The green transition can only have one direction – Forward!

Korkia’s event on renewable energy brought together industry leaders to discuss the state of energy markets and green transition investments in May 2025. In my keynote, I explored the key trends shaping the global renewables sector: from the unstoppable rise of solar energy to the shifting dynamics of capital investments. These trends underscore why the green transition is not only inevitable but accelerating, driven by innovation, investments, and unwavering global commitment.

A time of transformation

The renewables sector is undergoing a massive transformation. Breakthrough technologies are emerging, capital is flowing at scale, and innovations are reshaping how we generate and consume energy. Yet, this journey hasn’t been without challenges. Geopolitical tensions, supply chain disruptions, and economic headwinds have all tested the sector’s resilience.

Despite these hurdles, one thing remains clear: the energy transition is constantly moving forward. The urgency for large scale capital deployment has never been greater.

Solar continues to be in the lead

Currently, global installed renewable energy capacity stands at approximately 4.6 TW. To stay on track with the 1.5°C climate targets, we need to scale installed capacity to over 15 TW by 2050. This translates to an annual investment requirement of around $2.5 trillion. Yes, that’s a lot of money, but failure simply isn’t an option.

The majority of this renewables capacity growth will be led by solar. It is fast to develop and deploy, relatively simple to build, and the most cost-efficient of all major renewable technologies. Its resource availability is virtually unlimited across much of the world. While onshore wind will continue to play a key role, solar is clearly in the driver’s seat.

Geographically, a significant share of the growth is expected in mainland China, wider Asia, and the Middle East, where governments have launched ambitious renewables procurement programmes. However, we are seeing robust growth in other regions around the globe as well.

Interesting to note is the revived global interest in the last couple of years in deploying additional capacities in low carbon nuclear energy, sparked by political shifts and innovative technological developments such as Small Modular Reactors (SMR) and nuclear fusion.

A surge in strategic and financial capital

Utilities have long been the key players in renewable energy deployment, but the current energy security agenda has pushed them to move faster. Many utilities have set aggressive 2030 and beyond targets and are actively expanding their pipelines through acquisitions. It’s no longer just about greenfield development – inorganic growth is high on the agenda to secure assets and capabilities needed to meet those targets – with onshore wind, solar and battery storage as key focus technologies. Following a strong push into renewables in recent years, we are seeing some European Oil & Gas players reassessing their renewables targets, or even retrenching, and corporations re-investing into oil & gas – no doubt impacted by the emergence of activist investors.

Winding back 10 years, utilities and strategics used to dominate early-stage development, while financial investors were primarily seeking derisked, operational investments. A few years later, we saw financial investor interest spanning the entire development cycle as investors stepped in earlier to enhance returns. Many acquired developers outright, others have been buying development assets and pipelines to build long-term portfolios. In the last couple of years, however, given the increased market volatility the investment focus of financial investors has shifted back to more yield, less risk and operational assets and/or portfolios.

Appetite to invest continues to be huge, and many financial investors have been raising sizeable new energy transition and infrastructure funds with a view to increase their exposure to the sector.

Demand signals: Strong growth in the Corporate PPA market

On the demand side, corporate power purchase agreements (PPAs) are booming. Companies are setting clearer sustainability goals and roadmaps, and procuring green electricity is one of the most direct ways to meet them. Changes in PPA regulation organized by Governments have also served as a catalyst for the surge in the development of renewables in many countries such as, for example, Romania.

We’re seeing both large, multinational corporations as well as SME’s entering long-term PPA’s with wind and solar farms. The emergence of hybrid and “stacked” PPA’s across various technologies will help reduce shape risk and manage price volatility, and better caters to many corporates’ demand for baseload power. The pooling of SME PPAs will further broaden the playing field, with new mechanisms being invented to mitigate any bankability issues. In fact, with over 13GW, 2024 was a record year for PPA’s closed in Europe, and the numbers are expected to grow exponentially going forward.

We expect to see a significant boost in demand for green electricity in the coming years stemming from the roll-out of hydrogen and eFuels production, even though large-scale deployment still lags behind. Data centers will also heavily contribute to the demand growth, with large-scale build-out in EMEA and APAC already ramping up, driven by increasing AI adoption and build out of AI training data centers. While nuclear power has the energy profile data center developers seek, it faces much longer development timelines and immature supply chains, requiring short- to mid-term supply which will have to be met by innovative renewables technologies solutions.

Conclusion

We have a number of tailwinds and all scenarios that are commonly accepted see an acceleration of renewables globally in the coming years. The sector has already overcome significant obstacles, and we cannot afford to lose momentum. The stakes are high, but so is the opportunity. By working together, sharing expertise, and deploying capital wisely, we can ensure that we’re on the right trajectory when it comes to climate targets. Climate action is not a choice – it’s a necessity!

WRITER

Kinga Charpentier

EY-Parthenon (Strategy & Transactions), Europe Central Energy & Industrials Leader