Alternative Energy Market Projected to Reach US$ 3.4 Trn by 2034, Growing at a 12.4% CAGR

The global alternative energy market, valued at $940.4 billion in 2023, is projected to grow at a 12.4% CAGR, reaching $3.4 trillion by 2034.

WILMINGTON, DE, UNITED STATES, December 14, 2024 /EINPresswire.com/ -- The global alternative energy market¹ was valued at US$ 940.4 billion in 2023 and is forecasted to grow at a compound annual growth rate (CAGR) of 12.4% from 2024 to 2034, reaching a staggering US$ 3.4 trillion by the end of 2034. This growth is driven by increased investments in clean energy technologies, government policies promoting renewable energy adoption, and advancements in sustainable energy solutions.

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Analyst Viewpoint: Key Drivers of Market Growth

The surge in funding aimed at accelerating the renewable energy transition is a pivotal factor propelling the growth of the alternative energy market. Governments worldwide are increasingly supporting the production and adoption of clean energy through policies, tax incentives, and investments. These initiatives are critical to meeting global energy demands while mitigating environmental damage caused by fossil fuels.

In addition to financial support, research and development (R&D) in clean energy technologies are driving demand for more efficient, cost-effective solutions. Companies in the renewable energy sector are investing heavily in the development of improved solar panels, low-carbon technologies, and advanced wind turbine blades with hybrid composites.

Furthermore, strategic partnerships among leading energy companies and governments are facilitating large-scale renewable energy projects and enhancing grid infrastructure. Collaborative efforts are crucial to meeting the growing global demand for clean energy.

What Is Alternative Energy?

Alternative energy refers to energy generated from renewable sources like the sun, wind, water, Earth’s heat, and plant-based fuels. Unlike fossil fuels, alternative energy is both sustainable and clean, with zero greenhouse gas emissions and reduced environmental pollution. As fossil fuel reserves continue to deplete and global carbon emissions rise, the adoption of alternative energy is more critical than ever.

Key Drivers and Trends in the Market

Rise in Funding to Support Renewable Energy Transition

The transition to renewable energy is receiving substantial funding, boosting market growth. The International Energy Agency (IEA) reported that global renewable capacity additions surged by nearly 50% in 2023, reaching almost 510 gigawatts (GW). Governments worldwide, such as the UK, are making substantial investments in clean energy projects. For instance, in June 2024, the UK government announced a funding package exceeding £100 million to support clean energy projects, particularly in Africa and Asia.

Such investments contribute significantly to expanding global renewable energy capacity. The IEA forecasts that nearly 3,700 GW of renewable capacity will come online between 2023 and 2028, with renewable energy sources projected to generate 42% of global electricity by 2028.

R&D Boosts Clean Energy Innovation

Research and development in clean energy technologies are accelerating, particularly in countries like the U.S. and Europe. The U.S. government, for example, allocated US$ 11 billion in its 2024 budget for clean energy R&D. These funds are directed toward innovations in energy storage, hybrid composites for wind turbine blades, and solar energy systems. Collaborative efforts, such as the partnership between ABB and Cap Clean Energy in Canada to produce sustainable aviation fuel (SAF), are key examples of how R&D is shaping the future of alternative energy.

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Regional Insights: Europe Leading the Way

Europe holds the largest share of the global alternative energy market, and this trend is expected to continue through 2034. Growth in solar energy adoption is particularly notable, with the European Union (EU) increasing its renewable energy share from 21.9% in 2021 to 23% in 2022. This expansion is primarily driven by the growing demand for solar power.

In North America, solar and wind energy are at the forefront of the alternative energy market. According to the U.S. Energy Information Administration, annual wind energy generation in the U.S. skyrocketed from 6 billion kilowatt-hours (kWh) in 2000 to 434 billion kWh in 2022, reflecting the region’s commitment to clean energy.

Market Segmentation

By Type:

• Hydroelectric Power
• Wind Power
• Bioenergy
• Solar Energy
• Geothermal Energy

By End-Use:

• Residential
• Commercial
• Industrial
• Others

By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Key Players in the Market

Major companies driving growth in the alternative energy market include:

• ABB
• ACCIONA
• EDF Energy
• Enel Spa
• GE Vernova
• National Grid Renewables
• Invenergy
• Innergex
• Tata Power
• Xcel Energy Inc.
• ReNew
• Duke Energy Corporation
• Power Grid Corporation of India Ltd.
• Seminole Electric Cooperative, Inc.
• APR Energy

These companies are focused on expanding their power purchase agreements (PPAs) to secure long-term revenue streams while contributing to the transition to clean energy.

Notable Developments in the Market

• ACCIONA Energía signed a power purchase agreement (PPA) with Vidrala, a glass container manufacturer, in June 2024. This agreement guarantees the supply of renewable energy for 10 years.

• Masdar and EDF Energy have partnered with the Kyrgyz Republic’s Ministry of Energy to explore hydropower and other renewable projects, aiming for a combined capacity of 3.6 GW.

Conclusion

The alternative energy market is on a trajectory of rapid growth, driven by increased funding, technological innovation, and supportive government policies. As the world shifts away from fossil fuels and embraces clean, sustainable energy sources, the market is expected to grow from US$ 940.4 billion in 2023 to US$ 3.4 trillion by 2034. This transformation not only helps reduce carbon emissions and environmental impact but also provides new economic opportunities and advancements in energy technology.

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¹ https://www.transparencymarketresearch.com/alternative-energy-market.html
² https://www.transparencymarketresearch.com/wind-energy-wind-turbine-market.html
³ https://www.transparencymarketresearch.com/green-energy-market.html