Accelerating Global Energy Transition: Strategic Turning Point in the Renewable Energy Market by 2025

By 2025, the global energy market is undergoing a major transition centered on renewable energy. According to the latest report from the International Energy Agency (IEA), investments in the renewable energy sector are expected to reach $2.1 trillion, surpassing fossil fuel investments ($1.3 trillion) by 62%, marking the largest gap in history. This shift in investment patterns signifies a structural reorganization of the energy industry beyond a mere market trend. The rapid cost reduction and efficiency improvements in solar and wind power technologies are accelerating this change, while advancements in battery storage technology are addressing the intermittency issues of renewable energy, emerging as a game-changer in the power market.

The current global renewable energy installation capacity has reached 3,870GW, a 14% increase from the previous year. Solar power accounts for the largest share at 1,420GW, followed by wind power at 1,020GW. China leads the global renewable energy market, accounting for 64% of total new installations, with the United States (12%), Brazil (4.2%), and India (3.8%) as key markets. South Korea ranks eighth in new installation capacity, solidifying its position as a major player in the Asia-Pacific region.

From a technological innovation perspective, 2025 marks a watershed moment for the renewable energy industry. The efficiency of solar panels has reached 24.1% for commercial standards, a 3.2 percentage point increase from 2020, and the average capacity of offshore wind turbines has exceeded 15MW, reducing the cost of generation to $48 per MWh. This is lower than natural gas generation ($52/MWh), indicating that renewable energy is beginning to surpass fossil fuels in terms of economic viability. European companies such as Denmark’s Orsted, Germany’s RWE, and Spain’s Iberdrola are leading in offshore wind technology, while China’s Goldwind and Mingyang Smart Energy are rapidly growing in the large-capacity turbine market.

Market Revolution of Battery Storage Systems

The energy storage system (ESS) market is experiencing unprecedented growth in 2025, emerging as a key driver for the expansion of renewable energy. The global ESS market size has reached $120 billion, growing by 28% from the previous year, and is expected to expand to $350 billion by 2030. The price of lithium-ion batteries has fallen to $89 per kWh, a 75% decrease from 2015 ($350/kWh). This cost reduction is attributed to large-scale production expansion and technological innovation by Asian battery manufacturers such as China’s CATL, BYD, and South Korea’s LG Energy Solution and SK On.

CATL launched the Qilin 3.0 battery system in the first half of 2025, achieving an energy density of 300Wh/kg and commercializing ultra-fast charging technology that enables 80% capacity in 15 minutes. South Korea’s LG Energy Solution has confirmed the construction of battery plants in Michigan and Arizona, totaling $11 billion, to aggressively target the North American market. SK On is strengthening its position in the electric vehicle and ESS markets by establishing an annual battery production capacity of 60GWh through a joint venture with Ford. These South Korean companies are expanding their local production bases by leveraging the tax benefits of the U.S. Inflation Reduction Act (IRA), significantly impacting the global battery supply chain restructuring.

Diversification of battery technology is also a notable trend. Sodium-ion batteries have begun commercial application in large-scale storage facilities, with China’s CATL and BYD leading the field. Sodium-ion batteries are 20-30% cheaper than lithium-ion batteries and are considered suitable for grid-scale storage facilities due to their higher safety. Meanwhile, alternative technologies such as Liquid Air Energy Storage (LAES) and gravity storage systems are entering commercialization stages, gaining attention as long-term large-scale storage solutions.

Realization of the Green Hydrogen Economy

By 2025, the hydrogen economy is entering a practical industrialization phase, becoming a core element of the renewable energy ecosystem. The global green hydrogen market size has reached $12 billion, growing by 45% from the previous year, and is expected to expand to $80 billion by 2030. Electrolyzer installation capacity has surpassed 15GW, a 76% increase from 2024 (8.5GW). The production cost of green hydrogen has also fallen to $4.2 per kg, beginning to secure competitiveness against gray hydrogen ($5.1/kg).

Germany’s Siemens Energy and Denmark’s Nel Hydrogen are leading the large-scale electrolyzer market, while China’s LONGi Hydrogen and Sungrow are rapidly expanding their market share. In South Korea, Hyundai Motor Company announced a 3 trillion won investment to establish a hydrogen mobility ecosystem, and POSCO Holdings is pursuing large-scale green hydrogen projects in Australia and Oman. SK E&S is expanding domestic hydrogen refueling infrastructure by 100 stations annually through a joint venture with U.S. Plug Power.

Industrial utilization of green hydrogen is also becoming more widespread. Hydrogen reduction steelmaking technology has entered the commercialization stage in the steel industry, led by Germany’s thyssenkrupp and Sweden’s SSAB. POSCO aims to achieve carbon-neutral steel production by investing 10 trillion won in hydrogen reduction steel plants by 2030. In the chemical industry, the production of green ammonia and methanol is expanding, with Saudi Arabia’s NEOM project planning to complete a 1.2 million-ton annual green ammonia production facility by 2026.

Advancements in hydrogen transportation and storage technology are also supporting market growth. The commercialization of Liquid Organic Hydrogen Carrier (LOHC) technology is making long-distance hydrogen transportation a reality, led by Japan’s Chiyoda and Germany’s Hydrogenious. Ammonia-based hydrogen transportation is also expanding, with the establishment of a hydrogen supply chain between Japan and Australia underway. South Korea plans to start importing Australian green hydrogen from the second half of 2025, marking an important milestone for hydrogen trade activation in the Asia-Pacific region.

The growth of the renewable energy market is accompanied by the modernization of power grids and the advancement of smart grid technology. The Distributed Energy Resource (DER) management system market has grown to $18 billion, with commercialization of power demand forecasting and supply optimization technologies utilizing artificial intelligence and machine learning. Tesla in the U.S. has secured a total distributed storage capacity of 750MW by connecting home battery systems through its Virtual Power Plant program. Germany’s sonnen and Australia’s Simply Energy are providing similar services, realizing energy democratization.

The structure of the power market is also accelerating its transformation. The trading volume of Renewable Energy Certificates (RECs) has increased by 35% year-on-year, reaching 450TWh, and corporate Power Purchase Agreements (PPAs) for renewable energy have expanded to 85GW. Big tech companies like Google, Microsoft, and Amazon are expanding clean energy procurement for data center operations, providing a stable foundation for renewable energy demand. In South Korea, the Korea Electric Power Corporation plans to introduce a green tariff for corporations from 2025, allowing direct purchases of renewable energy.

However, the rapid growth of the renewable energy market faces several challenges. The high concentration of supply chains for critical minerals is increasing geopolitical risks, with China controlling 80% of lithium and 90% of rare earth elements, necessitating diversification of supply chains. The U.S. and Europe are expanding domestic mineral processing capabilities through the Inflation Reduction Act and the Green Deal, but reducing dependence on China in the short term is analyzed to be difficult. Additionally, bottlenecks due to aging power grid infrastructure are intensifying, necessitating increased investment in power grids.

The shortage of skilled labor in the renewable energy industry is also a growth constraint. According to the International Renewable Energy Agency (IRENA), 42 million new jobs are expected to be created in the renewable energy sector by 2030, but current education and training programs can only supply 60% of the required workforce. The shortage of skilled professionals is particularly severe in offshore wind and green hydrogen sectors. Consequently, governments and companies are expanding retraining programs and university-linked educational courses.

Looking at the outlook for the second half of 2025, the growth of the renewable energy market is expected to continue. The impact of the U.S. presidential election results and China’s economic stimulus measures on the market is being closely watched, and Europe’s Green Deal 2.0 and Japan’s GX policy are also analyzed to contribute to market expansion. The Asia-Pacific region is projected to lead growth, accounting for over 70% of total new installation capacity. South Korea plans to continue investing 15 trillion won annually to expand the share of renewable energy to 30% by 2030 through the K-RE100 policy and Green New Deal 2.0.

For investors, the structural changes in the renewable energy market present new opportunities. The asset size of clean energy ETFs has surpassed $120 billion, and the spread of ESG investments is continuously raising the valuations of renewable energy companies. The growth potential of companies related to battery materials and critical minerals is particularly noteworthy, and companies related to the hydrogen economy are also being recognized for their long-term growth potential. However, it is a time to closely monitor the impact of rising interest rates and inflation on project financing. The renewable energy industry is no longer a nascent industry reliant on subsidies but has established itself as a mainstream energy source based on economic viability and technological prowess, and this paradigm shift is expected to redefine the global energy market over the next decade.

*This analysis is written for informational purposes and should not be interpreted as investment advice or decision-making guidance. All investments carry risks, requiring careful judgment.*