France in the first place due to overall favorable conditions for renewables, heading the G20 in investment attractiveness of renewables. Germany drops back one spot due to a decline in the quality of the global policy environment for renewables and some insufficiencies in the policy design, as does the UK. Overall, with four European countries on top of the list, Europe, however, directs the way in providing attractive conditions for investing in renewables. Despite high scores for various nations, no single government is yet close to growing a role model. All countries still have significant room for increasing investment demands to deploy renewables at the scale required to reach the Paris objectives. The table shown is based on the Paris compatible long-term vision, the policy environment for renewable energy, the conditions for system integration, the market absorption capacity, and general investment conditions. India moved from the 11th position to the 9th position in overall investments between 2017 and 2018.

A Paris compatible long-term vision includes a de-carbonization plan for the power system, the renewable power ambition, the coal and oil decrease, and the reliability of renewables policies. Direct support policies include medium-term certainty of policy signals, streamlined administrative procedures, ensuring project realization, facilitating the use of produced electricity. Conditions for system integration include system integration-grid codes, system integration-storage promotion, and demand-side management policies. A market absorption capacity includes a prior experience with renewable technologies, a current activity with renewable installations, and a presence of major renewable energy companies. General investment conditions include non-financial determinants, depth of the financial sector as well, as an inflation forecast.

Employment opportunities for citizens in renewable energy in India

Global employment scenario.

According to the 2018 Annual review of the IRENA [ 78 ], global renewable energy employment touched 10.3 million jobs in 2017, an improvement of 5.3% compared with the quantity published in 2016. Many socio-economic advantages derive from renewable power, but employment continues to be exceptionally centralized in a handful of countries, with China, Brazil, the USA, India, Germany, and Japan in the lead. In solar PV employment (3.4 million jobs), China is the leader (65% of PV Jobs) which is followed by Japan, USA, India, Bangladesh, Malaysia, Germany, Philippines, and Turkey. In biofuels employment (1.9 million jobs), Brazil is the leader (41% of PV Jobs) followed by the USA, Colombia, Indonesia, Thailand, Malaysia, China, and India. In wind employment (1.1 million jobs), China is the leader (44% of PV Jobs) followed by Germany, USA, India, UK, Brazil, Denmark, Netherlands, France, and Spain.

Table 33 shows global renewable energy employment in the corresponding technology branches. As in past years, China maintained the most notable number of people employed (3880 million jobs) estimating for 43% of the globe’s total which is shown in Fig. 8 . In India, new solar installations touched a record of 9.6 GW in 2017, efficiently increasing the total installed capacity. The employment in solar PV improved by 36% and reached 164,400 jobs, of which 92,400 represented on-grid use. IRENA determines that the building and installation covered 46% of these jobs, with operations and maintenance (O&M) representing 35% and 19%, individually. India does not produce solar PV because it could be imported from China, which is inexpensive. The market share of domestic companies (Indian supplier to renewable projects) declined from 13% in 2014–2015 to 7% in 2017–2018. If India starts the manufacturing base, more citizens will get jobs in the manufacturing field. India had the world’s fifth most significant additions of 4.1 GW to wind capacity in 2017 and the fourth largest cumulative capacity in 2018. IRENA predicts that jobs in the wind sector stood at 60,500.

Renewable energy employment in selected countries [ 79 ]

The jobs in renewables are categorized into technological development, installation/de-installation, operation, and maintenance. Tables 34 , 35 , 36 , and 37 show the wind industry, solar energy, biomass, and small hydro-related jobs in project development, component manufacturing, construction, operations, and education, training, and research. As technology quickly evolves, workers in all areas need to update their skills through continuing training/education or job training, and in several cases could benefit from professional certification. The advantages of moving to renewable energy are evident, and for this reason, the governments are responding positively toward the transformation to clean energy. Renewable energy can be described as the country’s next employment boom. Renewable energy job opportunities can transform rural economy [ 79 , 80 ]. The renewable energy sector might help to reduce poverty by creating better employment. For example, wind power is looking for specialists in manufacturing, project development, and construction and turbine installation as well as financial services, transportation and logistics, and maintenance and operations.

The government is building more renewable energy power plants that will require a workforce. The increasing investments in the renewable energy sector have the potential to provide more jobs than any other fossil fuel industry. Local businesses and renewable sectors will benefit from this change, as income will increase significantly. Many jobs in this sector will contribute to fixed salaries, healthcare benefits, and skill-building opportunities for unskilled and semi-skilled workers. A range of skilled and unskilled jobs are included in all renewable energy technologies, even though most of the positions in the renewable energy industry demand a skilled workforce. The renewable sector employs semi-skilled and unskilled labor in the construction, operations, and maintenance after proper training. Unskilled labor is employed as truck drivers, guards, cleaning, and maintenance. Semi-skilled labor is used to take regular readings from displays. A lack of consistent data on the potential employment impact of renewables expansion makes it particularly hard to assess the quantity of skilled, semi-skilled, and unskilled personnel that might be needed.

Key findings in renewable energy employment

The findings comprise (a) that the majority of employment in the renewable sector is contract based, and that employees do not benefit from permanent jobs or security. (b) Continuous work in the industry has the potential to decrease poverty. (c) Most poor citizens encounter obstacles to entry-level training and the employment market due to lack of awareness about the jobs and the requirements. (d) Few renewable programs incorporate developing ownership opportunities for the citizens and the incorporation of women in the sector. (e) The inadequacy of data makes it challenging to build relationships between employment in renewable energy and poverty mitigation.

Recommendations for renewable energy employment

When building the capacity, focus on poor people and individuals to empower them with training in operation and maintenance.

Develop and offer training programs for citizens with minimal education and training, who do not fit current programs, which restrict them from working in renewable areas.

Include women in the renewable workforce by providing localized training.

Establish connections between training institutes and renewable power companies to guarantee that (a) trained workers are placed in appropriate positions during and after the completion of the training program and (b) training programs match the requirements of the renewable sector.

Poverty impact assessments might be embedded in program design to know how programs motivate poverty reduction, whether and how they influence the community.

Allow people to have a sense of ownership in renewable projects because this could contribute to the growth of the sector.

The details of the job being offered (part time, full time, contract-based), the levels of required skills for the job (skilled, semi-skilled and unskilled), the socio-economic status of the employee data need to be collected for further analysis.

Conduct investigations, assisted by field surveys, to learn about the influence of renewable energy jobs on poverty mitigation and differences in the standard of living.

Challenges faced by renewable energy in India

The MNRE has been taking dedicated measures for improving the renewable sector, and its efforts have been satisfactory in recognizing various obstacles.

Policy and regulatory obstacles

A comprehensive policy statement (regulatory framework) is not available in the renewable sector. When there is a requirement to promote the growth of particular renewable energy technologies, policies might be declared that do not match with the plans for the development of renewable energy.

The regulatory framework and procedures are different for every state because they define the respective RPOs (Renewable Purchase Obligations) and this creates a higher risk of investments in this sector. Additionally, the policies are applicable for just 5 years, and the generated risk for investments in this sector is apparent. The biomass sector does not have an established framework.

Incentive accelerated depreciation (AD) is provided to wind developers and is evident in developing India’s wind-producing capacity. Wind projects installed more than 10 years ago show that they are not optimally maintained. Many owners of the asset have built with little motivation for tax benefits only. The policy framework does not require the maintenance of the wind projects after the tax advantages have been claimed. There is no control over the equipment suppliers because they undertake all wind power plant development activities such as commissioning, operation, and maintenance. Suppliers make the buyers pay a premium and increase the equipment cost, which brings burden to the buyer.

Furthermore, ready-made projects are sold to buyers. The buyers are susceptible to this trap to save income tax. Foreign investors hesitate to invest because they are exempted from the income tax.

Every state has different regulatory policy and framework definitions of an RPO. The RPO percentage specified in the regulatory framework for various renewable sources is not precise.

RPO allows the SERCs and certain private firms to procure only a part of their power demands from renewable sources.

RPO is not imposed on open access (OA) and captive consumers in all states except three.

RPO targets and obligations are not clear, and the RPO compliance cell has just started on 22.05.2018 to collect the monthly reports on compliance and deal with non-compliance issues with appropriate authorities.

Penalty mechanisms are not specified and only two states in India (Maharashtra and Rajasthan) have some form of penalty mechanisms.

The parameter to determine the tariff is not transparent in the regulatory framework and many SRECs have established a tariff for limited periods. The FiT is valid for only 5 years, and this affects the bankability of the project.

Many SERCs have not decided on adopting the CERC tariff that is mentioned in CERCs regulations that deal with terms and conditions for tariff determinations. The SERCs have considered the plant load factor (PLF) because it varies across regions and locations as well as particular technology. The current framework does not fit to these issues.

Third party sale (TPS) is not allowed because renewable generators are not allowed to sell power to commercial consumers. They have to sell only to industrial consumers. The industrial consumers have a low tariff and commercial consumers have a high tariff, and SRCS do not allow OA. This stops the profit for the developers and investors.

Institutional obstacles

Institutes, agencies stakeholders who work under the conditions of the MNRE show poor inter-institutional coordination. The progress in renewable energy development is limited by this lack of cooperation, coordination, and delays. The delay in implementing policies due to poor coordination, decrease the interest of investors to invest in this sector.

The single window project approval and clearance system is not very useful and not stable because it delays the receiving of clearances for the projects ends in the levy of a penalty on the project developer.

Pre-feasibility reports prepared by concerned states have some deficiency, and this may affect the small developers, i.e., the local developers, who are willing to execute renewable projects.

The workforce in institutes, agencies, and ministries is not sufficient in numbers.

Proper or well-established research centers are not available for the development of renewable infrastructure.

Customer care centers to guide developers regarding renewable projects are not available.

Standards and quality control orders have been issued recently in 2018 and 2019 only, and there are insufficient institutions and laboratories to give standards/certification and validate the quality and suitability of using renewable technology.

Financial and fiscal obstacles

There are a few budgetary constraints such as fund allocation, and budgets that are not released on time to fulfill the requirement of developing the renewable sector.

The initial unit capital costs of renewable projects are very high compared to fossil fuels, and this leads to financing challenges and initial burden.

There are uncertainties related to the assessment of resources, lack of technology awareness, and high-risk perceptions which lead to financial barriers for the developers.

The subsidies and incentives are not transparent, and the ministry might reconsider subsidies for renewable energy because there was a sharp fall in tariffs in 2018.

Power purchase agreements (PPA) signed between the power purchaser and power generators on pre-determined fixed tariffs are higher than the current bids (Economic survey 2017–2018 and union budget on the 01.02.2019). For example, solar power tariff dropped to 2.44 INR (0. 04 USD) per unit in May 2017, wind power INR 3.46 per unit in February 2017, and 2.64 INR per unit in October 2017.

Investors feel that there is a risk in the renewable sector as this sector has lower gross returns even though these returns are relatively high within the market standards.

There are not many developers who are interested in renewable projects. While newly established developers (small and local developers) do not have much of an institutional track record or financial input, which are needed to develop the project (high capital cost). Even moneylenders consider it risky and are not ready to provide funding. Moneylenders look exclusively for contractors who have much experience in construction, well-established suppliers with proven equipment and operators who have more experience.

If the performance of renewable projects, which show low-performance, faces financial obstacles, they risks the lack of funding of renewable projects.

Financial institutions such as government banks or private banks do not have much understanding or expertise in renewable energy projects, and this imposes financial barriers to the projects.

Delay in payment by the SERCs to the developers imposes debt burden on the small and local developers because moneylenders always work with credit enhancement mechanisms or guarantee bonds signed between moneylenders and the developers.

Market obstacles

Subsidies are adequately provided to conventional fossil fuels, sending the wrong impression that power from conventional fuels is of a higher priority than that from renewables (unfair structure of subsidies)

There are four renewable markets in India, the government market (providing budgetary support to projects and purchase the output of the project), the government-driven market (provide budgetary support or fiscal incentives to promote renewable energy), the loan market (taking loan to finance renewable based applications), and the cash market (buying renewable-based applications to meet personal energy needs by individuals). There is an inadequacy in promoting the loan market and cash market in India.

The biomass market is facing a demand-supply gap which results in a continuous and dramatic increase in biomass prices because the biomass supply is unreliable (and, as there is no organized market for fuel), and the price fluctuations are very high. The type of biomass is not the same in all the states of India, and therefore demand and price elasticity is high for biomass.

Renewable power was calculated based on cost-plus methods (adding direct material cost, direct labor cost, and product overhead cost). This does not include environmental cost and shields the ecological benefits of clean and green energy.

There is an inadequate evacuation infrastructure and insufficient integration of the grid, which affects the renewable projects. SERCs are not able to use all generated power to meet the needs because of the non-availability of a proper evacuation infrastructure. This has an impact on the project, and the SERCs are forced to buy expensive power from neighbor states to fulfill needs.

Extending transmission lines is not possible/not economical for small size projects, and the seasonality of generation from such projects affect the market.

There are few limitations in overall transmission plans, distribution CapEx plans, and distribution licenses for renewable power. Power evacuation infrastructure for renewable energy is not included in the plans.

Even though there is an increase in capacity for the commercially deployed renewable energy technology, there is no decline in capital cost. This cost of power also remains high. The capital cost quoted by the developers and providers of equipment is too high due to exports of machinery, inadequate built up capacity, and cartelization of equipment suppliers (suppliers join together to control prices and limit competition).

There is no adequate supply of land, for wind, solar, and solar thermal power plants, which lead to poor capacity addition in many states.

Technological obstacles

Every installation of a renewable project contributes to complex risk challenges from environmental uncertainties, natural disasters, planning, equipment failure, and profit loss.

MNRE issued the standardization of renewable energy projects policy on the 11th of December 2017 (testing, standardization, and certification). They are still at an elementary level as compared to international practices. Quality assurance processes are still under starting conditions. Each success in renewable energy is based on concrete action plans for standards, testing and certification of performance.

The quality and reliability of manufactured components, imported equipment, and subsystems is essential, and hence quality infrastructure should be established. There is no clear document related to testing laboratories, referral institutes, review mechanism, inspection, and monitoring.

There are not many R&D centers for renewables. Methods to reduce the subsidies and invest in R&D lagging; manufacturing facilities are just replicating the already available technologies. The country is dependent on international suppliers for equipment and technology. Spare parts are not manufactured locally and hence they are scarce.

Awareness, education, and training obstacles

There is an unavailability of appropriately skilled human resources in the renewable energy sector. Furthermore, it faces an acute workforce shortage.

After installation of renewable project/applications by the suppliers, there is no proper follow-up or assistance for the workers in the project to perform maintenance. Likewise, there are not enough trained and skilled persons for demonstrating, training, operation, and maintenance of the plant.

There is inadequate knowledge in renewables, and no awareness programs are available to the general public. The lack of awareness about the technologies is a significant obstacle in acquiring vast land for constructing the renewable plant. Moreover, people using agriculture lands are not prepared to give their land to construct power plants because most Indians cultivate plants.

The renewable sector depends on the climate, and this varying climate also imposes less popularity of renewables among the people.

The per capita income is low, and the people consider that the cost of renewables might be high and they might not be able to use renewables.

The storage system increases the cost of renewables, and people believe it too costly and are not ready to use them.

The environmental benefits of renewable technologies are not clearly understood by the people and negative perceptions are making renewable technologies less prevalent among them.

Environmental obstacles

A single wind turbine does not occupy much space, but many turbines are placed five to ten rotor diameters from each other, and this occupies more area, which include roads and transmission lines.

In the field of offshore wind, the turbines and blades are bigger than onshore wind turbines, and they require a substantial amount of space. Offshore installations affect ocean activities (fishing, sand extraction, gravel extraction, oil extraction, gas extraction, aquaculture, and navigation). Furthermore, they affect fish and other marine wildlife.

Wind turbines influence wildlife (birds and bats) because of the collisions with them and due to air pressure changes caused by wind turbines and habitat disruption. Making wind turbines motionless during times of low wind can protect birds and bats but is not practiced.

Sound (aerodynamic, mechanical) and visual impacts are associated with wind turbines. There is poor practice by the wind turbine developers regarding public concerns. Furthermore, there are imperfections in surfaces and sound—absorbent material which decrease the noise from turbines. The shadow flicker effect is not taken as severe environmental impact by the developers.

Sometimes wind turbine material production, transportation of materials, on-site construction, assembling, operation, maintenance, dismantlement, and decommissioning may be associated with global warming, and there is a lag in this consideration.

Large utility-scale solar plants require vast lands that increase the risk of land degradation and loss of habitat.

The PV cell manufacturing process includes hazardous chemicals such as 1-1-1 Trichloroethene, HCL, H 2 SO 4 , N 2 , NF, and acetone. Workers face risks resulting from inhaling silicon dust. The manufacturing wastes are not disposed of properly. Proper precautions during usage of thin-film PV cells, which contain cadmium—telluride, gallium arsenide, and copper-indium-gallium-diselenide are missing. These materials create severe public health threats and environmental threats.

Hydroelectric power turbine blades kill aquatic ecosystems (fish and other organisms). Moreover, algae and other aquatic weeds are not controlled through manual harvesting or by introducing fish that can eat these plants.

Discussion and recommendations based on the research

Policy and regulation advancements.

The MNRE should provide a comprehensive action plan or policy for the promotion of the renewable sector in its regulatory framework for renewables energy. The action plan can be prepared in consultation with SERCs of the country within a fixed timeframe and execution of the policy/action plan.

The central and state government should include a “Must run status” in their policy and follow it strictly to make use of renewable power.

A national merit order list for renewable electricity generation will reduce power cost for the consumers. Such a merit order list will help in ranking sources of renewable energy in an ascending order of price and will provide power at a lower cost to each distribution company (DISCOM). The MNRE should include that principle in its framework and ensure that SERCs includes it in their regulatory framework as well.

SERCs might be allowed to remove policies and regulatory uncertainty surrounding renewable energy. SERCs might be allowed to identify the thrust areas of their renewable energy development.

There should be strong initiatives from municipality (local level) approvals for renewable energy-based projects.

Higher market penetration is conceivable only if their suitable codes and standards are adopted and implemented. MNRE should guide minimum performance standards, which incorporate reliability, durability, and performance.

A well-established renewable energy certificates (REC) policy might contribute to an efficient funding mechanism for renewable energy projects. It is necessary for the government to look at developing the REC ecosystem.

The regulatory administration around the RPO needs to be upgraded with a more efficient “carrot and stick” mechanism for obligated entities. A regulatory mechanism that both remunerations compliance and penalizes for non-compliance may likely produce better results.

RECs in India should only be traded on exchange. Over-the-counter (OTC) or off-exchange trading will potentially allow greater participation in the market. A REC forward curve will provide further price determination to the market participants.

The policymakers should look at developing and building the REC market.

Most states have defined RPO targets. Still, due to the absence of implemented RPO regulations and the inadequacy of penalties when obligations are not satisfied, several of the state DISCOMs are not complying completely with their RPO targets. It is necessary that all states adhere to the RPO targets set by respective SERCs.

The government should address the issues such as DISCOM financials, must-run status, problems of transmission and evacuation, on-time payments and payment guarantees, and deemed generation benefits.

Proper incentives should be devised to support utilities to obtain power over and above the RPO mandated by the SERC.

The tariff orders/FiTs must be consistent and not restricted for a few years.

Transmission requirements

The developers are worried that transmission facilities are not keeping pace with the power generation. Bays at the nearest substations are occupied, and transmission lines are already carrying their full capacity. This is due to the lack of coordination between MNRE and the Power Grid Corporation of India (PGCIL) and CEA. Solar Corporation of India (SECI) is holding auctions for both wind and solar projects without making sure that enough evacuation facilities are available. There is an urgent need to make evacuation plans.

The solution is to develop numerous substations and transmission lines, but the process will take considerably longer time than the currently under-construction projects take to get finished.

In 2017–2018, transmission lines were installed under the green energy corridor project by the PGCIL, with 1900 circuit km targeted in 2018–2019. The implementation of the green energy corridor project explicitly meant to connect renewable energy plants to the national grid. The budget allocation of INR 6 billion for 2018–2019 should be increased to higher values.

The mismatch between MNRE and PGCIL, which are responsible for inter-state transmission, should be rectified.

State transmission units (STUs) are responsible for the transmission inside the states, and their fund requirements to cover the evacuation and transmission infrastructure for renewable energy should be fulfilled. Moreover, STUs should be penalized if they fail to fulfill their responsibilities.

The coordination and consultation between the developers (the nodal agency responsible for the development of renewable energy) and STUs should be healthy.

Financing the renewable sector

The government should provide enough budget for the clean energy sector. China’s annual budget for renewables is 128 times higher than India’s. In 2017, China spent USD 126.6 billion (INR 9 lakh crore) compared to India’s USD 10.9 billion (INR 75500 crore). In 2018, budget allocations for grid interactive wind and solar have increased but it is not sufficient to meet the renewable target.

The government should concentrate on R&D and provide a surplus fund for R&D. In 2017, the budget allotted was an INR 445 crore, which was reduced to an INR 272.85 crore in 2016. In 2017–2018, the initial allocation was an INR 144 crore that was reduced to an INR 81 crore during the revised estimates. Even the reduced amounts could not be fully used, there is an urgent demand for regular monitoring of R&D and the budget allocation.

The Goods and Service Tax (GST) that was introduced in 2017 worsened the industry performance and has led to an increase in costs and poses a threat to the viability of the ongoing projects, ultimately hampering the target achievement. These GST issues need to be addressed.

Including the renewable sector as a priority sector would increase the availability of credit and lead to a more substantial participation by commercial banks.

Mandating the provident funds and insurance companies to invest the fixed percentage of their portfolio into the renewable energy sector.

Banks should allow an interest rebate on housing loans if the owner is installing renewable applications such as solar lights, solar water heaters, and PV panels in his house. This will encourage people to use renewable energy. Furthermore, income tax rebates also can be given to individuals if they are implementing renewable energy applications.

Improvement in manufacturing/technology

The country should move to domestic manufacturing. It imports 90% of its solar cell and module requirements from Malaysia, China, and Taiwan, so it is essential to build a robust domestic manufacturing basis.

India will provide “safeguard duty” for merely 2 years, and this is not adequate to build a strong manufacturing basis that can compete with the global market. Moreover, safeguard duty would work only if India had a larger existing domestic manufacturing base.

The government should reconsider the safeguard duty. Many foreign companies desiring to set up joint ventures in India provide only a lukewarm response because the given order in its current form presents inadequate safeguards.

There are incremental developments in technology at regular periods, which need capital, and the country should discover a way to handle these factors.

To make use of the vast estimated renewable potential in India, the R&D capability should be upgraded to solve critical problems in the clean energy sector.

A comprehensive policy for manufacturing should be established. This would support capital cost reduction and be marketed on a global scale.

The country should initiate an industry-academia partnership, which might promote innovative R&D and support leading-edge clean power solutions to protect the globe for future generations.

Encourage the transfer of ideas between industry, academia, and policymakers from around the world to develop accelerated adoption of renewable power.

Awareness about renewables

Social recognition of renewable energy is still not very promising in urban India. Awareness is the crucial factor for the uniform and broad use of renewable energy. Information about renewable technology and their environmental benefits should reach society.

The government should regularly organize awareness programs throughout the country, especially in villages and remote locations such as the islands.

The government should open more educational/research organizations, which will help in spreading knowledge of renewable technology in society.

People should regularly be trained with regard to new techniques that would be beneficial for the community.

Sufficient agencies should be available to sell renewable products and serve for technical support during installation and maintenance.

Development of the capabilities of unskilled and semiskilled workers and policy interventions are required related to employment opportunities.

An increase in the number of qualified/trained personnel might immediately support the process of installations of renewables.

Renewable energy employers prefer to train employees they recruit because they understand that education institutes fail to give the needed and appropriate skills. The training institutes should rectify this issue. Severe trained human resources shortages should be eliminated.

Upgrading the ability of the existing workforce and training of new professionals is essential to achieve the renewable goal.

Hybrid utilization of renewables

The country should focus on hybrid power projects for an effective use of transmission infrastructure and land.

India should consider battery storage in hybrid projects, which support optimizing the production and the power at competitive prices as well as a decrease of variability.

Formulate mandatory standards and regulations for hybrid systems, which are lagging in the newly announced policies (wind-solar hybrid policy on 14.05.2018).

The hybridization of two or more renewable systems along with the conventional power source battery storage can increase the performance of renewable technologies.

Issues related to sizing and storage capacity should be considered because they are key to the economic viability of the system.

Fiscal and financial incentives available for hybrid projects should be increased.

The renewable sector suffers notable obstacles. Some of them are inherent in every renewable technology; others are the outcome of a skewed regulative structure and marketplace. The absence of comprehensive policies and regulation frameworks prevent the adoption of renewable technologies. The renewable energy market requires explicit policies and legal procedures to enhance the attention of investors. There is a delay in the authorization of private sector projects because of a lack of clear policies. The country should take measures to attract private investors. Inadequate technology and the absence of infrastructure required to establish renewable technologies should be overcome by R&D. The government should allow more funds to support research and innovation activities in this sector. There are insufficiently competent personnel to train, demonstrate, maintain, and operate renewable energy structures and therefore, the institutions should be proactive in preparing the workforce. Imported equipment is costly compared to that of locally manufactured; therefore, generation of renewable energy becomes expensive and even unaffordable. Hence, to decrease the cost of renewable products, the country should become involve in the manufacturing of renewable products. Another significant infrastructural obstacle to the development of renewable energy technologies is unreliable connectivity to the grid. As a consequence, many investors lose their faith in renewable energy technologies and are not ready to invest in them for fear of failing. India should work on transmission and evacuation plans.

Inadequate servicing and maintenance of facilities and low reliability in technology decreases customer trust in some renewable energy technologies and hence prevent their selection. Adequate skills to repair/service the spare parts/equipment are required to avoid equipment failures that halt the supply of energy. Awareness of renewable energy among communities should be fostered, and a significant focus on their socio-cultural practices should be considered. Governments should support investments in the expansion of renewable energy to speed up the commercialization of such technologies. The Indian government should declare a well-established fiscal assistance plan, such as the provision of credit, deduction on loans, and tariffs. The government should improve regulations making obligations under power purchase agreements (PPAs) statutorily binding to guarantee that all power DISCOMs have PPAs to cover a hundred percent of their RPO obligation. To accomplish a reliable system, it is strongly suggested that renewables must be used in a hybrid configuration of two or more resources along with conventional source and storage devices. Regulatory authorities should formulate the necessary standards and regulations for hybrid systems. Making investments economically possible with effective policies and tax incentives will result in social benefits above and beyond the economic advantages.

Availability of data and materials

Not applicable.

Abbreviations

Accelerated depreciation

Billion units

Central Electricity Authority of India

Central electricity regulatory commission

Central financial assistance

Expression of interest

Foreign direct investment

Feed-in-tariff

Ministry of new and renewable energy

Research and development

Renewable purchase obligations

State electricity regulatory

Small hydropower

Terawatt hours

Waste to energy

Chr.Von Zabeltitz (1994) Effective use of renewable energies for greenhouse heating. Renewable Energy 5:479-485.

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The authors gratefully acknowledge the support provided by the Research Consultancy Institute (RCI) and the department of Electrical and Computer Engineering of Effat University, Saudi Arabia.

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Kumar. J, C.R., Majid, M.A. Renewable energy for sustainable development in India: current status, future prospects, challenges, employment, and investment opportunities. Energ Sustain Soc 10 , 2 (2020). https://doi.org/10.1186/s13705-019-0232-1

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Recent Research Progress on Sustainable Energy Management System Based on Energy Efficiency and Renewable Energy

Erkata Yandri 1 ,2 * , Kukuh Priyo Pramono 1 , Very Sihombing 1 , Luqmanul Hakim Effendi 1 , Denis Ardianto 1 , Roy Hendroko Setyobudi 1 , Suherman Suherman 3 , Satriyo Krido Wahono 4 , Haryo Wibowo 5 , Marchel Putra Garfansa 6 and Afrida Rizka Farzana 7

1 Graduate School of Renewable Energy, Darma Persada University, Special Region of Jakarta 13450 2 Center of Renewable Energy Studies, Darma Persada University, Jakarta 13450, Indonesia 3 Diponegoro University, Semarang 50275, Central Java, Indonesia 4 Research Center for Food Technology and Processing (PRTPP), National Research and Innovation Agency (BRIN), Special Region of Yogyakarta 55861, Indonesia 5 Institute of Energy and Power Engineering, Zhejiang University of Technology, Hangzhou 310027, P.R. China 6 Universitas Islam Madura, Pamekasan 69317, Madura, East Java, Indonesia 7 IPB University, Bogor 16680, West Java, Indonesia

* Corresponding author: [email protected]

Energy Management Systems (EMS) have become increasingly important in efforts to address global energy challenges, such as increasing energy demand and climate change. EMS can be used to improve energy efficiency; reduce greenhouse gas emissions; and increase energy security. The purpose of the research is to review the latest research progress which focuses on EMS from various sectors based on energy efficiency and renewable energy. This research method involves four steps: selecting the EMS topic, searching for related papers using keywords on Google Scholar; summarizing and categorizing the obtained papers, and creating a table for easy understanding of the collected research; followed by analysis and discussion. As a result, recent research progress on sustainable EMS has been discussed, emphasizing categories like IoT; cloud data; controllers; reinforcement learning; renewable energy sources; energy storage; energy trading; and dashboards. The focus in EMS studies lies on IoT devices; controllers; reinforcement learning; and renewable energy; with less emphasis on energy trading and dashboards. The primary objective is to facilitate energy use tracking for users in various sectors, enabling them to assess efficiency and cost-effectiveness. This review facilitates energy tracking across diverse sectors for users, enabling evaluation of efficiency and cost-effectiveness.

Key words: Green energy system / home energy storage / IoT / smart grid / smart home

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Energizing new energy research

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Jiaofeng Pan, Professor, President, Institutes of Science and Development, Chinese Academy of Sciences Credit: CASISD

The use of fossil fuels is a primary source of greenhouse gas emissions, and considered a culprit for global warming. Aiming for carbon neutrality — achieving a balance between emitting and absorbing carbon, many countries are looking into new energy solutions to cut carbon emissions. With increasing demands for low-carbon technologies, what are the global patterns of research growth in new energy? And what are some promising technologies? A collaborative report seeks to explore into these questions using bibliometric analysis. Here, Jiaofeng Pan, who leads the project, shares his insights.

Why do you focus on new energy technologies?

From wind and solar to biomass and geothermal energy, renewable energy resources offer solutions to the global climate change crisis. They also facilitate sustainable economic development, and bring benefits to human and environmental health. Therefore, ensuring access to affordable and clean energy is high on the agenda of United Nations’ Sustainable Development Goals. Considered the driving force for the energy revolution, new energy research is growing. We want to review the progress of new energy technology research in China and the world, and examine the connections between scientific publications and patents. We hope our analysis will provide a reference for academia and industry for their new energy research and technology deployment in future.

Who are the main contributors to this report?

The project is a joint effort by CASISD, CAS’s Wuhan Documentation and Information centre and Guangzhou Institute of Energy Conversion, along with Springer Nature. We used the Dimensions data from Digital Science for bibliometric and patent analysis to highlight the strengths and weaknesses of China's new energy technology research, and also conducted interviews with experts in key technology areas for their insights into opportunities and challenges for developing these new energy technologies.

What are some key findings on new energy research?

By assessing scientific publication in renewable energy, including solar, wind, biomass and geothermal energy, as well as new energy system technologies, such as advanced nuclear energy, hydrogen, energy storage and energy internet, we see accelerated growth of new energy research in the recent decade. Particularly, among the eight new energy fields analyzed, solar energy, energy storage and hydrogen have the largest research output in the period of 2015-2019, demonstrating the focus on these fields. For fields with more than 10,000 publications in the past five years, research on energy storage, hydrogen and energy internet sees the fastest growth.

How does China perform in new energy research?

Committed to achieving net-zero carbon emission by 2060, China is an active player in new energy research. It is the largest contributor to new energy research, accounting for more than a quarter of the global publications in the last five years. Particularly, it is a key contributor to the world’s top three new energy fields, with outstanding performance in energy storage, solar energy and hydrogen research by volume of publications. And similar with the global trends, China grows fastest in energy internet, hydrogen, and energy storage research output for major new energy fields 2015-2019. But average citation of China's new energy research output is relatively low compared with some developed countries, suggesting the need to improve the global impact of its research.

Outline some findings about promising new energy technologies?

We have explored 20 subtype technologies under the eight new energy fields, and define promising new energy technologies as those with a considerable amount of total research output, fast growth, and a sizable volume of top 1% papers by average citations. Here, battery storage, solar photovoltaic, solar fuel, hydrogen production, and energy internet architecture and core equipment technologies are identified as the top five promising new energy technologies.

Energy storage is a key component of the modern energy system, and contributes significantly to the development of novel power batteries, which have attracted growing research attention with the rise of the electric vehicle industry. Also a promising battery technology, hydrogen fuel cell provides an alternative option for transforming the traditional transportation systems and reducing carbon emission. New electro-catalytic approaches have promoted breakthroughs in solar fuel technologies, which are promising for reducing fossil fuel dependence. Energy internet technologies, key to the infrastructure of modern energy systems, need more applied research for improved implementation.

What are the challenges for developing new energy technologies?

Translation of new energy research results into applicable technologies remains a global issue. Bringing these new energy technologies from lab to market requires close collaboration between academia and industry, and governments also play an important supporting role.

China can play an important role in this energy revolution, and needs to improve research efficiency, focus more on high-quality research with social impacts, and encourage industry to participate in the technological innovation process.

Phone: +86 10 59358806

Website: www.casisd.cn

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For full report in English

www.nature.com/collections/casisd

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http://www.naturechina.com/pdf?file=/public/upload/pdf/2021/03/13/604c1b5a65c5d.pdf

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