An overview of the Renewable Energy Industry
April 19th, 2021
Since climate change became a main concern, the renewable energy industry started to boom. A 224% growth has been registered since 2004 as the global installed capacity passed from 800 GW to 2.588 GW in 2019. Nowadays renewables stand among the biggest and most profitable industries worldwide. To understand its relevance, we compared renewables to pharmaceutical, fossil fuels, and Information and Communication Technologies (ICT) in four main dimensions: CO2 emissions, market size, growth, and employment.
Because the boom of renewables has to do with climate change, we compared how these four industries contribute to CO2 emissions. There are 33.1 billion metric tons of CO2 in the atmosphere, equivalent to 12.710 billion square meters, or 33.1 billion houses of 384 m2 each. It is known that the energy industry releases the most emissions with 44.3% (Tiseo, 2021) of the global share, followed by pharmaceutical (5%), ICT (1.4%), and renewables (1%). In 2019, the pharmaceutical industry was highly criticized due to published reports revealing that the pharma market was 28% smaller yet 13% more polluting than the automotive sector (Belkhir, 2019), in fact only a few pharmaceuticals dare to communicate their CO2 footprint.
Regarding market size and growth, ranking as one of the largest industries worldwide, ICT is forecasted to reach a size of around 6.700 billion by 2025, with a decelerated growth of 5% compound annual growth rate (CAGR) in the next years. Renewables, fossil fuels, and pharma achieve the subsequent positions in the ranking with a forecast of 1.512, 1.157, and 702 billion in 2025 and a CAGR of 6.1%, 5.7%, and 13.7% respectively. Though pharmaceutical registers higher growth than renewables, according to the American magazine Vox, in 2017 clean energies including the value chain of renewables, manufacture, and advanced infrastructure was as big as the pharmaceutical in the US. About fossil fuels which contribute the most to global warming, its growth should decelerate the most, but paradoxically it will grow even more than the ICT.
Sometimes bigger industries hire a higher number of employees, in this case, the ICT is the biggest employer with 55.3 million people in 2020. What seems to be different is that though the market size of renewables is bigger than fossil fuels, it employs less than half the population (11.5 million) that fossil fuels do (28 million). The energy transition indeed involves a change in job profiles to allow a smooth shift from fossil fuels to renewables, but there’s a long road. In 2050 renewables are expected to employ over 42 million employees (IRENA, 2020), among the 100 million jobs that the whole energy industry forecasts. As for pharmaceutical employs the least numberof employees accounting for 5 million in 2020.
Price reduction and more massive technological developments in the renewable energy industry make it cheaper and accessible. In the upcoming years, huge investments must be made to achieve the Paris Agreement and Green Deal objectives. Renewable energy is becoming one of the most relevant industries not only by its economic impact but the contribution it makes to avoid worsening climate change, with it, new technologies will be developed, new job positions and profiles will appear, and better chances for the future generations well-being will emerge.
- Tiseo, 2021. Share of global carbon dioxide (CO2) emissions from fossil fuels and cement as of 2020, by economic sector. Statista. Retrieved from: https://www.statista.com/statistics/1129656/global-share-of-co2-emissions-from-fossil-fuel-and-cement/
- Belkhir, 2019. Big Pharma emits more greenhouse gases than the automotive industry. McMaster University. Retrieved from: https://brighterworld.mcmaster.ca/articles/big-pharma-emits-more-greenhouse-gases-than-the-automotive-industry/
- IRENA. September 29th, 2020. Renewable Energy Jobs Continue Growth to 11.5 million worldwide. Retreived from: https://www.irena.org/newsroom/pressreleases/2020/Sep/Renewable-Energy-Jobs-Continue-Growth-to-11-5-Million-Worldwide
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- Statista. February 23rd, 2021. Global ICT market share by country 2013 -2021. Retrieved from: https://www.statista.com/statistics/263801/global-market-share-held-by-selected-countries-in-the-ict-market/
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