Renewable Energy Transition: UK vs US Analysis

The global quest to combat climate change and reduce greenhouse gas emissions has led to a significant shift towards renewable energy transition. The United States and the United Kingdom have emerged as critical players in this global shift.

The transformative shift in its energy landscape was driven by the urgent need to limit global warming to 1.5 degrees Celsius above pre-industrial levels, as outlined in the Paris Agreement. This transition is primarily marked by a move from fossil fuels towards cleaner, renewable energy sources such as solar, wind, hydro, and biomass.

In 2022, renewable energy sources accounted for about 13.1% of total US primary energy consumption and about 21.5% of utility-scale electricity generation. The nation's energy primarily comes from fossil fuels (79%), with nuclear energy contributing 8.0% and renewable sources making up 13.1%. 

As of 2023, wind and solar are forecasted to account for 16% of total electricity generation, up from 14% in 2022. Significant investments in new solar and wind-generating capacity primarily drive this increase. The US electric power sector operated about 73 gigawatts (GW) of solar photovoltaic (PV) capacity at the end of 2022, with plans to expand solar capacity by 43% (32 GW) in 2023. 

In the first half of 2023, renewables generated 25% of US power, with solar contributing 5.77% of total US electrical generation. This growth in renewable energy generation has been facilitated by the rapid expansion of energy resources, especially solar and wind, and the declining construction costs and favourable tax credits for solar capacity. 

On the other side of the Atlantic, the UK has made significant strides in its renewable energy journey. In 2020, renewables accounted for more than 43.1% of the UK's total electricity generated. By 2022, this figure had risen to 40%. The primary renewable energy sources in the UK are wind power, plant biomass, and solar power. 

As of the second quarter of 2023, renewable energy contributed 42.1% of total electricity generation. This growth has been driven by a 6% increase in renewable electricity generation capacity compared to the same quarter of the previous year, with offshore wind and solar growing by 9% and 8%, respectively.

However, despite these advancements, the UK's renewable energy capacity growth has been slower than the global average. In the past three years, the UK's renewable capacity has grown by an average of 4.45% per year, compared to a worldwide average of 9.67%. 

There is a stark contrast between the US and the UK regarding renewable energy usage. While the US still heavily relies on fossil fuels, the UK has made substantial progress in shifting towards renewable energy sources. In 2020, the UK marked a historic milestone when electricity generated from renewable energy sources outstripped that from fossil fuels. 

The target set by the UK government is to decarbonise all sectors of its economy to achieve net-zero emissions by 2050. As part of this strategy, the UK government has laid out policies and proposals to reduce emissions in each sector, with a significant focus on increasing the share of renewable energy

However, the UK's growth rate in renewable capacity has been slower than the global average. Additionally, the UK has attracted around £120 billion in investment in renewables since 2010 and is expected to attract a further £100 billion in net zero by 2030. 

Key data points for renewable energy in the United States and the United Kingdom.

The United States and the United Kingdom have made significant strides in harnessing renewable energy, with the UK currently deriving a higher percentage of its energy from renewable sources than the US.

The US is projected to continue increasing its renewable energy consumption through 2050, while the UK is on track to increase renewable generation, with plans to expand offshore wind's output from 11GW to 50GW by 2030, and solar capacity could grow five-fold from 14GW to roughly 70GW in the same period. 

In 2020, renewable energy sources comprised a significant proportion of the electricity mix that powers homes and businesses. It was the first year in the UK's history that electricity came predominantly from renewable energy, with 43% of power coming from a mix of wind, solar, bioenergy, and hydroelectric sources. As of December 2020, renewable sources generated 41.4% of the electricity produced in the UK, which was around 6% of total UK energy usage. 

In 2022, wind power contributed 26.8% of the UK's electricity generation. Biomass energy contributed 5.2% to the renewable mix. Solar power contributed 4.4%, and hydropower, including tidal, contributed 1.8%. 

Renewable energy sources have been gaining traction, with solar and wind energy leading the charge. According to the US Energy Information Administration (EIA), wind and solar accounted for 14% of US electricity generation in 2022, and this figure is expected to rise to 16% in 2023 and 18% in 2024. 

Investments in new solar and wind-generating capacity primarily drive the increase in renewable energy generation. The power sector operated about 73 gigawatts (GW) of solar photovoltaic (PV) capacity at the end of 2022, with plans to expand solar capacity by 43% (32 GW) in 2023. 

This has been a remarkable achievement since 2022, when wind and solar power accounted for 14% of US electricity generation while the UK accounted for 20%. The share of renewable energy in the global energy mix increased from 16% in 2020 to 77% by 2050 in IRENA's 1.5°C scenario. 

The United States and the United Kingdom have set ambitious targets for renewable energy. The UK has committed to reducing emissions to 68% by 2030 and achieving net zero greenhouse gas emissions by 2050. However, current policies are estimated to lead to 2030 emissions of 58–63% below 1990 levels, indicating that further action is needed. 

Renewable energy production and consumption in the US reached record highs in 2022. This was driven mainly by record-high solar and wind energy production and increasing hydroelectric power production. 

The share of renewable energy in the global energy mix is expected to increase from 16% in 2020 to 77% by 2050. The UK is on track to contribute significantly to this increase. The country's solar capacity was over 14.4 gigawatts (GW). The UK's alone renewable generation share rose 3.5 percentage points to 42.1%, and low-carbon generation rose 2.7 percentage points to 57.8%. 

The transition to renewable energy is a global imperative. The US and UK have made significant strides in attracting private and public investment in renewable energy, contributing to the worldwide shift towards cleaner energy sources. 

Investment in renewable energy in the US has been robust, with an estimated $55.5 billion invested in 2021. This investment is driven by private-sector activity and public funding, with significant support from the federal government. 

The UK has also seen substantial investment in renewable energy, with £12 billion invested in 2021. Various funding options, including government grants, loans, and private-sector investment, support this investment.

In the United States, the renewable energy sector has seen a significant influx of private investment. In the past year, private investments in domestic clean energy projects and manufacturing facilities have totalled $271 billion, exceeding the combined clean energy investments made over the previous eight years. 

This surge in investment has been driven by unprecedented federal support and incentives, leading to the announcement of 184,850 megawatts of new utility-scale clean energy capacity and the creation of 29,780 new manufacturing jobs. 

However, challenges such as supply chain issues, inflation, and opposition driven by misinformation hinder renewable energy development and must be addressed to realise the incentives provided fully. 

The private finance market for renewable energy is well established in the United Kingdom, with considerable personal investment in renewable energy projects across several sectors. The government's working group concluded that there are no general market failures in the supply of private finance for the renewable energy sector in Wales. 

If projects provide sufficient commercially acceptable returns, capital investment is generally available from private markets. However, the group also identified that public finances must target specific gaps and market failures, such as community enterprises' issues accessing finance for projects adopting a shared revenue model.

The federal government has significantly mobilised private sector investment in renewable energy in the US. Public investments are effective in advancing renewable energy goals and industrial policy priorities. For example, government R&D expenditures, feed-in tariffs, and taxes have been found to have positive effects on private investment. 

By supporting nascent yet promising technologies when private financing institutions do not, the government is carving a path for clean energy projects. 

In the UK, various finance options and funding support are available to help make renewable energy projects a reality. These include government schemes, local council support, and specialised products such as the Green Loan for energy efficiency in the public sector. The UK government also funds homeowners and businesses who export surplus energy from their systems to the grid. 

However, challenges remain to be addressed, including regulatory hurdles, public acceptance, and supply chain constraints. By addressing these challenges and leveraging the available financing models and funding options, both countries can continue to drive the transition to renewable energy.

The US and UK face challenges in transitioning to renewable energy, including the need for significant infrastructure investment, regulatory hurdles, and public acceptance. Ensuring accurate measurements of global horizontal irradiance in solar and renewable energy efforts can also be challenging. 

However, there are also unique opportunities for collaboration and knowledge sharing between the two countries, particularly in technology development, policy formulation, and financing mechanisms.

In terms of challenges for both the United States and the United Kingdom face several challenges in their transition to renewable energy, including:

Despite these challenges, there are several opportunities for further expansion and innovation in the renewable energy sector in both the US and UK:

The future of renewable energy in the US and UK looks promising. Both countries are expected to continue increasing their renewable energy capacity. The UK is well on its way to creating an electricity system wholly based on renewable and carbon-free sources. In the US, wind and solar are the fastest-growing renewable sources. 

Based on data from IEA, McKinsey and statistics, the table focuses on the renewable energy sources requested: Wind, Solar, Hydro, Biomass, and Geothermal. Here is a comprehensive table presenting the future projection of renewable energy for the United States and the United Kingdom:

Several emerging trends could shape the future of the renewable energy industry. These include:

Potential disruptions to the renewable energy transition could arise from geopolitical conflicts, energy security concerns, macroeconomic impacts, and the North-South divide. The current global energy crisis also brings new opportunities and challenges for renewable energy.