The shift to green power is stepping up as more countries and their leaders announce new climate targets and funding strategies. This shift is changing industries, opening up new markets and economic models, as well as presenting problems for more conventional energy organisations.

In a recent move, the European Union has set its new target to achieved 45% of renewable energy for total energy consumption by 2030, which is a rise from the previous target of 32%. This comprehensive strategy entails major capital expenditures in wind and solar energy, along with measures to enhance energy productivity in every part of the society. According to the EU, this shift will result in the generation of more than one million new employment opportunities in the renewable energy sector and other connected sectors.

The US is also stepping up its clean energy measures with the Biden administration pledging $369 billion towards climate and clean energy measures through the Inflation Reduction Act. This includes substantial tax exemptions on electric cars and solar panels as well as other green technologies. This has already led to a fresh round of investment in the US clean technology industry with several big manufacturers planning to construct new plants for EV batteries and solar panels.

China, which is currently the biggest greenhouse gas emitter globally, has restated its plans to peak CO2 emissions before 2030 and achieve carbon neutrality by 2060. The country has set aside more than $750 billion to be spent on renewable energy projects within the next five years with a view of increasing its solar and wind power capacity which is currently the highest globally.

These government initiatives are therefore playing a big role in the private sector. Big oil is doubling down on renewables, as BP said it will raise its low-carbon spending to $5bn a year by 2030. Likewise, Shell has pledged to make its energy business a net-zero emissions company by 2050 at the latest.

The automotive business is currently evolving at a very fast pace, with almost every large car maker coming up with very ambitious plans to electrify their cars. For instance, Volkswagen has set out a target of electric vehicles to capture 70% of its sales in Europe by 2030. This shift is leading to significant spendings on battery technology and charging infrastructure.

The financial sector is also actively involved in the transition of the energy sector towards the green energy. Many of the world’s largest banks and investment companies are now incorporating climate risk into their lending and investment strategies. BlackRock, the global investment firm that oversees $6. 3tn in assets, has said that sustainability will be at the heart of its investment process, which will force companies to address their environmental footprint.

But the quick transition is not without its problems. Lithium, cobalt and rare earth elements, which are essential for clean energy technologies, are increasingly in high demand, which has raised questions about the availability of such materials and potential negative impact of mining. These materials are being used in various products and governments and companies are looking for ways of ensuring sustainable sources of these materials through recycling and development of other materials.

Another important aspect is the grid infrastructure because a large number of countries require major improvements to integrate a higher share of variable renewable capacity. This has resulted in increased spending in energy storage systems and smart grid systems.

The transition is also affecting conventional energy industries, coal mining areas and oil-based regions are experiencing some form of economic strain. States are struggling to address the requirements of helping these communities while at the same time pursuing the decarbonization agenda.

Nevertheless, the process of green energy transition seems to be irreversible. Technological advancements that have reduced the cost of renewable power, heightened awareness on climate change, and enhanced competition of clean energy are some of the factors that are behind this change. In the next few years, the growth of energy systems, industrial processes, and the global economy is expected to remain a fast pace as the world shifts towards low-carbon economies.