Renewable energy is derived from natural processes that are replenished constantly. In its various forms, it can derive directly from the sun, or from heat generated deep within the earth. Included in the definition is electricity and heat generated from solar, wind, ocean, hydropower, biomass, geothermal resources, and biofuels and hydrogen derived from renewable resources.

Renewable energy resources exist over wide geographical areas, in contrast to other energy sources, which are concentrated in a limited number of countries. At the national level, at least 30 nations around the world already have renewable energy contributing to their energy supply thanks to government subsidies, bringing their costs comparable to fossil fuels under some conditions.

Renewable energy often displaces conventional fuels in four areas: electricity generation, hot water/space heating, transportation, and rural (off-grid) energy services:

Power generation - By 2040, renewable energy is projected to equal coal and natural gas electricity generation. Interconnectors can enable suitable countries to balance electricity systems by allowing the import and export of renewable energy. Innovative hybrid systems have emerged between countries and regions.

Heating - Solar water heating makes an important contribution to renewable heat in many countries, most notably in China, which now has 70% of the global total (180 GWth). Most of these systems are installed on multi-family apartment buildings and meet a portion of the hot water needs of an estimated 50–60 million households in China. Worldwide, total installed solar water heating systems meet a portion of the water heating needs of over 70 million households. The use of biomass for heating continues to grow as well. In Sweden, national use of biomass energy has surpassed that of oil. Direct geothermal for heating is also growing rapidly. The newest addition to Heating is from Geothermal Heat Pumps which provide both heating and cooling.

Transportation - Bioethanol is an alcohol made by fermentation, mostly from carbohydrates produced in sugar or starch crops such as corn, sugarcane, or sweet sorghum. Cellulosic biomass, derived from non-food sources such as trees and grasses is also being developed as a feedstock for ethanol production. Ethanol can be used as a fuel for vehicles in its pure form, but it is usually used as a gasoline additive to increase octane and improve vehicle emissions. Bioethanol is widely used in the USA and in Brazil. Biodiesel can be used as a fuel for vehicles in its pure form, but it is usually used as a diesel additive to reduce levels of particulates, carbon monoxide, and hydrocarbons from diesel-powered vehicles. Biodiesel is produced from oils or fats using transesterification and is the most common biofuel in Europe. Solar powered cars are electric vehicles powered completely or significantly by direct solar energy. Usually, photovoltaic (PV) cells contained in solar panels convert the sun's energy directly into electric energy. The term "solar vehicle" usually implies that solar energy is used to power all or part of a vehicle's propulsion. Solar power may be also used to provide power for communications or controls or other auxiliary functions. Solar vehicles are not sold as practical day-to-day transportation devices at present, but are primarily demonstration vehicles and engineering exercises, often sponsored by government agencies.

China, Germany and the US have led investment in renewable energy investment and energy production. In particular China is home to the largest producing Hydroelectric installations, Solar and Wind farms and new Nuclear site approvals however issues surrounding unreliable performance, energy storage, investment cost, public subsidy and safety continue to affect wider adoption.

Current renewable energy sources provide an estimated 7% of global primary energy requirements and are forecast to meet 20% of world demand by 2040.