The world is in the grip of a global energy crisis. The fuel markets have witnessed severe demand and supply shocks owing to the successive waves of the coronavirus pandemic followed by the Russia-Ukraine conflict. The Russia-Ukraine war, which began in the early part of 2022 and still continues to rage on, has fractured decades of energy trade relations with Russian gas supply cut off to many nations. Thus, entire countries, particularly European nations, are now in a serious situation of energy shortage and escalated energy bills. Meanwhile, there is turmoil across international oil and gas markets, volatility in currencies, and severe supply disruptions in commodities.

As governments worldwide develop new strategies and introduce policies to deal with this unprecedented crisis, it is being realized with greater clarity that clean energy and reduction of dependence on fossil fuels is the only way forward. Large-scale deployment of clean energy can help nations ensure their future energy security and make them independent from the geopolitical disruptions in energy supplies. Further, renewable energy, especially solar and wind, is cheaper or at par with fossil fuel-based energy across most of the economies of the globe, making the case stronger for renewables. In addition, renewable energy is surely cleaner than fossil fuels and can help countries meet their decarbonisation aims. According to the International Energy Agency (IEA), global renewable energy progress has been encouraging in the recent months and annual capacity additions in 2022 are expected to be about 340 GW, a new record.

Some countries already have well-established renewable energy markets and are now expanding their installations and diversifying into emerging segments like green hydrogen, offshore wind, solar-wind hybrids, and energy storage. Meanwhile, some countries are just beginning their renewable energy journeys and are becoming new attractive hotspots for investors and developers. According to the 60th edition of the EY’s Renewable Energy Country Attractiveness Index (RECAI) published in November 2022, the top five most attractive countries for renewable energy investments include the United States, China, Germany, the United Kingdom, and France, which are all established renewable energy markets with an enabling policy ecosystem and sizeable clean energy installations. However, the report also highlights emerging markets like Greece, Morocco, and Canada, that are slowly becoming favorable investment destinations for clean energy deployments.

With this backdrop, the current article explores the global renewable power progress across solar PV, wind and hydropower segments and the future outlook supported by IEA statistics…

Solar power

Solar PV is becoming the cheapest source of new power generation across the world, and thus, continues to grow by leaps and bounds. Despite covid-19 pandemic-led restrictions, supply chain disruptions and volatile commodity prices, solar PV installations witnessed an increase of 190 GW in 2021. Meanwhile, energy generation from global solar PV deployments increased by a record margin of 179 TWh 2021 to exceed 1,000 TWh. This marked a 22 per cent growth in 2021 when compared to 2020. Solar PV was the third largest renewable power technology after hydropower and wind and accounted for 3.6 per cent of global power generation. China continued its dominance in terms of annual solar PV generation growth followed by the United States and European Union.

In terms of sub-segments, utility-scale solar deployments continued to contribute the largest share to new installations in 2021. However, utility-scale projects are becoming challenging to deploy owing to increasing land and grid-related concerns. Moreover, with the increasing policy impetus on promotion of distributed solar across residential as well as commercial and industrial installations, the share of utility-scale projects is expected to decline in the near future. The corporate power purchase agreement market, especially, is expanding rapidly as consumers opt for cheaper and greener solar power over increasing grid-based electricity and fuel prices.

Wind power

Wind power installations increased by 113 GW in 2020 followed by 830 GW in 2021 compared with just 59 GW in 2019. Thus, a record increase of 273 TWh in wind power generation was witnessed in 2021 owing to the growth in yearly installations in the past two years. This generation growth of 45 per cent more than the increase in 2020, is the highest among all power sources. Further, despite the impressive capacity additions witnessed in the solar PV segment in recent years, wind power continues to be the leading non-hydro renewable energy source and was responsible for generating 1,870 TWh in 2021.

China followed by the United States and Brazil were the leading wind power producing nations in 2021. Meanwhile, low-wind conditions over a prolonged period hampered wind power generation in the European Union. In terms of technology, more than 90 per cent of the new installations were in the onshore wind space and offshore wind segment contributed to just 7 per cent. This can be mainly attributed to the fact that onshore wind is a much more mature technology with presence across the globe. Meanwhile, offshore wind is still in early stages of development and is present in only a few countries. However, owing to the possibility for much higher wind power generation, offshore wind is poised for massive expansion in the coming years.


Hydropower, the leading renewable energy source, witnessed energy generation of 4,327 TWh in 2021. Although the capacity additions increased to around 35 GW last year, the generation was slightly less than the previous year. This decrease in energy generation can be attributed to droughts across countries like Brazil, India, China, Canada, and the United States that have large hydropower capacities installed. Since droughts have continued in 2022 as well, hydropower generation can be expected to be low this year as well. China, as in the case of solar and wind power, was responsible for a large chunk of the new hydropower capacity constructed in 2021. Large capacity additions can be expected this year as well in China owing to an impressive project pipeline.

Although hydropower is a very mature power generation technology, there have been concerns regarding their impact on environment especially with regards to increased risk of floods. Further, poor construction practices in many countries are reported to have disturbed the natural ecological balance of the region and has led to uprooting of the local population. Moreover, severe droughts in many countries, long gestation periods and the capital-intensive nature of these projects have also led to questions regarding the efficacy of these projects. Much of the innovation in this space is focused on improving the flexibilization and incorporating digital tools for efficient operations.

Interestingly, it is the infirm renewable power sources – solar and wind, that have led to a renewed interest in construction of new hydropower facilities. Hydropower can not only help provide base load power but also support grid balancing as intermittent renewable energy penetration in the grid continues to increase. Pumped storage projects, especially, are being planned in many nations to serve as large grid-scale storage devices to provide backup when required and ensure the stability of grid. Although government attention in the recent years has been focused on increasing solar and wind power deployments, hydropower projects need to be promoted owing to their obvious use for grid management. However, adequate care needs to be taken to ensure that these hydropower projects are developed in a sustainable and environment-friendly manner.

The way forward

According to the IEA’s latest World Energy Outlook 2022, the current energy crisis exposes the vulnerability and unsustainability of our present energy systems. Further, the urgent actions and policy directions being taken by the governments and corporates are not temporary but have far-reaching impacts. In the report’s Stated Policies Scenario (STEPS), which shows the trajectory in the current policy environment, a 50 per cent rise in annual clean energy investments by 2030 is expected because of new policies measures across leading energy markets.

For instance, annual solar and wind installations are projected to increase massively owing to the US Inflation Reduction Act. Improvements in energy efficiency measures and accelerated renewable power deployment will significantly reduce European Union’s demand for fossil fuels. In Asia, meanwhile, China is witnessing rapid expansion of its clean energy capacity because of new targets and India is progressing towards its target of 500 GW of non-fossil fuel power by 2030.

However, adequate attention needs to be paid to develop technology advancements to secure supply chains and reduce over-dependence on any one nation for raw materials as well as finished products. Thus, countries need to develop their own manufacturing capacities, if possible, at any early stage. Further, if essential raw material reserves are unavailable locally, then diverse trade agreements should be worked upon to prevent supply chain disruptions. Going forward, recycling of solar PV modules, wind turbines as well as batteries is going to gain popularity to reclaim essential materials and drive down costs.

Extensive and rapid investments are required as countries move towards cleaner energy systems to ensure energy security and prevent such future energy crisis. However, investors are quite conscious about long-term investments in the current geopolitical climate especially with regards to fragile supply chains and prolonged approval processes. They are looking for long-term certainty and credibility not just with regards to the project returns but also the policy and regulatory climate. Thus, going forward, enabling policies, lack of bureaucratic hurdles, clear and short approval timelines – all easily controlled by governments – will be paramount to attract clean energy investments.