Role of Key Economies in Global Clean Energy Transition

The concept of Clean energy has gained a significant importance in the last 10 years as the world is experiencing extreme temperatures, drought, environmental pollution and significant fluctuations in petroleum prices specially during and after Covid-19 pandemic. The global clean energy transition is the only possible solution for reaching Net Zero emissions by 2050 and protecting the climate and our natural world.

As the Paris Agreement has developed a vision to limiting global heating to 1.5 degrees Celsius and preventing the worst climate impacts, more and more efforts are being made globally to achieve the target.

Global transition towards clean energy is now becoming worldwide movement to shift from fossil fuels like coal, oil, and gas to renewable energy sources such as solar, wind, hydro, geothermal, and biomass, aiming to significantly reduce greenhouse gas emissions and mitigate climate change.

This transition covers increased investments in renewable energy instead of fossil fuels, energy efficiency, energy storage, technological advancements, energy security and cost effectiveness.

Here in this study we will share the role of key economies in meeting above challenges and build a green, clean and livable earth.

You can also go through a detailed study on emerging trends and technological challenges in transition towards green energy in our blog.

A. Role of United States in Developing Alternate Energy Resources

There has been a good deal of momentum over the last few years in record-breaking Electric Vehicles EV sales and new energy capacity dominated by renewables and recycling. In many ways, 2023-24 were record-breaking years for clean energy deployment in the United States, more specifically in electricity generation, decarboniing the industrial sector, controlling plastic pollution, escalating installations of solar and energy storage, growing sales of EVs and development of recycling facilities.

You can study an in-depth study on plastic pollution and its possible solutions in our blog.

US Developments in Solar Energy Sector

According to Solar Energy Industries Association, a record 40.1 gigawatts (GW) of solar energy capacity was installed in the U.S. in 2024. Even with significant project delays in due to supply chain issues in some cases and certain other factors, solar was the fastest-growing power source in the U.S. Installed solar capacity in the U.S. currently totals 219.8 GW, a 7% of the total US electrical generation in 2024.

Like in 2024, energy storage sector also grew substantially and is also growing rapidly. Strong growth is expected to continue ahead with significant challenges of technology integration and search of more efficient and easily available metals used in battery production. Despite considerable growth, renewable energy installations are expected to ramp up even faster with a prospect of achieving 100% carbon-free electricity by 2035.

The Emerging Electric vehicles Market

A record 1.3 million EVs were sold in the U.S. in 2024 and these sales are likely to continue to be strong in future. Owing to increased fuel costs and durability of the vehicles, electric vehicles are considered more durable in terms of maintenance and economic in terms of fueling.  EV market is growing rapidly and more than 3.3 million EVs are running on US roads currently. Moreover, EV charging infrastructure is also developing.

Offshore Wind Power Generation in US

Offshore wind power generation challenges have been particularly critical in last few years. Although many projects were cancelled in 2023 due to rising costs and supply chain challenges, a 14.5GW of offshore wind is expected to come online in the U.S. by 2030.

A significant growth in demand of electricity for data centers, artificial intelligence, crypto mining, manufacturing and EVs is creating serious concerns about existing power generation ability to match with future demands as the grid planners have nearly doubled forecasts of electricity demand growth over the next five years. A significant fast growth of these demand drivers is becoming challenging for achieving a transition to clean energy. The existing potential imbalance between supply and demand now requires increased attention by government, large energy users and grid operators.

B. Significance of Chinese Solar Panels, EVs & Battery Metals Extraction Market

China’s electricity demand is becoming a key focal point in the global fight against climate change. The country’s adoption of clean energy technology has created hope that it will start reducing greenhouse gases far earlier than its stated goal of 2030.

Growing power demand in China may affect efforts to decarbonize the power sector, which accounts for nearly half of the country’s greenhouse gas emissions. Even after record additions of wind turbines and solar panels, clean power generation does not meet current demand resultantly putting more reliance on fossil fuels.

Similarly, in the industrial sector which accounts for about two-third of China’s electricity consumption, steel and cement production, production of materials like copper, aluminum and petrochemicals hit record highs last year using increasing amounts of energy.

Electric Vehicles Manufacturing and EV Charging Sector

China is one of the fastest growing EV markets in the world. There are an estimated 500 electric car manufacturers having piled into the world's largest vehicle market. A new industry report shows domestic sales of all types of electric vehicles rose by 40% in 2024 while sales of gasoline powered cars tumbled, including imports.

In 2024, a total of 31.4 million vehicles were sold in the world’s largest automobile market, according to the China Association of Automobile Manufacturers.

Please study our detailed blog about how renewable energy supports global Electric Vehicles market.

Additionally, while EV charging is putting more stress on the renewable power systems, it is reducing reliance on fossil fuels in recent years. Electric Vehicles have proven to be more efficient than those powered by gasoline or diesel engines and need of EV charging has grown rapidly.

China – A Leading Producer of Solar Panels

China currently dominates the global solar panel market, producing over 80% of the world's solar panels production, making it the largest manufacturer of solar panels globally.

China has made substantial investment in manufacturing capacity across the entire solar panel production chain, leading to highly competitive prices and making them a key player in the global clean energy transition and currently a majority of solar panels exported worldwide originate from China.

China produces the majority of solar panel components, including polysilicon, wafers, cells, and modules, giving it a significant advantage in the global market. The country exports large volumes of solar panels at competitive prices and played a major role in accelerating the adoption of solar power globally in last few years making a significant contribution towards clean energy transition.

Figure 1Solar Park, Tianjin, North China

Extraction of Metals for Battery Production

In contrast with Electric vehicle market, China also holds a dominant position in the extraction and processing of battery metals, particularly lithium, cobalt, nickel, and graphite, thus control a large portion of the global supply chain for these critical minerals used in batteries.

Despite of the fact that China does not actually have the largest reserves of these metals, they have dominated the market largely due to significant investments in refining and processing capacity, through imports of raw materials and refining them domestically.

China is now the largest market or largest producer for all the main minerals needed to build a typical electric car battery including graphite, copper, nickel, manganese, cobalt, lithium, and rare earth elements (REEs).

C. Germany’s Plan to Support Renewable Expansion

The share of renewable electricity generation in Germany is around 57 percent of the country's gross electricity consumption in the year 2024. To drive down costs and make the most of the rising share of clean and cheap electricity, Germany is also finding ways to ensure that future renewable installations benefit the overall electricity system, while also making it more flexible and able to cope with more renewables.

Why Germany Needs Support for Renewables

Germany plans to ensure enough investment in renewables in the future to meet climate safety targets by covering 80 percent of power consumption with renewables, and to secure more cheap electricity. In connection with Paris Agreement, huge amounts of renewable capacity will be needed for Germany and Europe to power their economies in a climate-neutral way.

D. India‘s Role as the Fastest Growing Economy

India is the fastest-growing economy, showing a consistent and impressive growth rates of 7% and 8.2% in FY23 and FY24, respectively and is ambitious to achieve the status of a developed nation by 2047. At the same time, it also recognizes the dual challenge and opportunity posed by rising global temperatures and climate risks, making significant strides in new energy sectors to foster sustainable development.

India's Progress in Renewable Energy

Akthough, fossil fuels have dominated India’s energy sector, but the commitment to derive 50% of electricity from non-fossil sources by 2030 signals a transformative shift. India currently ranks fourth globally in renewable energy installed capacity and wind power capacity and fifth in solar power capacity. With its geographical advantage of 300 sunny days annually, India can generate substantial amount of electricity per year from solar power. The country’s solar energy sector has grown significantly over last 10 years.

India’s clean energy sectors, solar, wind, green hydrogen, electric vehicles (EVs), and battery energy storage systems have seen robust investment activity in last few years. In solar, over $2 billion has been raised for residential rooftop installations since 2015. Wind and solar energy along with green hydrogen and biogas projects are expected to support India’s share in clean energy production significantly.

India's energy transition presents vast opportunities, supported by strong economic incentives, government commitment, technological progress and growing investor interests. With strong progress across renewable energy sectors and innovative financing mechanisms, the country is well-positioned to potentially achieve net zero ahead of its 2070 target.