:max_bytes(150000):strip_icc()/Renewable-resource-2c5367de2f4a4a98b1838a78f3ba6790.jpg)
Caroline Banton has 6+ years of experience as a freelance writer of business and finance articles. She also writes biographies for Story Terrace.
Updated August 12, 2024 Reviewed by Reviewed by Thomas J. CatalanoThomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas' experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.
Fact checked by Fact checked by Pete RathburnPete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom.
A renewable resource is a resource that can be replenished naturally over time. As a result, it is sustainable despite its consumption by humankind.
Renewable resources for the production of energy are considered especially important for their potential to replace nonrenewable, or finite, resources. Additionally, renewable resources can offer cleaner energy solutions than those provided by nonrenewable resources such as coal and fossil fuels.
Examples of renewable resources include the sun, wind, water, the Earth’s heat (geothermal), and biomass.
A renewable resource is a resource of which there is a seemingly endless supply because it can be replenished. For example, renewable resources such as the sun, the wind, and geothermal heat are considered inexhaustible.
Water is also considered a renewable natural resource, as long as there is precipitation. Changing climate patterns have underscored the need for conservation efforts to protect water supplies.
Other natural resources are considered renewable even though some time and effort must go into their renewal. In addition, most precious metals are considered renewable because they’re reusable. Since they are not destroyed during their extraction and use, they can be recycled.
Unlike renewable resources, once a nonrenewable resource is depleted, it cannot be recovered. As the human population continues to grow and finite resources become increasingly scarce, the demand for renewable resources increases.
Renewable energy sources include wind power, solar power, hydroelectric power, bioenergy, and geothermal energy.
Fossil fuels have been used since the late 1880s to produce the energy we use. Renewable resources such as hydropower and wood have been used much longer. In fact, they were the two primary renewable energy resources up to the 1990s.
In the years since, renewable energy production has come increasingly from biomass, geothermal, solar, water, and wind resources.
Renewable resources that can replace fossil fuels in the production of energy are a major focus of nations around the world. The challenges for successful renewable energy production include reliability and expense.
A great deal of research is taking place to determine the viability and best implementation of renewable energy on a mass scale.
The Paris Climate Accord is an agreement involving over 180 countries to reduce greenhouse gas emissions and limit the global temperature increase to less than 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels by the year 2100. On Jan. 20, 2021, President Joe Biden signed an executive order for the United States to rejoin the Paris Agreement after the Trump administration withdrew from it on Nov. 4, 2020.
Sunlight is a widely recognized renewable resource. In fact, it has been used throughout human history to warm shelters, dry and cook foods, and heat water. Different technologies exist and continue to be developed to collect and convert solar radiation into heat energy that can be used for various purposes.
For example, solar photovoltaic (PV) devices, or solar cells, change sunlight into electricity. Depending on the number of solar cells in use, they can power small appliances or provide electricity for many homes.
The challenge with using sunlight for our energy needs is that it can vary and, at times, be unreliable. The availability of sunlight depends on the time of day, existing weather conditions, season of the year, and geographic location.
Wind has a direct relationship to the sun. Daily winds result when the sun’s heat is captured unevenly by the varying surfaces on the Earth, including oceans and other water masses. Air above land heats up faster than air above water during the day when the sun is shining. That warm air expands and rises. Cooler air takes its place. This creates wind.
In earlier years, windmills were used across the United States to capture energy and pump water from wells. They still exist in some farming areas to provide livestock with water.
Today, wind is harnessed to produce electricity. Wind flows over blades in wind turbines. The blades turn, and that drives an electric generator. In turn, that generates electricity.
Typically, wind turbines don’t produce emissions capable of polluting the air or water. Also, they don’t need to be cooled by water. Though rare, they can have some negative effects on the environment if they leak lubricating fluids or catch fire. They can also negatively impact bird life and species.
In 2023, wind turbines provided about 10.2% of total U.S. utility-scale electricity generation.
Hydropower is the energy produced by water. It was an early renewable source of energy even before it was used to generate electricity. For example, hydropower turned paddle wheels on rivers to allow for the milling of grain and lumber. However, changes in precipitation and lack of water due to droughts can affect hydropower production.
Hydropower was used to generate electricity in the U.S. beginning in 1880. Today, most of the nation’s hydroelectricity is produced in facilities located at large dams built in the 1970s.
Until 2019, hydropower was the largest source of total annual renewable electricity generation in the U.S.
In 2023, hydropower accounted for 5.7% of total utility-scale electricity generation.
Geothermal is a renewable resource that uses Earth’s heat to generate power. Hot springs heated by the Earth have been used for centuries for bathing. Geothermal energy has also been used, and still is, for district heating systems.
Geothermal energy is used to generate electricity as well. Power plants for this purpose are built below ground, within approximately a mile of Earth’s surface.
Seven U.S. states had geothermal power plants in 2023: California, Hawaii, Idaho, Nevada, New Mexico, Oregon, and Utah. In that year, they produced approximately 17 billion kilowatt-hours (kWh) of electricity.
In 2023, geothermal accounted for about 0.4% of total U.S. utility-scale electricity generation.
Geothermal heat pumps are another way to use Earth’s heat. They transfer heat from the ground (or water) into buildings during the winter and reverse the process in the summer to aid in heating and cooling.
Renewable organic products that produce energy are referred to as biomass. The process of photosynthesis uses energy from the sun to convert biomass resources into chemical energy.
In 2023, biomass provided nearly five quadrillion British thermal units (Btu) and about 5% of total primary energy use in the United States. In the same year, it accounted for about 1.1% of total U.S. utility-scale electricity generation.
Biomass renewable resources include wood and wood waste, agricultural crops and waste (which are mainly used for biofuel), municipal waste including paper, cotton, food, and yard waste, and animal manure and sewage.
Biofuel refers to liquid fuels and blending components produced from feedstock biomass materials. Most biofuels are used as transportation fuels, but they may also be used for heating and electricity generation. This renewable resource has become more prevalent in recent years as an alternative to nonrenewable resources such as coal, oil, and natural gas.
In January 2023, U.S. biofuels production capacity was about 23 billion gallons, an increase over the same period in 2022. In addition, the U.S. was a net exporter of biofuels. The fuel ethanol accounted for 78% of biofuel production.
Although prices are still high for biofuel, some experts project that as the prices of fossil fuels increase, the price of biofuel will become more competitive.
Renewable resources are those resources that can continue to exist despite being consumed or can replenish themselves over a period of time even as they are used. They include sun, wind, water, geothermal, and biomass.
The disadvantage of renewable resources is that they may not be available for use when needed.
For example, the ability to collect and use solar energy is limited at night and when the sky is overcast. The continued availability of water depends on ongoing precipitation and weather conditions.
Renewable resources are considered to have less of a negative impact on the environment than nonrenewable resources.
Nonrenewable resources are those resources that are considered finite due to the extremely long time it takes for nature to create them. Once depleted, they become unavailable. They include coal, natural gas, and oil.
The advantage of nonrenewable resources is that they’re readily available now and the infrastructure for their use exists to produce power on demand.
However, they have a greater negative environmental impact than renewable resources. The heat trapped by carbon dioxide gas when coal and oil are burned contributes to the atmosphere’s rising temperature and global climate change.
Activists, consumers, and government leaders promote renewable energy as a way to generate needed power without the emissions that are warming the planet and threatening life on Earth.
The COVID-19 pandemic supported the trend toward lower fossil fuel prices due to record-low consumption in 2020. However, with the outbreak of the Ukraine-Russia war in early 2022, the price of oil skyrocketed and has remained high in 2024.
Renewable resources have become a focal point of the environmental movement, both politically and economically. Energy obtained from renewable resources puts much less strain on the limited supply of fossil fuels, which are nonrenewable resources.
The problem with using renewable resources on a large scale is that they are costly. In most cases, more research is needed to determine how to use them most cost-effectively.
Beyond their limited supply, energy sources such as fossil fuels damage the environment when produced and consumed, and they contribute to global warming.
The first major international accord to curb carbon dioxide emissions and global warming was the Kyoto Protocol, signed in 1997. More recently, global powers met in Paris in 2015 to pledge emissions reductions and a focus on higher reliance on renewable resources for energy.
Incentives can encourage the use of alternative energy. For example, energy taxes place a surcharge on fossil fuels. This can make the prices of renewable resources more competitive and attractive. As a result, people may be more inclined to use renewable energy. Also, the reward of renewable energy certificates (RECs) acts as an incentive to produce energy using green sources.
Green funds, which are investments such as mutual funds, support eco-friendly and sustainable companies by investing in them. These investments also help to promote environmental awareness.
These incentives seem to be having an effect. According to the U.S. Energy Information Administration (EIA), in 2022, renewable energy provided almost 13.2 quadrillion British thermal units (Btu). This represented 13% of total U.S. energy consumption.
In 2023, 21.4% of U.S. utility-scale electricity was generated by renewable energy sources.
State and federal governments have encouraged more biofuel consumption with requirements and incentives for the use of renewable energy. The EIA anticipates that U.S. renewable energy consumption will continue to increase through 2050.
The term “renewable resource” refers to a resource that replenishes itself naturally over a span of time. It can be used without worry that it will be depleted permanently. Renewable resources are of particular interest as sources of renewable energy.
The wind is one example. So are the sun and water. Biomass is a source of renewable energy from plants and animals. It includes wood, agricultural crops, food waste, and animal manure.
Energy taxes place a surcharge on fossil fuels. The hope is that the prices of energy options produced by renewable resources will become more attractive and encourage consumer interest. Green mutual funds support eco-friendly and sustainable companies by investing in them and helping to promote environmental awareness.
The Kyoto Protocol is an international agreement to reduce carbon dioxide (CO2) emissions and greenhouse gases (GHG) in the atmosphere. The essential tenet of the Kyoto Protocol is that industrialized nations need to lessen the amount of their CO2 emissions. The protocol was adopted in Kyoto, Japan, in 1997, when greenhouse gases were rapidly threatening our climate, life on Earth, and the planet itself.
Renewable resources include the sun, the wind, water, Earth’s heat (geothermal), and biomass.
Renewable resources are natural resources that replenish themselves or exist on a continual basis. In recent years, they have been of special interest for the vital role they can play in the production of energy. They’re also seen as having less of a negative impact on the environment.
Of course, renewable resources were used for thousands of years before nonrenewable resources such as coal and oil began to be used extensively in the late 19th century.
Due to the finite nature of coal and oil, plus the threat from climate change, the world community is focused on the greater use of renewable resources to meet energy needs.
Article SourcesThe offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Description Related Terms Contango is when the futures price of an asset is higher than its current spot price.An omnibus account allows for managed trades of more than one person, and allows for anonymity of the persons in the account. Transactions appear in the name of the broker.
A zero-sum game is a situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero.
A variable margin payment that is made by members to their respective clearing houses based on adverse price movements of futures contracts.
The spark spread is the difference between the wholesale market price of electricity and its cost of production using natural gas.
A renewable energy certificate (REC) is proof of the production of one megawatt-hour (MWh) of electricity generated from a renewable energy resource.
Related Articles:max_bytes(150000):strip_icc()/GettyImages-2165010420-34116454dc2f483cbc65ac1275be1a2f.jpg)
:max_bytes(150000):strip_icc()/omnibusaccount.asp-final-e3970c1c511d43aabc271ad8d6d87a89.png)
:max_bytes(150000):strip_icc()/zero-sumgame_final-f2202227bea2472ba9204f7ec61b962e.png)
:max_bytes(150000):strip_icc()/shutterstock_394537039-cdccf5d847fe4031877608c3180376d5.jpg)
:max_bytes(150000):strip_icc()/GettyImages-1249932038-3832d19219044edda498e9e0fa53f7c3.jpg)
:max_bytes(150000):strip_icc()/GettyImages-1170687091-dfd9e5ca93404334b436bf1c3dfdc1d6.jpg)
We and our 100 partners store and/or access information on a device, such as unique IDs in cookies to process personal data. You may accept or manage your choices by clicking below, including your right to object where legitimate interest is used, or at any time in the privacy policy page. These choices will be signaled to our partners and will not affect browsing data.
Store and/or access information on a device. Use limited data to select advertising. Create profiles for personalised advertising. Use profiles to select personalised advertising. Create profiles to personalise content. Use profiles to select personalised content. Measure advertising performance. Measure content performance. Understand audiences through statistics or combinations of data from different sources. Develop and improve services. Use limited data to select content. List of Partners (vendors)
