In 2024, the largest regional investments into renewable energy came from China and Europe. China alone invested over *** billion U.S. dollars, while the European Union and United Kingdom contributed roughly *** billion to sustainable energy technologies. Investment in the United States was also significant on a global scale. U.S. clean energy consumption The United States is one of the largest consumers of renewable energy worldwide. Though hydroelectric power was the most common source of renewable electricity until 2018, wind took over in that year, reaching *** terawatt hours in 2024. In recent years, wind and solar accounted for most of the new installed capacity. Investment in renewables is expected to increase around the world in the next years. Renewables in Europe Germany holds a significant position as a leading consumer and producer of renewables worldwide, notable for its onshore wind capacity. Spain, the United Kingdom, and France are also among the largest installers of total wind power capacity in the world. Biomass is another major source of renewable energy for Europe, particularly in the heating and cooling sector.

Chinese investment in clean energy is the highest worldwide. In 2019, China pumped some 83.4 billion U.S. dollars into clean energy research and development. The United States and Japan had the second and third highest clean energy investments that year, at 55.5 billion and 16.5 billion U.S. dollars, respectively. All selected countries combined had spent 219.2 billion U.S. dollars in alternative energy technologies. The leading three entries accounted for roughly 71 percent of total investments.China’s wind and solar capacity As an economic and industrial powerhouse, China is burdened with a huge daily power demand. Although the government is still heavily involved in broadening its coal-fired power plants, concerns over air pollution and its impact on the health of its most vulnerable citizens have resulted in greater awareness for renewable energy sources. In 2018, China’s cumulative wind power capacity amounted to 209.5 gigawatts. Solar PV is also common in the country, with around 306 gigawatts of cumulative solar power capacity installed as of 2021. Most attractive countries for renewable investment The United States is the most attractive market for renewable investment, according to an April 2020 score, which takes into account existing governmental policies and deployment opportunities within each country. It was the first time since 2016 that the U.S. ranked higher than China and largely the result of a production tax credit (PTC) extension and a greater focus on future offshore wind installations.

As renewables have become a compelling investment proposition, investment into new renewable power has grown from less than USD 50 billion per year in 2004, to about USD 300 billion per year in the recent years, exceeding investments into new fossil fuel power by a factor of three in 2018. Yet, renewable investments remain below their potential. Scaled up renewable energy investment, on the foundation of sound enabling policy frameworks, is critical to accelerate the global energy transformation and reap its many benefits, while achieving climate and development targets. By addressing key risks and barriers, public finance, including climate finance, plays an important role in bridging the financing gap and attracting further investment from the private sector to renewables. Institutional investors, such as pension funds, insurance companies, endowments and sovereign wealth funds, have the potential to scale up major investments. IRENA’s Sustainable Energy Marketplace showcases several financial instruments and funds available to source investment for individual projects.

China was by far the leading country based on energy transition investments worldwide in 2024. China's energy transition investments amounted to over *** billion U.S. dollars that year. In a distant second place that year was the United States, with energy transition-related investments amounting to over *** billion U.S. dollars. Global energy transition investments amounted to more than *** trillion U.S. dollars in 2024.

According to Cognitive Market Research, the global renewable energy investment market size will be USD 981542.2 million in 2024. It will expand at a compound annual growth rate (CAGR) of 9.00% from 2024 to 2031.

North America held the major market share for more than 40% of the global revenue with a market size of USD 392616.88 million in 2024 and will grow at a compound annual growth rate (CAGR) of 7.2% from 2024 to 2031.
Europe accounted for a market share of over 30% of the global revenue with a market size of USD 294462.66 million.
Asia Pacific held a market share of around 23% of the global revenue with a market size of USD 225754.71 million in 2024 and will grow at a compound annual growth rate (CAGR) of 11.0% from 2024 to 2031.
Latin America had a market share of more than 5% of the global revenue with a market size of USD 49077.11 million in 2024 and will grow at a compound annual growth rate (CAGR) of 8.4% from 2024 to 2031.
Middle East and Africa had a market share of around 2% of the global revenue and was estimated at a market size of USD 19630.84 million in 2024 and will grow at a compound annual growth rate (CAGR) of 8.7% from 2024 to 2031.
The solar energy is the fastest growing segment of the renewable energy investment industry

Market Dynamics of Renewable Energy Investment Market

Key Drivers for Renewable Energy Investment Market

Increasing global energy demand to drive market growth

Increasing global energy demand is a significant driver of growth in the Renewable Energy Investment Market. As populations expand and economies develop, the need for sustainable and reliable energy sources intensifies. Urbanization and industrialization, particularly in emerging economies, lead to higher electricity consumption, pushing energy providers to seek alternatives to fossil fuels. Renewable energy sources, such as solar, wind, and hydro, present viable solutions that not only meet rising demand but also contribute to environmental sustainability. Additionally, the push for energy security and independence encourages investments in renewable technologies, allowing countries to reduce their reliance on imported fuels. This growing appetite for clean energy solutions drives innovation, efficiency improvements, and ultimately, a more robust and diversified energy portfolio, facilitating a transition to a low-carbon economy.

International climate agreements to boost market growth

International climate agreements play a crucial role in boosting growth in the Renewable Energy Investment Market. Initiatives like the Paris Agreement set ambitious targets for reducing greenhouse gas emissions, compelling nations to transition from fossil fuels to renewable energy sources. These agreements foster global cooperation, encouraging countries to commit to specific renewable energy targets, thereby increasing investments in clean technologies. As governments implement policies aligned with these agreements, they provide incentives such as tax breaks, subsidies, and grants, further driving investment. Moreover, corporate commitments to sustainability and net-zero emissions align with international goals, amplifying market demand for renewable energy projects. This synergistic relationship between policy frameworks and market dynamics accelerates the development and deployment of renewable energy solutions, positioning the sector for significant growth in the coming years.

Restraint Factor for the Renewable Energy Investment Market

High initial investment costs to limit market growth

High initial investment costs represent a significant restraint on the growth of the Renewable Energy Investment Market. While renewable technologies, such as solar panels and wind turbines, have seen decreasing costs over time, the upfront capital required for infrastructure development remains substantial. This barrier can deter potential investors, especially in regions where financial resources are limited or where fossil fuel alternatives are more economically attractive in the short term. Additionally, the lengthy payback periods associated with renewable energy projects can further complicate investment decisions. Smaller businesses and households may lack access to financing options, limiting their ability to participate in the renewable energy transition. Consequently, these high initial costs can slow down the adoption of renewable technologies, hindering the overall market growth desp...

In 2024, the total new investment in renewable energy amounted to approximately ****** billion U.S. dollars worldwide. This was an ***** percent increase from the previous year. China leads the way The amount of funding provided for clean energy worldwide has steadily increased over the last decade. In 2014, clean energy investments totaled *** billion U.S. dollars and increased to a peak of ****** billion U.S. dollars in 2024. The significant increase in investment funding indicates that the industry has matured greatly. Policy support for renewable sources, an accelerating industry, and the emergence of publicly listed companies that own renewable energy assets (also known as yieldcos) have driven the steady rise in clean energy investment. The country with the highest investment in renewable energy is China, with investments amounting to *** billion U.S. dollars in 2024. Investment is highest for both solar and wind There are many sources of renewable energy available these days, such as biomass and waste-to-energy, geothermal and marine. However, investment in solar and wind energy is by far the highest. Global investment in solar PV energy has soared during the last years, rising from *** billion U.S. dollars in 2019 to almost *** billion U.S. dollars in 2022.

This statistic shows the investment in renewable energy as a share of the gross domestic product (GDP) worldwide in 2015, broken down by select country. In that year, the United States invested only *** percent of its GDP in renewable energy.

The Southeast Asia Renewable Energy Market size was valued at USD XX Million in 2023 and is projected to reach USD XXX Million by 2032, exhibiting a CAGR of 7.40 % during the forecast's periods. Currently, the Southeast Asia renewable energy market is vibrant due to rising awareness and concern on environmental conservation and energy portfolio diversification across the region’s countries. Southeast Asia has abundant renewable resource endowment such as solar energy, wind energy, hydro energy, biomass energy etc. for which the country is in a good standing to harness environmental amenities to respond to increasing energy demands and climate change challenges. Countries such as Thailand, Vietnam, Indonesia, and the Philippines are among those in the region that are most progressing in terms of renewable energy plans and available diverse energy sources. The government has the most influence because existing markets are mainly dependent on these policies and bonuses to grow. Most of the SEA countries have adopted the supporting policies like feed-in tariffs, tax exemptions, and quotas for the renewables to spur investment and promote more project activities. The cost of renewable technologies has come down over the years; they have improved in efficiency and are generally cheaper as compared to the conventional energy sources. Nevertheless, the market’s opportunities are sided with challenges, such as regulations, limited grids and access to finance. Moreover, the fluctuating nature of solar and wind energy sources implies that investment has to be made in other areas of electric infrastructure and hence storage technologies. Nevertheless, the given challenges should not overshadow the fact that the renewables market in SEA remains promising, which will contribute to the energy security of the region, its economic development, as well as the achievement of environmental objectives and increase the significance of SEA in the process of transformation of the world’s energy mix. Recent developments include: February 2024: The French development agency, Agence Française de Développement, announced that it was seeking to engage individual regional or international specialists to form a panel of experts to provide technical assistance services for the development of the 1.2 GW Bac Ai pumped-storage hydropower plant in the Ninh Thuan province of Vietnam., January 2024: Nexif Ratch Energy Investments Pte. Ltd, an owner/operator of clean-energy power, acquired the 30 MW Minh Luong hydropower plant, a run-of-river facility with peak-hour storage in Lao Cai province, Vietnam. The acquisition contributes to strengthening the Nexif Ratch Energy portfolio’s growth path in renewables and will create a stable and recurring income through a long-term power purchase agreement.. Key drivers for this market are: 4., Increasing Investments in Renewable Energy Generation4.; Favorable Government Policies. Potential restraints include: 4., Initial Cost of Renewable Energy Is High. Notable trends are: Solar Energy Segment to Witness Significant Growth.

Renewable Energy Investment Market Outlook

The global renewable energy investment market size was valued at approximately USD 300 billion in 2023 and is projected to reach around USD 1,300 billion by 2032, exhibiting a CAGR of 17.4% during the forecast period. The rapid shift towards sustainable energy solutions and growing concerns about climate change are key growth factors driving this market. The increasing focus on reducing carbon footprints and promoting eco-friendly technologies is compelling governments and industries to invest heavily in renewable energy sources.

One of the primary growth factors for the renewable energy investment market is the growing awareness and acceptance of climate change and the immediate need to combat it. Governments around the world are implementing stringent regulations to reduce greenhouse gas emissions, thereby fostering a conducive environment for renewable energy investments. Subsidies, tax incentives, and grants are being increasingly provided to both corporations and individuals to encourage the adoption of renewable energy technologies.

Technological advancements are another significant growth driver in the renewable energy investment market. Continuous innovations in solar panels, wind turbines, and energy storage solutions are making renewable energy sources more efficient and cost-effective. For instance, the efficiency of solar panels has increased markedly over the past decade, reducing the cost per kilowatt-hour of solar energy. Similarly, advancements in wind turbine technology have lowered operation and maintenance costs, making wind energy more viable.

Additionally, the increasing investments from both public and private sectors are propelling market growth. Financial institutions, venture capitalists, and private equity firms are recognizing the long-term benefits and stability of investing in renewable energy projects. This influx of capital is facilitating the development of large-scale renewable energy projects, which in turn is boosting market growth. The rise of green bonds and other sustainable finance instruments is also playing a crucial role in attracting investments in the renewable energy sector.

The concept of Renewable Power is becoming increasingly central to the global energy discourse. As the world grapples with the challenges of climate change and environmental degradation, renewable power sources such as solar, wind, and hydropower are being recognized for their potential to provide clean, sustainable energy. Unlike traditional fossil fuels, renewable power sources are inexhaustible and have a minimal environmental footprint, making them a vital component of future energy strategies. The transition to renewable power is not only essential for reducing greenhouse gas emissions but also for ensuring energy security and fostering economic growth through the creation of green jobs and industries.

From a regional perspective, the Asia Pacific region is emerging as a significant player in the renewable energy investment market. Countries like China and India are investing heavily in renewable energy projects to meet their growing energy demands and reduce dependency on fossil fuels. North America and Europe are also witnessing substantial investments due to supportive government policies and increasing awareness about the benefits of renewable energy. However, regions like Africa and Latin America are showing promising growth potential due to untapped renewable energy resources and increasing foreign investments.

Energy Type Analysis

The renewable energy investment market can be segmented by energy type, including solar, wind, hydropower, biomass, geothermal, and others. Solar energy is one of the most significant segments in this market, primarily due to the decreasing cost of solar panels and the increasing efficiency of solar photovoltaic (PV) technology. The adoption of solar energy is not only driven by its environmental benefits but also by its economic viability, which is becoming more attractive with each passing year. Governments worldwide are also providing substantial subsidies and incentives for solar energy installations, further propelling this segment's growth.

Wind energy is another crucial segment within the renewable energy investment market. Technological advancements in wind turbine design and materials have significantly increased the efficiency and reduced the costs associated with wind energy production. Offsh

Regulatory Indicators for Sustainable Energy (RISE) is a comprehensive policy scorecard assessing the investment climate for sustainable energy and focusing on three key areas: energy access, energy efficiency and renewable energy. RISE covers 111 countries across the developed and developing worlds, which together represent over 90% of global population, GDP and energy consumption. With 28 indicators, 85 sub-indicators and 158 data points per country, RISE helps policy makers to understand how they are doing, compare across countries, learn from peer groups, and identify priority actions for the future. The source data and documents for 111 countries are available at http://rise.worldbank.org/library To learn more, please visit http://rise.worldbank.org/

The renewable energy market is experiencing robust growth, driven by increasing concerns about climate change, declining renewable energy technology costs, and supportive government policies globally. The market, while exhibiting regional variations, shows a consistently upward trajectory. While precise figures for market size and CAGR are absent from the provided data, a reasonable estimation, considering the rapid expansion of solar and wind power, would place the 2025 market size at approximately $1 trillion (USD), growing at a CAGR of around 8% during the forecast period (2025-2033). This growth is fueled by significant investments in solar photovoltaic (PV) and wind energy projects, coupled with the burgeoning adoption of other renewable sources like hydropower, geothermal, and biomass. Key drivers include ambitious national and international climate targets, the decreasing cost of energy storage solutions making renewables more reliable, and a growing awareness of renewable energy's environmental and economic benefits among consumers and businesses. Significant regional disparities exist within the renewable energy landscape. North America and Europe remain dominant markets, with substantial investments in large-scale renewable energy projects and supportive regulatory frameworks. However, the Asia-Pacific region is emerging as a key growth driver, fueled by rapid economic development and significant governmental initiatives to expand renewable energy capacity, particularly in countries like China and India. Challenges remain, including grid infrastructure limitations, intermittency issues with solar and wind power, and the need for further technological advancements in energy storage. However, ongoing innovations and supportive government policies are expected to mitigate these challenges and propel the market towards sustained growth throughout the forecast period. This will involve a diversification of applications, from large-scale power generation to decentralized solutions like rooftop solar and community wind projects, further contributing to the market’s expansion.

In 2022, the United States' investment in research and development in solar energy technologies reached 276.02 million euros. Germany and France followed with R&D investments of 83.99 and 79.49 million euros, respectively.

FOREWORD :

In 2013, New Zealand and the European Union co-hosted the Pacific Energy Summit to fast-track sustainable energy development in the Pacific. It resulted in funding commitments of more than $635 million for a range of innovative renewable energy projects, and showed that donors and the private sector were prepared to back the ambition and leadership shown by Pacific governments. Three years on and the change across the region has been marked. Whole atolls are now 100 per cent renewable, many more people have access to clean and reliable power, the amount of diesel imported for electricity generation has fallen dramatically, and Pacific countries can now better manage the impacts of climate change.

The Pacific is home to some of the countries most at risk from the effects of climate change. It is now also home to countries that are leading the world in reducing their fossil fuel consumption and shifting to renewable sources of electricity generation. We also acknowledge the huge contribution of donors and development partners in supporting Pacific governments to achieve progress and following through on the commitments made at the Summit. Enormous opportunities still exist across the region.

This publication presents the energy profiles of 18 Pacific countries and territories. It summarises their progress since the 2013 Summit and identifies new opportunities for investment.

Keywords: Pacific Energy Summit, Pacific Energy country profile, Pacific countries, New Zealand Ministry of Foreign Affairs and Trade (MFAT), European Union, Electricity, Renewable energy, Propose projects for investments.

The data has been sourced from the International Renewable Energy Agency (https://pxweb.irena.org/pxweb/en/IRENASTAT). The indicators on energy transition have been formulated to help users understand the progress in the adoption of renewable energy sources vis-à-vis the increasing energy requirements.Sources: International Renewable Energy Agency (IRENA) (2022), Renewable Energy Statistics 2022, https://pxweb.irena.org/pxweb/en/IRENASTAT; IMF Staff Calculations.Category: Mitigation,Transition to a Low-Carbon Economy Data series: Electricity GenerationElectricity Installed Capacity Metadata:Electricity generation: The gross electricity produced by electricity plants, combined heat and power plants (CHP) and the distribution generators measured at the output terminals of generation. It includes on-grid and off-grid generation, and it also includes the electricity self-consumed in energy industries; not only the electricity fed into the grid (net electricity generation). The indicator is expressed in the Dashboard in Gigawatt hours (GWh).Electricity Installed Capacity: The maximum active power that can be supplied continuously (i.e., throughout a prolonged period in a day with the whole plant running) at the point of outlet (i.e. after taking the power supplies for the station auxiliaries and allowing for the losses in those transformers considered integral to the station). This assumes no restriction of interconnection to the network. It does not include overload capacity that can only be sustained for a short period of time (e.g., internal combustion engines momentarily running above their rated capacity). For most countries and technologies, the data on installed capacity on the Dashboard reflects the capacity installed and connected at the end of the calendar year and are expressed in Mega Watts (MW). The renewable power capacity data shown in these tables represents the maximum net generating capacity of power plants and other installations that use renewable energy sources to produce electricity. For most countries and technologies, the data reflects the capacity installed and connected at the end of the calendar year. Pumped storage is included in total capacity but excluded from total generation. The capacity data are presented in megawatts (MW) and the generation data are presented in gigawatt-hours (GWh). All the data are rounded to the nearest one MW/GWh, with figures between zero and 0.5 shown as a 0.

Renewable Energy Market Outlook

The global market size for renewable energy is projected to grow significantly from an estimated $1.1 trillion in 2023 to over $2.5 trillion by 2032, reflecting a robust compound annual growth rate (CAGR) of 9.4%. This remarkable growth is fueled by increasing governmental support, advancements in renewable technologies, and the urgent necessity to mitigate climate change by reducing greenhouse gas emissions.

One of the primary growth drivers for the renewable energy market is the escalating concerns about climate change and the subsequent regulatory policies aimed at reducing carbon footprints. Countries worldwide are increasingly implementing stringent regulations and offering incentives to adopt renewable energy sources. This includes subsidies, tax benefits, and renewable energy credits that are designed to encourage both corporations and individuals to invest in cleaner energy alternatives. For instance, the European Union has set ambitious targets to achieve climate neutrality by 2050, thus significantly bolstering the demand for renewable energy across member states.

Technological advancements play a crucial role in the expansion of the renewable energy market. Innovations in photovoltaic cells, wind turbine efficiency, and battery storage technologies have drastically reduced the cost of renewable energy production, making it more competitive with traditional fossil fuels. For example, the cost of solar photovoltaic (PV) panels has decreased by approximately 80% in the last decade. These technological breakthroughs not only make renewable energy more accessible but also enhance its efficiency and reliability, which are critical factors for widespread adoption.

Investment from the private sector is another significant growth factor for the renewable energy market. Venture capitalists, private equity firms, and even large multinational corporations are increasingly seeing the potential for high returns in renewable energy investments. The entry of significant financial resources has accelerated the construction of large-scale renewable energy projects, ranging from solar farms to offshore wind parks. This influx of capital is crucial for meeting the rising global energy demands in a sustainable manner.

The role of a Renewable Energy Connector is becoming increasingly vital as the renewable energy market expands. These connectors serve as crucial links between various renewable energy systems, ensuring seamless integration and efficient energy transfer. As renewable energy sources like solar and wind become more prevalent, the need for robust and reliable connectors that can handle varying power loads and environmental conditions is paramount. These connectors not only facilitate the transmission of energy but also enhance the overall efficiency and reliability of renewable energy systems. With advancements in technology, modern connectors are designed to withstand harsh weather conditions and provide long-lasting performance, making them indispensable components in the renewable energy infrastructure.

Regionally, Asia-Pacific is expected to dominate the renewable energy market, driven by rapid industrialization, urbanization, and strong governmental initiatives. Countries like China and India are heavily investing in renewable energy infrastructure to combat pollution and meet their growing energy needs. North America and Europe also represent substantial markets due to well-established renewable energy policies and a high level of public awareness regarding environmental conservation.

Energy Type Analysis

The renewable energy market is segmented by various energy types including solar, wind, hydro, geothermal, biomass, and others. Solar energy has emerged as a leading segment owing to its versatility and declining costs. The global push towards solar energy can be attributed to technological advancements that have drastically lowered the cost of solar panels, making them affordable for both residential and commercial use. Additionally, government incentives and policies, such as feed-in tariffs and net metering, have further propelled the adoption of solar energy systems.

Wind energy, particularly from onshore and offshore installations, is another significant segment within the renewable energy market. Improved turbine technologies have enhanced the efficiency and output of wind energy projects. Countries with vast coastal areas, such as the United Stat

In 2021, investment in renewable energies in Latin America reached **** billion U.S. dollars. Brazil was by far the country that held the largest share of investments, particularly in the last three years. From 2019 to 2021, renewable investments in Brazil almost doubled, reaching **** billion U.S. dollars in the latter year. Meanwhile, investments in renewable energy in Mexico and Brazil stood at *** and *** billion U.S. dollars in 2021, respectively.

The Indonesia Renewable Energy Industry size was valued at USD XX Million in 2023 and is projected to reach USD XXX Million by 2032, exhibiting a CAGR of 21.44 % during the forecasts periods. The application of renewable energy in Indonesia is on the rise mainly because Indonesia is facing increasing demand for energy alongside the global challenges of climate change. Indonesia as a country naturally endow with considerable number of geothermal resources and solar, wind and hydro power potentials were also identified in the country. In the Indonesia’s National Energy Plan and the Nationally Determined Contributions (NDCs) the government set her targets to reduce Green House Gas Emission and to further enhance the percentage of renewable energy in the country’s energy generation capacity. There has been progress in geothermal projects especially because Indonesia is among the largest producer of geothermal powers. Besides, the level of solar and wind energy production is increasing with the help of such regulations as the feed-in tariff system and investment incentives for the development of private electricity generation. Some observable projects include the Cirata Floating Solar Power Plant which demonstrates Indonesia’s focus on unique and mass deployable renewable technology. However, there are challenges that are still observed in the Indonesian renewable energy industry: regulatory challenges that may include policy and regulatory frameworks, funding and financial strategies, and infrastructure issues chief among them being the availability of infrastructure particular in the outskirt regions. The key discrepancy is the intrinsic synergistic relationship between the solutions and the dependence on solar and wind electricity and its intermittency thus requiring the enhancement in the grid stability and storage solutions. However, if policies are maintained and travelled, investment and Technology the Indonesian country has potential to develop its renewable energy sector thus help to nurture sustainable development and energy security. Recent developments include: June 2023: SEG Solar (SEG) and PT Kawasan Industri Terpadu Batang (KITB) have announced they have entered into a binding agreement for the lease of approximately 41 hectares of land located in the Batang Regency, Central Java, Indonesia. Through PT SEG ATW Solar Manufaktur Indonesia, a joint-venture project company, SEG intends to invest USD 500 million in developing the land to construct a 5GW solar cell manufacturing facility and a 3GW solar module manufacturing facility. To assist with developing local facilities in Indonesia, SEG has partnered with PT ATW Investasi Selaras (ATW Group)., December 2022: PT Bukit Asam Tbk(PTBA), a leading coal mining services provider in the country, collaborated with the Ministry for Maritime Affairs and Investment and Forest and Environmental Management of the ministry to develop a pilot biomass project in South Sumatra. The government expected this project to align with the greenhouse emission reduction targets and mangrove rehabilitation projects.. Key drivers for this market are: 4., Immense Potential in Renewable sector due to Natural Landscape of the country4.; Supportive Government Policies and Initiatives. Potential restraints include: 4., Rising Adoption of Alternate Clean Power Sources. Notable trends are: Solar Energy Is Expected to Witness Significant Growth.

About the Project This paper draws on KAPSARC’s energy productivity work focused on how shifting to a growth model based around higher energy productivity can benefit Saudi Arabia and the countries of the Gulf Cooperation Council. Energy productivity is both a policy agenda focusing on how energy can best be used to create value in the economy, and an indicator which integrates economic growth with energy consumption. At the macroeconomic level, energy productivity describes how much GDP can be produced using an amount of energy. It is the mathematical inverse of energy intensity and is both a reflection of what activities energy is used for (the structural make-up for the economy), and how well energy is used in specific activities (the level of energy efficiency). At the microeconomic level energy productivity focuses on how much revenue is produced from economic activities per unit of energy consumption. This is related but distinct from energy efficiency which focuses on how much physical output is produced per unit of energy consumption. KAPSARC has partnered with UNESCWA to explore the energy productivity potential of Saudi Arabia and the countries of the Gulf Cooperation Council and will release a synthesis report of this work later in 2017. Key Points A common priority across G20 countries is the need to reinvigorate economies through an economic transformation that delivers a higher level of better quality growth. At KAPSARC, the need to improve economic growth and deliver climate goals agreed at COP21 in Paris is being investigated using an energy productivity framework, or how greater value can be obtained from the energy system for each unit of energy consumed. Energy productivity is an economic planning tool that is increasingly being used in G20 countries to help achieve sustainable development goals. Its key elements are structural change towards higher value added economic activities and improving energy efficiency. A focus on lifting productivity across the economy aligns naturally with the need to lift overall economic productivity, which is the main long-term driver of growth. Faced with the current extended period of weak international growth and low commodity prices, Saudi Arabia has intensified diversification efforts aimed at more sustained and sustainable economic development. Key elements of the diversification strategy involve boosting private sector investment and improving business conditions; a significant fiscal stimulus to households and industry; increasing energy prices to help diversify government revenue and support structural change and energy efficiency in the economy; and increasing the share of renewable energy in the energy mix. Such pro-growth measures to realign the Saudi economy towards a higher-value added, more energy efficient economy will lift the Kingdom’s energy productivity and contribute to achieving its Nationally Determined Commitment to avoid 130 million tons of CO2-e as set out at COP21 in Paris.

The Alternative Energy industry in China is engaged in power generation via wind, geothermal, solar, tidal and biomass energy, and other new energy sources. Industry revenue is expected to grow steadily at an annualized 16.8% over the five years through 2024, to reach $126.4 billion. This includes expected growth of 11.2% in the current year. The primary industry drivers are increasing domestic demand, increasing environmental consciousness and heavy government assistance.Industry profitability growth benefits from upstream equipment manufacturing technology improvement and growing electricity consumption. Profit is expected to make up 31.2% of total industry revenue in 2024, up from 29.5% in 2019.The Chinese government has made the development of new energy generation methods a priority, in response to climate change and in pursuit of energy savings and emissions reduction. The Kyoto Protocol also stimulates new energy development in China through clean development mechanisms (CDMs). Since its implementation in February 2005, more economically developed countries have been investing in new energy projects in developing countries in exchange for certified emission reductions (CERs). As a major developing country, China has received significant investment for new energy projects, which has benefited the industry.Over the next five years, industry revenue is forecast to increase at an average annualized rate of 8.0%, to total $185.7 billion in 2029. The number and scope of wind, solar, biomass and biogas energy generation projects are all projected to increase over the period. In addition, more economically developed countries will likely increasingly invest in new energy projects in China to purchase CERs, which is expected to boost industry performance.

One of the actions taken to mitigate the climate change is research, development and demonstration (RD&D) investments in renewable energy (RE) technology. In addition to domestic RD&D spending, the import of foreign technologies, as a main channel of technology transfer, is another option to obtain higher share of renewable energies in order to achieve climate objectives. In this study, a panel dataset of 28 OECD member countries from 2011 to 2020 is analyzed, using the OLS, fixed-effects, and two-step system GMM methods, to assess the impacts of public spending on renewable energy RD&D (RERD) and the import of renewable energy technologies on the energy-related CO2 emissions. To fully capture the significant regional differences, the 28 countries are re-divided into four regions in accordance with their renewable energy RD&D investment level and total CO2 emissions. This study uniquely investigates the impact of RERD and importation–as an alternative channel for obtaining renewable energy technologies–on energy-related CO2 emissions in OECD countries, while also analyzing regional differences to inform targeted local policies. The findings reveal that CO2 emission is significantly and negatively affected by renewable energy imports, for the full panel as well as for Low-RERD and Low-Emission regions. Furthermore, only in High-RERD and High-Emission regions can renewable energy RD&D decrease CO2 emissions. Accordingly, some policy implications are recommended concerning investments in renewable energy RD&D and renewables import.