Renewable energy: a growing solution for a sustainable future

Energy is, after all, the biggest source of emissions there is. Around 75 per cent of the world's greenhouse gas emissions come from energy use: electricity and heat, transport, industry and buildings [1]. So this isn't just about electricity – it's about all the energy we use, from heating to fuel.

Here we look at what renewable energy is, which energy sources exist and what their pros and cons are. We also look at how far Sweden has come and what your business can do.

What is renewable energy?

Renewable energy comes from sources that are replenished by natural processes and therefore don't run out – such as sun, wind, water and bioenergy [12]. Fossil fuels like coal, oil and natural gas, on the other hand, are finite. They formed over a very long time and are being used up far faster than they can form again.

Renewable and fossil-free aren't quite the same thing. Fossil-free energy is a broader term that also includes nuclear power. Nuclear is fossil-free but not renewable, since uranium is a finite resource.

Lower climate impact

Wind, solar and hydropower don't emit greenhouse gases when they generate electricity. That makes them essential for phasing out fossil fuels and slowing global warming.

Over the full life cycle there are of course some emissions – from manufacturing, installation, maintenance and decommissioning. But they are far lower than for fossil energy sources.

Hydropower is a bit of a special case. When a dam is built, forest and land end up under water, and as the vegetation breaks down it releases carbon dioxide and methane. Emissions peak in the first few years and usually fall to levels similar to natural lakes within about ten years [2][3]. In cold climates, emissions are also lower than in the tropics [3]. Most Swedish dams are much older than that.

Nuclear power doesn't emit greenhouse gases when generating electricity either. There are, however, upstream emissions from uranium mining, enrichment and plant construction. Nuclear also comes with other challenges, such as the long-term management of nuclear waste. Even so, its climate impact is far lower than that of fossil fuels, and nuclear currently serves as an important complement in a fossil-free energy mix.

Economic benefits and more stable electricity prices

Wind, sun and water are free raw materials. Once a plant is up and running, variable costs are low, and electricity prices become less dependent on fuel prices that can swing wildly on the world market. In the long run, more renewables can therefore contribute to more stable electricity prices.

In the Nordics, where hydropower makes up a large part of the energy mix, electricity prices are often lower than in the rest of Europe. The transition is also creating jobs in new industries – from solar panel production to wind power and energy storage.

Cleaner air and less environmental impact

Fossil energy doesn't just cause climate change. Burning coal, oil and gas releases sulphur dioxide, nitrogen oxides and particulate matter. These contribute to acidification and harm both nature and human health. Renewable energy cuts these emissions dramatically, which means cleaner air and fewer respiratory illnesses.

But renewables aren't entirely impact-free. Large hydropower projects alter ecosystems and can affect local communities. Solar panels take energy and raw materials to make. Wind turbines change the landscape and can pose a risk to birds. Even so, the overall impact is far smaller than that of fossil alternatives.

In Sweden, renewable energy is planned with wildlife in mind, through environmental impact assessments and tailored protective measures. Wind turbines are sited away from sensitive areas and key migration routes, and operation can be paused during sensitive periods. Hydropower works with fish passages, and bioenergy relies on responsible forestry and agriculture that protect biodiversity.

Energy security and local production

The more energy a country produces itself, the less vulnerable it is to energy crises and geopolitical tensions. Renewable energy is largely domestic and reduces dependence on imported fossil fuels.

Solar and wind can also be built on a small scale, right where they're needed. That's especially important in areas without a power grid. There, solar panels, small wind turbines and biogas can provide electricity, heat, cooking and fuel locally.

Renewable energy sources – an overview

Renewable energy covers several different sources, each with its own strengths and weaknesses. Here are the most important ones and their role in the transition.

1. Solar energy

Solar is one of the fastest-growing energy sources in the world. Solar cells convert sunlight directly into electricity, while solar thermal collectors use sunlight to heat water for space heating and industrial processes. In 2025, solar accounted for 8.7 per cent of global electricity generation and overtook wind power for the first time [19].

The potential is huge: the sun delivers more energy to Earth in one hour than humanity uses in an entire year [16].

Pros:

• Inexhaustible energy source

• No emissions during operation

• Can be installed on rooftops and on the ground

Challenges:

• Needs energy storage for night-time and cloudy days

• Manufacturing requires energy and raw materials

• Can compete with agriculture for land

2. Wind power

Wind is one of the most cost-effective renewable energy sources. Turbines convert the kinetic energy of the wind into electricity. In 2025, wind accounted for 8.5 per cent of global electricity generation [19].

Pros:

• Low operating costs once installed

• Can be built both onshore and offshore

• No emissions during operation

Challenges:

• Output varies with the wind

• Can affect the landscape and wildlife

3. Hydropower

Hydropower is an established renewable energy source used at scale in many countries. Water is stored in dams, or the flow of rivers is used, and the kinetic energy is converted into electricity in turbines. Globally, hydropower is the largest renewable source of electricity, providing around 14 per cent of the world's electricity in 2025 [19]. In Sweden, it accounted for roughly 38 per cent of electricity generation in 2024 [13].

Pros:

• Stable and reliable output

• Can store energy in reservoirs and deliver it when needed

Challenges:

• Affects ecosystems and water flows

• High investment costs

4. Bioenergy

Biomass is the original organic material, such as wood, agricultural residues and forestry waste. Biofuels are processed biomass and come in solid form (like pellets), liquid form (like biodiesel) and gaseous form. Biogas is produced when organic waste is digested and can be used for electricity, heat and transport fuel.

Biofuels release biogenic carbon dioxide, not fossil, but still affect the climate in the short term. Fast-growing crops absorb the carbon dioxide again quickly, whereas a felled tree takes much longer to replace. So the climate benefit isn't a given – it depends heavily on where the fuel comes from.

Pros:

• Can replace fossil fuels in heating and transport

• Reduces waste problems through reuse

Challenges:

• Can compete with food production for land

• Climate impact varies greatly depending on the source

5. Geothermal energy and ground-source heat

Geothermal energy is heat from the Earth's interior. Roughly half of that heat comes from radioactive decay in the mantle and crust. The rest is residual heat left over from when the Earth was formed [9].

The heat can be used in geothermal power plants, where hot water or steam from underground reservoirs drives turbines. It can also be used directly, for example for district heating. Availability is limited to areas with the right geology, often volcanically active ones, and drilling can be costly.

A closely related technology is ground-source heat (bergvärme), which is common in Swedish homes. It mainly draws on solar heat stored in the bedrock, at much shallower depths [17].

Pros:

• Steady and stable energy source

• Low greenhouse gas emissions

Challenges:

• Limited geographical availability

• High upfront costs

6. Ocean energy: wave and tidal power

The ocean holds energy too. Tidal power harnesses the movement of the tides, which are caused by the gravitational pull of the moon and sun, and is already in operation in several places around the world [14]. Wave power converts the motion of waves into electricity, but so far exists mainly as prototypes [14].

Tidal power requires large differences between high and low tide, and in Europe the potential is mainly along the western coastline [14]. In Sweden, wave power on the west coast has the greatest potential [14].

Pros:

• Predictable output

• No climate impact during operation

Challenges:

• Few suitable locations

• The technology is still expensive and partly immature

Renewable energy in Sweden

Sweden is well ahead. Using the EU's calculation method, 65.4 per cent of Sweden's final energy consumption came from renewable sources in 2025 – the highest share in the EU [20]. The main renewable sources are hydropower, wind power and bioenergy, with bioenergy mostly used for heating [12].

Swedish electricity is almost entirely fossil-free. In 2024, 99 per cent of electricity generation was fossil-free – roughly 70 per cent renewable and 29 per cent nuclear [13].

The target has changed too. In 2023, the Swedish Parliament decided that the 2040 target is no longer 100 per cent renewable electricity generation, but 100 per cent fossil-free electricity generation [10]. The difference is that nuclear power now counts.

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Energy efficiency – the best kilowatt-hour is the one you don't use

No energy production is completely impact-free. Every energy source has some environmental impact over its life cycle, renewables included, since equipment and facilities have to be manufactured and transported.

That's why producing energy sustainably isn't enough. We also need to use less of it. Whether the energy is fossil or renewable, wasteful use affects the climate.

Efficiency is about better technology, more efficient buildings and more mindful habits. During the energy crisis, Swedes showed it can be done: households and small businesses on E.ON's grid cut their electricity use by 8 per cent in 2023 compared with the year before [15]. It takes both political will and effort from everyone – not least businesses.

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A global transition – the world's countries must act together

The transition is already under way. In the first half of 2025, renewable sources generated more electricity than coal globally for the first time: 5,072 TWh versus coal's 4,896 TWh [5]. It's a symbolically important milestone, even if the pace is still too slow.

At the COP28 climate summit in Dubai in 2023, the world's countries agreed to triple global renewable capacity and double the rate of energy efficiency improvements by 2030 [6]. An important step – but not enough to meet the Paris Agreement goal of keeping warming well below 2°C and pursuing efforts to limit it to 1.5°C [7].

In October 2026, the UN concluded that 1.5°C can no longer be met without a significant overshoot. In the best case, warming peaks at 1.7–1.8°C and is brought back below 1.5°C before 2100 – if emissions fall by 18 per cent by 2030 [21]. Rapid expansion of renewables is one of the most important tools for keeping that peak as low as possible.

The transition is also about fairness. In 2023, 666 million people lacked access to electricity, and 2.1 billion were still cooking with polluting fuels [8]. Renewable, decentralised energy can give them electricity and development without increasing emissions.

Challenges along the way

Solar and wind vary with the weather. To make sure there's enough electricity even when it's dark and still, we need energy storage, stronger grids and more flexible electricity use.

The build-out also requires major investment, faster permitting and raw materials. And bioenergy and hydropower need to be managed in a way that protects biodiversity.

What can your business do?

Start by finding out where your emissions come from. For many businesses, purchased electricity and heat is a clear item – in the GHG Protocol it's called scope 2 [18].

Improve efficiency where you can, choose renewable electricity and heat, and set requirements for your suppliers. Then follow up year by year, so you can see that your measures are actually making a difference.

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Frequently asked questions about renewable energy

Is nuclear power renewable energy?

No. Nuclear power is fossil-free but not renewable, since uranium is a finite resource. That's why, since 2023, Sweden's target has been 100 per cent fossil-free electricity generation by 2040, not 100 per cent renewable [10].

What is the world's largest renewable source of electricity?

Hydropower. In 2025 it provided around 14 per cent of the world's electricity, followed by solar (8.7 per cent) and wind (8.5 per cent) [19].

How much of Sweden's energy is renewable?

Around two-thirds. Using the EU's method, the share was 65.4 per cent in 2025, according to preliminary figures [20].

Is renewable energy enough to meet the climate targets?

Not on its own. It also takes energy efficiency, storage and stronger grids – which is exactly why the COP28 target combines tripling renewable capacity with doubling the rate of efficiency improvements [6].

Renewable energy – the solution for the future

Renewable energy sources are both technically feasible and economically viable. They cut climate impact, create jobs and strengthen energy security.

But to get the full benefit, we need investment in energy storage, power grids and more efficient energy use. With global cooperation, national strategies and continued innovation, renewable energy can become the dominant source of energy in the future.

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