Developments in renewable energy supply are uneven across energy carriers, regions and technologies.

KEY FACTS

Global investment in and deployment of renewables reached an all-time high in 2023, despite high interest rates and higher costs of raw materials.

Globally, renewable energy supplied 30% of electricity, 10% of heat and 3.5% of fuel in 2023.

Global renewable capacity additions need to reach almost 1 terawatts (TW) per year to achieve the global target of 11 TW by 2030.

Investment in renewable energy and enabling technology manufacturing grew 70% in 2023, mainly in solar PV and batteries.

In 2023, 24 countries updated their targets for the renewable share in electricity.

MODULE OVERVIEW

Ongoing economic and geopolitical developments spurred extensive transformations in the global energy supply landscape in 2023, with tighter markets and an increased focus on energy security. The post-pandemic economic rebound sparked high energy demand, which strained supply chains and caused price volatility, while the Russian Federation's invasion of Ukraine compounded these challenges and further destabilised markets. ¹ High inflation and cost of capital continued to hamper investment, particularly in developing countries with high debt burdens. ²

FIGURE 1.Increase in Energy Demand by Source, 2011-2021

Source: See endnote 5 for this section.

GLOBAL TRENDS

Developments in renewable energy supply are uneven across energy carriers, regions and technologies.

536

GW renewable power capacity addedin 2023

USD billion 623

investment in renewable power and fuels in 2023

182

countries with renewable energy targets across all sectors and technologies in 2023

KEY FACTS

Global investment in and deployment of renewables reached an all-time high in 2023, despite high interest rates and higher costs of raw materials.

Globally, renewable energy supplied 30% of electricity, 10% of heat and 3.5% of fuel in 2023.

Global renewable capacity additions need to reach almost 1 terawatts (TW) per year to achieve the global target of 11 TW by 2030.

Investment in renewable energy and enabling technology manufacturing grew 70% in 2023, mainly in solar PV and batteries.

In 2023, 24 countries updated their targets for the renewable share in electricity.

MODULE OVERVIEW

Ongoing economic and geopolitical developments spurred extensive transformations in the global energy supply landscape in 2023, with tighter markets and an increased focus on energy security. The post-pandemic economic rebound sparked high energy demand, which strained supply chains and caused price volatility, while the Russian Federation's invasion of Ukraine compounded these challenges and further destabilised markets. ¹ High inflation and cost of capital continued to hamper investment, particularly in developing countries with high debt burdens. ²

FIGURE 1.Increase in Energy Demand by Source, 2011-2021

Source: See endnote 5 for this section.

Only 45% of the increase in energy demand between 2011 and 2021 was met by renewables.

Many governments have promoted renewables as an affordable and secure source of energy to stabilise supply and mitigate inflation. Policy packages such as the US Inflation Reduction Act and the European Union's (EU) REPowerEU are aimed at boosting domestic manufacturing and deployment.

Direct subsidies to fossil fuels totalled around USD 600 billion in 2023, still above 2021 levels but below the all-time high of more than USD 1 trillion during the global energy crisis in 2022. ³ Many countries have moved to phase out fossil-fuelled heating systems and internal combustion engines, and there is increasing momentum to ban fossil fuels altogether and to redirect subsidies towards renewables. ⁴

Renewable Electricity is driving the Shift in Energy Supply

Between 2011 and 2021, total energy demand increased by 39 exajoules (EJ); fossil fuels and traditional biomass covered 53% of the increase while modern renewables covered only 45%. ⁵ (See Figure 1.)

In 2021, nearly half of the world's total final energy consumption was in the form of direct heat, followed by fuels (including liquid and gaseous fuels for transport), with a 29% share. ⁶ (See Figure 2.)

FIGURE 2.Total Final Energy Consumption and Share of Modern Renewables, by Energy Carrier, 2021

Source: Based on IEA. See endnote 6 for this section.

The proportion of electricity (also used for heat and transport) in the global energy supply has been rising consistently – reaching 23% in 2021, up from 19% in 2011 – with increasing dependence on electricity to meet demand across all sectors. ⁷ The renewable share in electricity generation increased marginally from 29.4% in 2022 to 30.3% in 2023, although this mostly covered the increase in electricity demand rather than replacing fossil fuels. ⁸ (See Figure 3.)

Installed renewable power capacity continued to grow, particularly wind and solar power, driven by policy support and investment that reached a record high of USD 622.5 billion in 2023 (up 8.1% from 2022). ⁹ The majority (86%) of power capacity additions during the year were renewable, with record additions in solar photovoltaics (PV) (407 gigawatts, GW) and wind power (117 GW), which together accounted for 98% of renewable capacity additions. ¹⁰ Capacity growth in 2023 was driven largely by China (solar PV and wind power), as well as by the United States and the EU (solar PV), and India and Brazil (solar PV and wind power). ¹¹

Renewable electrcity generation has grown an average of 5.4% per year over the last decade

Progress in renewable heat has been comparatively slower, with the share of modern renewables (excluding traditional biomass ⁱ ) in the heat supply increasing moderately from 8.9% in 2011 to 11.6% in 2021. ¹² (See Figure 4.) Modern bioenergy remained the dominant source of renewable heat, supplying 7.9%, while solar thermal and geothermal direct heat contributed 1.4%; the remaining 2.4% was supplied by renewable electricity. ¹³

Biofuels accounted for almost all renewable fuels. Renewable hydrogen has been seen as a potential game-changer for decarbonising energy-intensive sectors, and in 2023 the number of electrolysis plants grew rapidly to total around 1.1 GW of capacity, up from 700 megawatts (MW) in 2022. ¹⁴ However, more than 99% of current hydrogen production is still based on fossil fuels. ¹⁵

FIGURE 3.Electricity Generation by Energy Source, 2014-2023

Source: Ember. See endnote 8 for this section.

Regional Disparities in the Energy Transition

Regional developments in renewables remained highly unequal in 2023, with technological advances and investments occurring mainly in China, the EU and the United States. ¹⁶ These regions saw significant investments in solar PV and wind power as well as energy storage, backed by substantial policy support and financial incentives. China maintained the global lead in renewable energy investments, accounting for 44% of the total in 2023, followed by Europe (20.9%) and the United States (15%). ¹⁷ Africa and the Middle East together represented only 3.6% of investment in renewables. ¹⁸

China led all regions for investment in renewables, accounting for 44% of total global investment in 2023.

In the renewable heat sector, modern bioenergy produced 1.3 EJ of derived heat in 2021, a 9% increase from 2020; solid biomass (wood chips, pellets, etc.) comprised more than half of the total, followed by waste-to-energy (43%) and biogas (only 4%). ¹⁹ The solar heat market contracted 7.2% globally, to reach a newly installed capacity of an estimated 21 gigawatts-thermal (GW_th). ²⁰ China accounted for around 65% of global sales of solar water collectors (for heating), followed by India, Brazil, Türkiye and the United States. ²¹ China was the world's fastest growing market for geothermal heat, with key markets also in Türkiye, Iceland and Japan; together, these four countries accounted for nearly 90% of global geothermal direct use in 2023. ²² A total of 0.1 GW of geothermal power capacity was added in 2023. ²³

For renewable fuels, the United States supplied 40% of the world's biofuels in 2022 (latest available data), followed by Brazil (21%) and Indonesia (6.2%). ²⁴ Germany contributed 2.8% of the world's supply, ranking it among the top five producers and as the European leader. ²⁵ Europe, the Americas and Oceania have emerged as leaders in low-carbon ⁱ hydrogen production, accounting for more than 80% of the annual total of around 45 million tonnes of announced volumes. ²⁶ China, India and the Middle East showed the highest relative growth in announced low-carbon hydrogen production to 2030. ²⁷ Global growth in renewable hydrogen announcements to 2030 (more than 6.5 million tonnes annually) greatly outpaced low-carbon ⁱⁱ hydrogen announcements (around 0.4 million tonnes annually). ²⁸ The stronger growth in renewable hydrogen announcements is linked to a greater regulatory focus on renewable hydrogen and to the larger number of regions with attractive resources for production. ²⁹

Latin America and the Caribbean had the highest regional share of renewables in the electricity mix in 2023, at 62% (up from 52% a decade earlier). ³⁰ (See Figure 5.) Hydropower continued to dominate the region's electricity supply, contributing 43.2% of total generation and 69.8% of renewable generation. ³¹ Renewable electricity generation in Latin America and the Caribbean grew 5%. ³²

FIGURE 4.Share of Renewable Heat Production by Energy Source, 2011 and 2021

Source: IEA. See endnote 12 for this section.

In Oceania, the share of renewables in the electricity mix rose to 43% in 2023 (up from 23% in 2013), due largely to developments in Australia, where renewable electricity generation grew 9% in 2023 alone. ³³ This increase is attributed mainly to growth in the combined share of solar PV and wind energy, which rose from 5% to 25% in the region during the decade. ³⁴

Overall, the global renewable power sector experienced notable growth in 2023, marked by a 54% increase in renewable power capacity additions, reaching 536 GW. ³⁵ Solar PV alone accounted for more than three-quarters of the additions. ³⁶ (See Figure 6.) Significant contributions came from Europe, the United States, Brazil and particularly China. ³⁷ (See Figure 7.)

Despite advancements, the renewables sector faced challenges from geopolitical conflicts, protectionism, and rising greenhouse gas emissions, highlighting the complexity and ongoing risks in the global energy landscape. ³⁸ Europe and the United States have sought to reduce reliance on China for renewable energy components, while many countries continue to prioritise fossil fuels for energy security. ³⁹ The global energy transition remains uneven, marked by persistent inequality. ⁴⁰ (See Table 1.)

FIGURE 5.Shares of Renewable Electricity Generation by Region, 2013 and 2023

Source: Ember. See endnote 30 for this section.

Global renewable power capacity additions grew 54% in 2023.

FIGURE 6.Renewable Power Total Installed Capacity and Additions, by Technology, 2023

Note: Data is for capacity that is grid-connected and in operation.

Source: See endnote 36 for this section.

FIGURE 7.Renewable Power Capacity Additions, by Region/Country, 2023

Note: Capacity may not exactly add up to 536 GW due to rounding.

Source: See endnote 37 for this section.

Latin America, Africa, Asia and Oceania(excl. China) represented 18% of total additions despite representingover 2/3 of global population.

TABLE 1.Top 5 Countries for Renewable Energy Capacity and Additions, 2023

Notes: Per capita renewable power capacity (not including hydropower) ranking based on IRENA and IHA and on 2022 population data from the World Bank. Solar water heating collector ranking for total capacity is for year-end 2023 and is based on capacity of water (glazed and unglazed) collectors only. Data from International Energy Agency Solar Heating and Cooling Programme. The number in brackets represents the change from the 2022 ranking. Rankings for 2022 have been updated with the latest capacity data and may be different from the tables in GSR 2023.

Source: See endnote 40 for this section.

Renewable Energy Manufacturing

Investment in global manufacturing of renewable energy and enabling technologies grew 70% in 2023 to reach nearly USD 200 billion. ⁴¹ Solar PV and battery manufacturing installations dominated investments, together representing 95% of the total. ⁴² China accounted for three-quarters of global investment in renewable and enabling technologies, down from 85% in 2022, as investments in the United States and Europe grew strongly (especially for battery manufacturing). ⁴³ (See Figure 8.)

Investment in other clean energy technologies – wind, heat pumps and electrolysers – accounted for a much smaller fraction of total investment, at around 7% in 2022 and 4% in 2023. ⁴⁴ Investment in wind energy manufacturing, including in nacelle, blade, and tower production facilities, fell slightly in absolute terms in 2023. ⁴⁵ China accounted for virtually all of the investment in wind manufacturing facilities. ⁴⁶ For electrolyser and heat pump manufacturing, the EU and the United States together accounted for a larger share of investment than China, with virtually no investments in manufacturing for these technologies occurring elsewhere during the year. ⁴⁷

Integrating industrial and energy policies is crucial for advancing the renewable energy transition. Strengthening local manufacturing is needed to reduce import reliance and support domestic industries. Better balancing between supply and demand can help ensure more stable and efficient energy systems. This requires enhancements to grid infrastructure and the deployment of storage technologies, as well as international and regional co-ordination. ⁴⁸ ( See Sidebar 1.)

FIGURE 8.Investment in Manufacturing of Renewable Energy and Enabling Technologies, 2022 and 2023

Note: Rest of Asia comprises India, Japan, the Republic of Korea and South-East Asia.

Source: See endnote 43 for this section.

Sidebar 1. Grid Upgrades and Storage Solutions for a Renewables-based Power System

Renewable energy technologies have come a long way in just 20 years, especially through the rapid growth of solar PV and wind power. However, integrating and expanding renewables to achieve high shares in utility grids remains a major challenge, especially as the share of variable renewable energy (wind and solar power) exceeds 13% globally.

In 2023, several countries experienced much higher shares of variable renewable generation than the global average. Denmark led with 67% of gross electricity from variable renewables (57% wind, 10% solar), and five other countries achieved shares above 40%: Lithuania (46% wind, 12% solar), Greece (22% wind, 19% solar), the Netherlands (24% wind, 17% solar), Spain (24% wind, 17% solar) and Portugal (29% wind, 10% solar). The top countries with high shares of variable renewables are mostly concentrated in Europe, with the notable exceptions of Uruguay (36% wind, 3% solar), Chile (12% wind, 20% solar) and Australia (12% wind, 17% solar).

Energy storage technologies can help tackle the variability of wind and solar energy by storing surplus energy generated during times of high output but low electricity demand, and then making it available during times of lower output but high electricity demand. Integrating energy storage systems (such as pumped storage and batteries) with variable renewable energy can provide better balance to the overall system, depending on the grid operator requirements.

In 2023, worldwide utility-scale battery storage capacity increased a robust 65% to reach 29.2 GW. Investment in battery storage worldwide continued to grow substantially, rising 76.8% to USD 36.3 billion in 2023. China dominated with USD 14.5 billion (up 203% over 2022), followed by the United States with USD 9.6 billion (up 18.8%) and Germany with USD 3.3 billion (up 61.2%). Energy storage investments also surged in Italy (USD 2.2 billion) and Australia (USD 1.0 billion).

Pumped storage added 6.48 GW in 2023 – down 38% from the previous year's additions – for a global total of 179 GW. Pumped storage remains the most common and cost-effective solution for large-scale utility storage, although new capacity often requires transmission extensions due to the geographical distance from generation or load centres.

Grids remain a major bottleneck for implementing high shares of renewables in the power system. Connection queues worldwide amounted to an estimated 3 terawatts in 2023 (equivalent to six times the capacity of solar PV and wind power added during the year). Grids take longer to build and require careful planning to keep pace with the growth of renewables. In 2023, global grid investment increased 5.3% to an estimated USD 310.2 billion. More than half of this growth was in the United States (up 27.9% to USD 86.5 billion) and China (up 25.4% to USD 78.9 billion), and other top countries included Germany, Canada and India. Investment in electricity networks in developing countries has been impeded by the weak financial situation of some distribution companies, the lack of adequate investment frameworks (such as performance-based regulation), the lack of least-cost system plans, and high operational and commercial losses.

Regional interconnection and market integration are essential to increase grid reliability and security as well as quality of supply. Positive developments emerged in Southeast Asia, where four countries (Lao People's Democratic Republic, Thailand, Malaysia and Singapore) agreed to a Power Integration Project during the 41st ASEAN Ministry of Energy Meeting in August 2023. In Europe, work began in July 2023 on the Celtic interconnector project to facilitate electricity exchange between Ireland and France.

Source: See endnote 48 for this section.

Tracking Progress towards the Global Target

At the 2023 United Nations Climate Change Conference (COP 28) in Dubai, United Arab Emirates, governments agreed to triple renewable power capacity and double energy efficiency improvements by 2030. ⁴⁹ At the current rate of capacity additions, the world will not achieve the tripling target, reaching 8,000 GW by 2030, short of the 11,000 GW of the target. ⁵⁰ (See Figure 9.) As countries prepare to update their Nationally Determined Contributions (NDCs) towards reducing greenhouse gas emissions under the Paris Agreement, there is a window of opportunity to make clear commitments and raise ambition. ⁵¹ As of early 2023, only 14 countries had explicit renewable capacity targets for 2030 in their NDCs, and commitments across NDCs amounted to only around 1,300 GW. ⁵²

Among major country commitments, the EU and the United States aim to be climate neutral by 2050, China by 2060 and India by 2070. ⁵³

FIGURE 9.Annual Additions of Renewable Power Capacity, by Technology, 2017-2023, and Yearly Additions Needed to Achieve the International Energy Agency's Net Zero Scenario by 2030

Source: See endnote 50 for this section.