As more countries, companies and individuals seek energy sources beyond fossil fuels, interest in renewable energy continues to rise.

In fact, world-wide capacity for energy from solar, wind and other renewable sources increased by 50% in 2023 (link resides outside ibm.com). More than 110 countries at the United Nations’ COP28 climate change conference agreed to triple that capacity by 2030, and global investment in clean energy transition hit a record high of USD 1.8 trillion in 2023 (link resides outside ibm.com).

But with all of this new capacity, how are renewable energy resources really being used? Here, we will look at examples and applications of renewable energy across a variety of industries, its impact on energy systems and the energy technologies that will drive its use in the future.

Renewable energy, sometimes called green energy, refers to energy generated from natural resources such as sun, wind, rain, geothermal heat and ocean tides. While fossil fuels—including non-renewable energy sources such as oil, coal and natural gas—are finite resources, renewable resources are replenished over time and considered inexhaustible (that is, they are not in danger of being depleted or used up entirely.) These power sources generally have a lower impact on the environment than fossil fuels, which released carbon dioxide and other harmful greenhouse gas emissions (GHGs) that contribute to global warming and are widely considered to be the main driver of climate change.

Types of renewable energy sources include:

• Solar: Sunlight is converted into electricity and heat in two ways. The most common method of producing solar energy, photovoltaics (PV), collects sunlight via solar panels and converts it to electricity. For larger-scale uses, the concentrating solar-thermal power (CSP) method uses mirrors to collect sunlight for fluid-filled receivers, which generate thermal energy for power.
• Wind: Individual wind turbines and large-scale wind farms harness kinetic energy from the air for electricity generation. Wind power can be generated by turbines on land, as well as offshore wind farms over water.
• Hydro: Water-generated hydroelectric power is produced using tidal power, bodies of water and dams to move electricity-creating turbines. Some 60% of all renewable electricity (link resides outside ibm.com) comes from hydropower sources, making it the largest contributor to renewable electricity worldwide.
• Geothermal: Hot steam and hydrocarbon vapor from geothermal reservoirs within the Earth can be harnessed for energy production. Geothermal heat pumps (GHPs) are used to heat, cool and provide hot water to homes and offices.

Biomass is sometimes considered a source of renewable energy. The term biomass energy refers to the conversion of organic materials and byproducts (including organic matter like wood or waste) into either electrical energy or biofuels such as ethanol or biodiesel. However, producing these forms of bioenergy can contribute to greenhouse gas emissions and deforestation; as a result, some do not consider them completely renewable sources of energy. Additionally, while nuclear power is often considered a “clean” energy source due to its low carbon emissions, it is not renewable; nuclear energy requires uranium, which is a finite resource.

Governments around the world are taking strides to increase production and use of alternative energy to meet energy consumption demands. Reducing dependence on fossil fuels and diversifying the energy mix can help countries lower their carbon footprints and contribute to international efforts to limit global warming, thus protecting ecosystems and biodiversity. It also appeals to those trying to boost their energy security and independence, as renewable sources are locally available and less impacted by price volatility and geopolitical tensions. Additionally, many governments see renewable energy as a way to improve their economies through job creation and investment, and public health by reducing air pollution.

• Iceland: Known for its unique geothermal landscapes, Iceland is a world leader in harnessing geothermal energy. More than 85% (link resides outside ibm.com) of Iceland’s electricity comes from local renewable resources, including hydropower and geothermal power.
• Portugal: The country was one of the first in Europe to pledge carbon neutrality by 2050 (link resides outside ibm.com). Portugal set a record last year for most consecutive days powered solely by renewable energy—for 149 straight hours (link resides outside ibm.com), or more than six days, energy generated from renewable sources exceeded the country’s consumption needs.
• Uruguay: Uruguay has made massive investments in wind and solar power and now gets nearly 98% of its electricity from renewables (link resides outside ibm.com). The country’s decarbonization efforts and swift transition to renewable energy was prompted by rising fuel prices in the early 2000s.

Cities, towns and other communities are also evaluating their environmental impact and incorporating renewables into their energy-generation plans. Local programs are using renewable sources of energy to offset electricity costs and provide greater reliability. Through decentralized energy systems, microgrids and smart grids, communities are diversifying their options for sourcing electricity and monitoring systems for more efficient use. These systems can be especially useful during natural disasters, cyberattacks or other events that may disrupt the power supply in a region.

Some cities are requiring new construction to include energy-efficient green buildings or offering incentives to prompt older buildings to modernize for renewable capacity. Others are working renewables into municipal infrastructure by installing solar-powered streetlights or purchasing electric school buses and other vehicles.

Companies and organizations seeking more sustainable energy sources have a number of ways to procure renewable energy. They can invest in and install their own equipment, from solar panels to wind turbines, for on-site generation. Many utilities offer the option for companies to purchase green power by paying a premium for electricity generated from renewable sources. Other companies use power purchase agreements (PPAs), or long-term agreements with renewable electricity producers, such as solar power plants or wind farms. These offer cost savings for the purchaser and stability for the provider.

They’re using that renewable energy for a wide variety of things, including:

Powering operations: In manufacturing, wind energy and solar power are fueling warehouses and factories. In the agriculture sector, innovations such as solar-powered irrigation systems are reducing reliance on fossil fuels and decreasing operating costs. And as growing use of artificial intelligence (AI) and other new technologies increase demand for energy-intensive data centers, major tech companies are using renewable power sources to limit their environmental impact.

Optimizing energy efficiency: Companies are also investing in technologies to optimize their energy use and further reduce their carbon emissions. By integrating smart grids and Internet of Things (IoT) devices, businesses can better manage their energy use.

Building sustainable supply chains: Companies are looking beyond their own operations to their supply chains, recognizing that they can make a significant impact on Scope 3 emissions. They are increasingly requiring their suppliers to use renewable energy and adopt energy-efficient practices.

Meeting compliance and sustainability reporting requirements: Using renewable energy can help businesses meet mandatory reporting requirements and contribute to local and international goals in the fight against climate change.

Enhancing brand reputation: More and more consumers prefer to support businesses that prioritize sustainability and offer green products. By harnessing renewable energy, companies can position themselves as leaders in their industry and attract environmentally conscious customers.

Creating new income streams: Businesses that generate more renewable energy than they consume can sell the surplus back to the grid through feed-in tariffs or net metering arrangements. They can also earn Renewable Energy Certificates (RECs) for the power they generate. Some are adopting an “Energy as a Service” (EaaS) model, opening up opportunities to manage energy systems and efficiency for other companies.

Going forward, innovations in renewable energy storage and grid integration will open new doors for ways to make use of green power, while artificial intelligence and machine learning aid in optimizing energy use. Countries, corporations, communities and even individuals are showing that integrating renewable power into business operations can drive both sustainability and innovation—and pave the way for a more sustainable future. How can your organization make its own contribution?

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