Government net-zero policies and global emission targets have fuelled continued investment in renewable energy infrastructure. A prime success story is Spain, where solar energy now powers a significant portion of the national grid. Multinational corporations are also capitalizing on generous subsidies, while a virtuous cycle of lower costs drives demand and accelerates adoption.
The Surge of Renewable Energy
Over the last decade, nations have made remarkable progress toward powering large segments of their grids with solar, wind, and hydro energy. Spain stands out, recently meeting 75% of its grid demand through solar power alone. As of mid-2024, the country boasted 29.5 GW of operational utility-scale solar capacity, with an additional 7.8 GW under construction and 106.1 GW in development. This underscores Spain’s unwavering commitment to solar expansion.
Investments in grid-scale battery plants complement the growth in renewables, supporting the rise of new sectors such as electric vehicles (EVs). Europe is experiencing a surge in lithium-ion battery manufacturing to support its EV ambitions.
The UK has approved a 60 GWh lithium battery plant scheduled to begin operations in 2025, while CATL, a Chinese firm, is building a major battery facility in Hungary with production expected in late 2025. These initiatives aim to reduce import reliance and strengthen European energy independence.
Falling Costs and Widening Access
One of the biggest catalysts for renewable energy adoption is cost reduction. Technological advancements have slashed lithium-ion battery prices. In 2014, the battery for a Tesla Model S cost around $82,500 at $1,111/kWh. By 2024, that figure had dropped to $8,265 at just $115/kWh—a nearly 90% decrease. As a result, EVs are now priced competitively with combustion vehicles. In China, battery-powered vehicles account for nearly 50% of new car sales, while in Norway that figure exceeds 90%.
Corporate Sustainability and Carbon Credit Incentives
Corporations are also embracing the shift. LEGO, for example, is constructing a $1 billion toy factory in Binh Duong, Vietnam, set to operate entirely on clean energy by 2026. Featuring 12,400 solar panels, an on-site energy storage system, and a Direct Power Purchase Agreement (DPPA), the facility reflects LEGO’s global commitment to carbon reduction.
Tesla has taken the trend a step further, earning significant revenue through carbon credit sales. In 2024, these accounted for roughly 32.9% of its net income—a testament to the economic value of clean practices.
Rising Demand from Emerging Technologies
As industries evolve, new demands for affordable and dependable energy emerge. Data centres, driven by AI and cloud computing, currently consume around 2% of global electricity—a figure expected to double by 2030. AI-specific workloads could increase demand by 10 to 30 times in the next few years as companies deploy high-powered GPUs like Nvidia’s H100s.
Similarly, Bitcoin mining now consumes 175.87 TWh annually, rivalling countries like Poland in total energy use. Encouragingly, over 52% of Bitcoin mining is powered by sustainable sources, and this share may rise to 70% by 2030. Miners increasingly tap into stranded energy sites—locations with abundant but unused energy. Firms like Gridless Compute are not only sourcing cheap power but also bringing electricity to previously underserved African communities.
Reliability Challenges and the Nuclear Question
Despite these advancements, renewable energy systems still face reliability issues. Spain, despite its solar leadership, suffered a major blackout on April 28, 2025, when solar accounted for 55% of the electricity mix. Failures at two substations triggered widespread outages, highlighting the need for resilient grid infrastructure and backup systems.
This brings nuclear energy back into focus. Despite public concerns, nuclear remains the most efficient form of electricity generation. A single 1 GW reactor, with a footprint of just 4 meters in diameter, can match the output of roughly 3 million solar panels or 430 wind turbines.
Finland offers a compelling example of nuclear success. Its reactors supply around 30% of national energy needs, and since their expansion, energy costs have dropped by 75%. With the launch of Europe’s largest reactor, Olkiluoto 3, Finland has significantly reduced electricity imports and phased out high-emission fuels like coal and peat. These changes alone could reduce national CO₂ emissions by over 15%.
Looking Ahead
The future of energy is becoming increasingly clear. Renewable sources, supported by battery infrastructure, will continue to grow. Yet, they are best complemented by consistent and scalable solutions like nuclear power. Ongoing innovations—from more precise solar panels to advanced small modular reactors (SMRs)—promise to meet our global energy needs not just for decades, but for generations to come.
This article was authored by David S. Linker, Portfolio Manager of the Arrowhead New Energy Fund. The Fund is a battery-themed, energy investment opportunity. Arrowhead aims to achieve capital appreciation by investing in lithium battery-related, and energy companies, predominantly listed in the U.S., Hong Kong, and China. This niche strategy insightfully capitalizes on the growing demand for electric vehicles.
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