Renewable energy is energy generated from natural resources—such as sunlight, wind, rain, tides and geothermal heat—which are renewable (naturally replenished). In 2006, about 18% of global final energy consumption came from renewables, with 13% coming from traditional biomass, such as wood-burning. Hydroelectricity was the next largest renewable source, providing 3% (15% of global electricity generation), followed by solar hot water/heating, which contributed 1.3%. Modern technologies, such as geothermal energy, wind power, solar power, and ocean energy together provided some 0.8% of final energy consumption.

Climate change concerns coupled with high oil prices, peak oil and increasing government support are driving increasing renewable energy legislation, incentives and commercialization. Investment capital flowing into renewable energy climbed from $80 billion in 2005 to a record $100 billion in 2006.

Wind power is growing at the rate of 30 percent annually, with a worldwide installed capacity of over 100 GW, and is widely used in several European countries and the United States. The manufacturing output of the photovoltaics industry reached more than 2,000 MW in 2006, and photovoltaic (PV) power stations are particularly popular in Germany and Spain. Solar thermal power stations operate in the USA and Spain, and the largest of these is the 354 MW SEGS power plant in the Mojave Desert. The world's largest geothermal power installation is The Geysers in California, with a rated capacity of 750 MW. Brazil has one of the largest renewable energy programs in the world, involving production of ethanol fuel from sugar cane, and ethanol now provides 18 percent of the country's automotive fuel. Ethanol fuel is also widely available in the USA.

While there are many large-scale renewable energy projects and production, renewable technologies are also suited to small off-grid applications, sometimes in rural and remote areas, where energy is often crucial in human development. Kenya has the world's highest household solar ownership rate with roughly 30,000 small (20–100 watt) solar power systems sold per year.

Some renewable energy technologies are criticized for being intermittent or unsightly, yet the market is growing for many forms of renewable energy. In response to the G8's call on the IEA for "guidance on how to achieve a clean, clever and competitive energy future", the IEA reported that the replacement of current technology with renewable energy could help reduce CO2 emissions by 50% by 2050.