Renewable Energy 2024

Introduction

The global renewable energy sector has seen rapid growth over the past few years. As the world transitions towards more sustainable energy systems, legal and regulatory frameworks are evolving to facilitate and govern renewable energy markets. Global commitments to combat climate change, reduce greenhouse gas emissions, and meet net-zero goals by mid-century are pushing governments, industries, and regulatory bodies to adapt quickly. These changes range from policy reforms that incentivise investment in renewable energy sources, to legal frameworks governing production, trade and supply, grid integration, energy storage and emerging technologies like green hydrogen.

In addition to environmental and sustainability goals, renewable energy investments also contribute to energy security and resilience, reducing reliance on imported fossil fuels in times of geopolitical tensions and mitigating the economic volatility associated with fluctuations in oil and gas prices. This has become especially evident in recent years, as supply chain disruptions following the war in Ukraine and the resulting energy crisis have highlighted the vulnerabilities of global fossil fuel supply networks.

Global Commitments and Policies

International co-operation has been key to driving the renewable energy agenda. The Paris Agreement, signed in 2015, remains evidence of a landmark global effort to limit global warming to well below 2°C above pre-industrial levels. This has significantly influenced global renewable energy targets over the past decade, pushing nations to adopt more aggressive policies and timelines for decarbonisation.

The European Union’s “European Green Deal” aims for the EU to become carbon-neutral by 2050, with intermediate goals for cutting emissions by 55% by 2030. Similarly, the Biden Administration in the United States rejoined the Paris Agreement in early 2021 and set a target for the US to reach net-zero emissions by 2050. Countries like China, India, and Japan have also made pledges to ramp up their renewable energy capacity, recognising both environmental imperatives and the economic potential of leadership in clean technologies.

Beyond global and national policies, cities and local governments are taking charge of the renewable energy transition. Municipalities worldwide are committing to 100% renewable energy targets, adopting localised energy strategies that emphasise distributed renewable energy systems like rooftop solar and community wind projects.

Innovations and Investments

One of the most significant developments in the renewable energy sector over the past ten years has been the dramatic reduction in the costs of key renewable energy technologies, particularly solar photovoltaic (PV) and wind power. This cost reduction has been driven by a combination of factors, including improvements in technology, economies of scale, and increased competition in global supply chains.

Global investment in renewable energy was estimated at over USD500 billion in 2023, a record high, reflecting the growing recognition of the sector’s economic potential. Institutional investors, including pension funds and sovereign wealth funds, continue to move away from fossil fuel investments and toward clean energy. Solar and wind projects dominate, but emerging sectors like green hydrogen and energy storage are attracting an increasing influx of capital.

According to the International Renewable Energy Agency (IRENA), the renewable energy sector employed about 14 million people globally in 2023, which figure is expected to rise significantly in the coming years. Job creation in renewable energy spans a wide range of activities, from the manufacturing of solar panels and wind turbines to the installation and maintenance of energy infrastructure, as well as (project) finance, legal and other professional services.

Major corporations are also playing an important role in driving demand for renewable energy. Companies like Google, Amazon, and Microsoft have made significant commitments to power their global operations entirely with renewable energy, often entering into corporate power purchase agreements (PPAs) with renewable energy developers. This trend has accelerated the deployment of new renewable energy projects and increased the demand for innovative legal and financing structures, not only for wind and solar, but other types of renewable energy as well.

Wind Energy

Wind energy continues to be a major player in the renewable energy mix, with onshore and offshore wind farms providing substantial amounts of clean electricity. Onshore wind has become one of the most cost-competitive forms of new energy generation, while offshore wind is emerging as a crucial component of the energy transition, particularly in countries with limited land availability or high population density.

Offshore wind, in particular, is seeing a surge in activity. The potential for offshore wind is immense, with strong and consistent wind speeds available at sea and the ability to deploy large turbines in deep waters. Floating offshore wind technology, which allows turbines to be anchored in deeper waters far from shore, is opening up new areas for wind energy development, further expanding the potential of this resource. Developers for large offshore wind projects are often selected via (public) tenders, in which not only the (lowest) offered electricity price plays a role, but environmental and technical considerations are also taken into account.

Solar Power

Among the renewable energy sources, solar power has emerged as the fastest growing and most widely adopted technology. Global solar PV capacity has seen exponential growth, driven by both utility-scale projects and distributed solar installations, such as rooftop solar systems for homes and businesses. By 2023, solar energy accounted for more than 25% of the global renewable energy generation, due to its scalability and flexibility.

The adoption of solar power is not limited to developed economies. Developing countries, particularly in regions with high solar potential such as Africa, South Asia, and Latin America, are increasingly harnessing solar energy to expand access to electricity. Off-grid solar solutions, often paired with battery storage, are providing reliable power to remote areas that are not connected to the central grid, helping to increase energy independence and improve living standards.

Other Types of Renewables

In addition to the more traditional wind and solar projects, investments in a range of other renewable energy technologies are also growing. Among these, sustainable heat projects, biofuels and hydrogen are playing increasingly important roles.

Sustainable heat solutions are crucial for decarbonising homes and businesses. In Europe and North America, there has been a strong push toward district heating systems powered by renewable energy sources, such as geothermal energy, biomass and solar thermal technology. Heating systems are also increasingly using excess heat from industries, waste incineration, and data centres to provide recycled heat to cities. Meanwhile, legislatures are implementing regulation for heat networks and heat tariffs, to protect consumers from monopolistic behaviour by heat companies and to ensure fair prices.

Biofuels are emerging as a solution to decarbonise the transportation sector, particularly in aviation and shipping, where electrification is more challenging. Biofuels derived from organic materials such as agricultural waste, algae, and even municipal waste are being scaled up worldwide to provide cleaner alternatives to fossil fuels. To stimulate further development of biofuels, legislatures are introducing mandatory admixture requirements for energy companies.

Hydrogen is often seen as the cornerstone of future energy systems, particularly for sectors that are difficult to decarbonise, such as heavy industry, long-haul transportation, and power storage. The global hydrogen economy is rapidly expanding, with governments and companies investing heavily in both green hydrogen (produced using renewable energy) and blue hydrogen (produced from natural gas with carbon capture and storage). Europe has positioned itself as a leader in hydrogen development. The European Union’s Hydrogen Strategy, part of the broader European Green Deal, aims to produce 10 million tons of green hydrogen by 2030. Meanwhile, legislatures and regulators are struggling with designing the appropriate legal and regulatory framework to accommodate hydrogen in the energy system.

Grid Integration and Energy Storage

The integration of electricity from renewable energy sources into the power grid has brought with it the challenge of balancing supply and demand, given the intermittent nature of especially solar and wind power. Energy storage, particularly battery storage, has emerged as a critical solution to this challenge. Large-scale battery storage systems are now being deployed alongside renewable energy plants, enabling excess energy to be stored during periods of high generation and released when demand peaks or when renewable generation is low. Flexible power-to-gas installations, using electrolysis to produce hydrogen, are also seen as significant peak shaving solutions.

In many countries, renewable energy markets are challenged by congestion on the electricity grids. The current speed of grid capacity expansion is often insufficient. Therefore, regulators and grid operators are implementing measures to regulate congestion, but market players regularly have to resort to curtailment.

In addition to grid expansion, grid modernisation plays an important role. Smart grids, which use digital technology to monitor and manage electricity flows in real-time, are helping to improve the efficiency and reliability of electricity distribution. By integrating renewable energy sources, battery storage, and demand response systems, smart grids are enabling a more flexible and resilient energy system.

Moreover, advances in energy storage are not limited to batteries, but also include hydrogen. In addition, technologies like pumped hydro storage, which stores energy by moving water between reservoirs at different elevations, and thermal energy storage, which stores heat or cold, are also gaining traction as viable options for balancing renewable energy supply and demand.

Conclusion

The global renewable energy sector is undergoing a period of unprecedented growth and transformation, driven by economic instabilities, geopolitics and the urgent need to address climate change. Solar, wind, and energy storage technologies are at the forefront of this transformation, offering scalable, cost-effective, and increasingly reliable alternatives to fossil fuels.

While challenges remain – particularly in areas like intermittency and grid integration – ongoing technological advances and supportive policies are making renewable energy more competitive and accessible. As countries and companies continue to invest in renewables, the global energy landscape is shifting toward a cleaner, more sustainable future, with significant implications for the economy, society, and the environment. The pace of progress in sustainable energy is reshaping energy markets, also requiring specialist legal expertise. This Chambers Global Practice Guide aims to be a useful resource for legal counsel and practitioners active in the exciting field of renewable energy.