Throughout history, countries and regions have met varying portions of their energy needs with renewable energy sources. Renewables derived from the sun, water and wind long provided the backbone of energy supply to feed livestock used to transport goods, power sawmills, pump water and grind grain.1 Until relatively recently, humans relied almost exclusively on locally harvested biomass resources (mainly firewood) to meet heating needs, and still today these resources play a dominant role in the energy mix of many countries, particularly in sub-Saharan Africa.2

In the late 19th and early 20th centuries, industries frequently powered their operations using hydroelectricity generated from nearby rivers and streams; even now, many regions of the world continue to meet the bulk of their electricity needs with hydropower.3 The dominance of renewables in human energy use started to change, however, as fossil fuels in the form of coal, oil, and gas were harvested in growing quantities, making renewable-based energy systems the exception in much of the world.

More recently, many regions of the world have started to re-invent renewable energy systems, propelled by improvements and cost reductions in technologies such as wind power and solar photovoltaics (PV), combined with the urgency to rapidly reduce carbon emissions.4 While no examples exist of fully renewable-based energy systems that span the electricity, heating, cooling, and transport sectors, the foundations of such systems are now being laid, including the technologies, infrastructure and markets.5 ( See Sidebar 8.)

Due in part to declining renewable power costs, the share of variable renewable energy (VRE) sources in the global electricity mix has grown rapidly, exceeding 10% for the first time in 2021.6 Some countries have seen far higher shares. Variable renewables such as wind and solar power accounted for more than 30% of electricity production in Denmark (53%), Uruguay (35%), Spain (32%), Portugal (32%) and Ireland (31%) in 2021.7 ( See Figure 60.) These countries and others achieved even higher daily maximum levels of VRE penetration, with generation exceeding 40% of consumer demand.8

Several factors are converging to make energy systems based on renewable energy (particularly variable renewables) possible.

First, several different forms of energy storage are either already mature (such as pumped storage) or becoming less expensive and rapidly expanding (such as battery storage technologies). Other emerging storage technologies include mechanical and gravitational storage, chemical storage (including the production of hydrogeni or of synthetic fuels such as methanol) and thermal storage, providing more options for better balancing the fluctuations of VRE sources.

Second, industry and market players are starting to expand sector coupling. This refers to greater integration between the electricity, heating, cooling, and transport sectors, largely through electrification and the production of renewable fuels. Sector coupling is making it possible to meet energy needs that previously were supplied by fossil fuels – such as heating and transport – with supply from cleaner alternatives like renewable electricity, thereby increasing the share of renewables in the energy mix.

Third, demand response is becoming an important accelerator of energy system transformation across all sectors of energy use. It is being facilitated by the rise of digital technologies, low-cost data measurement and transmission, and a widening array of smart appliances such as controllable thermostats and electric heat pumps.9 Demand response – whether from households, institutional buildings, businesses or industries – is making energy demand more flexible, responding in real-time to system constraints (including congestion, undersupply and oversupply) as well as to price signals.

Finally, energy systems integration is being facilitated by the expansion of transmission and distribution networks, including transmission grids, district heating and cooling networks, and pipelines to facilitate the transmission of green gases such as ammonia and synthetic methane.10 It also is being supported by ongoing improvements in forecasting.

As these changes gain momentum, the transition to a fully renewable-based energy system is entering a dynamic new phase. As in past years, progress towards renewables in 2021 occurred largely in the power sector, although the pace of change in the heating and transport sectors has picked up as sector coupling spreads. Advancements in the power sector also have helped accelerate change in other sectors, fuelling growth in a range of applications including the electrification of heating and transport and the production of renewable fuels from electricity.


Note: Figure shows countries among the top 10 according to the best available data at the time of publication. Several smaller countries with low total generation and/or high imports are excluded from this list.

Maximum penetration refers to the maximum daily share of production from variable renewable electricity divided by daily electrical load.

Source: See endnote 7 for this chapter.

Examples of 100% (or near-100%) renewables in the power sector are relatively widespread: during the second half of 2020 and early 2021, Costa Rica met its electricity demand for an uninterrupted 300 days entirely with renewable electricity sources, mainly hydropower (80-85%) and geothermal (roughly 12%), with a small share of wind power.11 The province of Quebec (Canada) supplies more than 100% of its electricity needs with hydropower and a few large wind power projects, exporting its surplus to neighbouring jurisdictions in the United States and Canada.12 Paraguay supplements its hydropower-based electricity mix with a small contribution from biomass, and Iceland meets virtually all its electricity needs with a combination of hydropower and geothermal energy.13 In 2020, Scotland met just under 100% of its gross electricity demand almost exclusively from wind power.14

Three states or countries – South Australia, Scotland and Denmark – had met more than


of their total electricity demand with wind and solar as of April 2022.

Shares exceeding 100% renewables have been achieved elsewhere in the world, with a growing number of jurisdictions now regularly generating surplus renewable electricity. Several options are available to deal with this surplus: export it to neighbouring regions; convert it to another form of energy (such as thermal storage, battery storage or synthetic fuels); activate residential, commercial or industrial demand to soak up the surplus; or curtail it. In the US state of Hawaii, solar power has exceeded daytime electricity demand on parts of the electric grid since 2016, requiring the surplus power to flow to other areas of the network; this trend that has led to tighter rules on customers investing in solar PV and to surging investment in battery storage.15 ( See Snapshot: Hawaii.)

The entire state of South Australia was powered by renewable electricity for an uninterrupted 156 hours in the final weeks of 2021, supplied primarily by wind and rooftop solar power.16 ( See Figure 61 and Snapshot: South Australia.) To reduce curtailment and make greater use of its renewable electricity supply, South Australia is scaling up efforts to encourage both demand response and storage, while the network operator is expanding its interconnections with neighbouring states so that it can export more of its surplus electricity.17 In 2018, Qinghai Province in China operated fully on renewable electricity for nine days in a row (216 hours), due in part to the development of a communication platform that monitors renewable energy generation in real-time and co-ordinates it with data on power consumption.18

Historically, high shares of renewables have been most common in regions with abundant hydropower potential.19 However, the rise of increasingly cost-effective energy storage combined with greater demand-side flexibility and the expansion of grid infrastructure is making it possible for regions with widely differing resource endowments to transition to fully renewable-based energy systems.20


Source: See endnote 16 for this chapter.


Snapshot. South Australia

Solar Sponge Tariff

As renewables start supplying larger portions of the electricity mix, cities and states are finding non-storage-based solutions to meet the challenges of integrating variable renewable energy sources such as wind and solar. In 2021, the state of South Australia briefly set a record by producing 143% of its electricity demand from local renewables. While battery storage absorbs some of the excess generation, South Australia uses additional strategies to distribute the surplus while also building more wind and solar parks.

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iIn this chapter, all references to hydrogen refer to renewable (or “green”) hydrogen produced from renewable energy sources.i