Research by Ibrahim (Ibby) Rana and Eric Njoroge
Green Energy Infrastructure
The best chance we have at building a sustainable and fair future is to invest in green energy infrastructure
Introduction
- The world is facing an increasing energy demand, while the negative impacts of traditional energy sources on the environment and climate change are becoming more evident. Therefore, it is critical to shift towards renewable energy sources to meet energy demands while reducing greenhouse gas emissions.
- As a source of energy, green energy often comes from renewable energy technologies such as solar energy, wind power, geothermal energy, biomass, and hydroelectric power. To be deemed green energy, a resource cannot produce pollution, such as is found with fossil fuels. This means that not all sources used by the renewable energy industry are green
According to one definition, “green infrastructure” is “a strategically planned network of natural and semi-natural areas with other environmental features, designed and managed to deliver a wide range of ecosystem services, while also enhancing biodiversity.” For instance, providing better air quality, creating recreational spaces, and assisting with climate mitigation and adaptation are some examples of these services. The state and connectedness of natural regions, as well as the health and standard of living of the populace, are all improved by this network of green (land) and blue (water) places. Creating green infrastructure can also help the green economy by generating jobs.
Green energy is important for the environment as it replaces the negative effects of fossil fuels with more environmentally friendly alternatives. Even when the full life cycle of a green energy source is taken into consideration, it releases far fewer greenhouse gases than fossil fuels. It can also lead to stable energy prices as these sources are typically produced locally and are not affected by geopolitical crises, price spikes, or supply chain disruptions.
Overview of Green Energy Infrastructure
The globally renewable energy industry was assessed at USD 1.1 trillion in 2022, with a compound annual growth rate (CAGR) of 16.9% expected from 2023 to 2030.
The global renewable energy market size and growth
The global renewable energy market was valued at USD 768.9 billion in 2021 and is projected to grow at a compound annual growth rate (CAGR) of 16.6% from 2022 to 2030. The energy generation market has witnessed growth in terms of the installed capacity of renewable sources in the past few years on account of growing environmental concerns coupled with pressure to reduce the harmful effects of greenhouse gases. (Renewable Energy Market Size, Share, and Growth Report, 2030,n.d.) This has been a major factor in the expansion of the solar and wind energy sectors.
Investment trends and policies supporting the growth of green energy infrastructure
- In 2020, the hydroelectric power segment was the largest revenue generator, and it is anticipated to grow at a CAGR of 6.5% during the forecast period. Renewable Energy Market, by End Use The residential segment acquired the top position in the global market in 2020, and it is anticipated to grow at a CAGR of 8.4% during the forecast period. (Chidanand et al., n.d.)
- The total renewable energy installed capacity in 2020 was 535 GW, as per the European Commission, out of which 133 GW was from solar, 216 GW from wind, 134 GW from hydro, and 52 GW from bioenergy. The European Union has set a target to achieve 50% of its electricity consumption from renewable energy sources by 2030, out of which solar and wind energy will be major contributors. The large-scale integration of renewables is expected to be driven by increased interconnection capacity, and innovation in energy storage systems (“Push for Renewables,” 2022)
- Global investment in green energy infrastructure has been steadily increasing in recent years, with significant growth seen in both developed and developing countries. According to the International Energy Agency (IEA), renewable energy investments in 2021 will reach $303.5 billion, representing an increase of 2% compared to the previous year. The growth was mainly driven by the expansion of solar, and wind energy technologies, with China, the United States, and Europe being the leading investors.
Future Outlook and Recommendations
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