On August 20, 2025, the global energy landscape reached a pivotal moment, with a United Nations (UN) report declaring that the long-anticipated tipping point between renewable energy and fossil fuels has finally arrived. According to the report, renewable sources made up an astonishing 92.5% of all new electricity capacity additions and accounted for 74% of electricity generation growth worldwide in 2024. This milestone marks a dramatic shift in how the world powers its homes, industries, and economies, signaling what UN Secretary-General António Guterres described as the dawn of a “renewable era” and the twilight of fossil fuels.
The implications of this transition are profound, both economically and environmentally. For the first time, the costs associated with solar and wind energy have dropped below those of coal, natural gas, or oil, making them not just greener but also the fastest and cheapest options for new electricity generation. As the UN report details, solar photovoltaic (PV) plants and concentrated solar plants (CSPs) are leading the charge. CSPs, which use mirrors or lenses to concentrate sunlight and generate steam for turbines, offer the added benefit of grid stability – a critical feature in a world where renewables are rapidly replacing traditional energy sources. The report points to recent grid failures, like the Spanish grid collapse, as evidence of the need for such stability, highlighting how turbines’ inertia can help balance frequency fluctuations that threaten power reliability.
Between 2010 and 2022, the cost of solar and wind power plummeted, reaching a point by 2023 where utility-scale solar PV and onshore wind energy were both cheaper to produce than electricity from fossil fuels. Battery prices have also fallen, making grid-level energy storage and short-term hydro-storage schemes more economically attractive than ever. As a result, renewables are now competitive on cost alone, independent of the urgent need to reduce greenhouse gas emissions and mitigate climate change.
Yet, this global momentum is not without its detractors. The United States, historically the world’s second-largest emitter of greenhouse gases, stands out as the lone major economy resisting the renewable transition. The Trump administration has repeatedly denied climate change and continued to incentivize fossil fuel production, even as the rest of the world surges ahead. According to Globetrotter, the US’s stance is not just a matter of policy but one that could actively worsen the world’s transition to a hotter, more volatile climate.
Meanwhile, the economic case for renewables grows ever stronger. With solar and wind now offering electricity at costs well below those of coal and oil, and with the addition of affordable batteries for grid stability, the argument for a rapid energy transition is no longer just about saving the planet – it’s about saving money. This shift is what many experts have called the real inflection point, a moment anticipated since the 1980s when solar PV technology first emerged onto the scene.
Globally, countries are racing to adapt. The European Union and the United Kingdom, both significant historical contributors to global carbon emissions, have ramped up investments in renewables. India has already surpassed its target of 50% installed capacity in renewables, well ahead of schedule, while China and other developing countries are investing heavily in clean energy solutions. For most of the developing world, the renewable path is not only more environmentally responsible but also the most cost-effective option available.
Indonesia, in particular, has become a focal point in the global energy transition. After the United States exited the Just Energy Transition Partnerships in March 2025, China emerged as Indonesia’s strongest potential financing partner for renewables. Indonesia has ambitious plans: its new Electricity Supply Business Plan (RUPTL), published in May 2025, outlines a goal for renewables to constitute 35% of its energy mix by 2034. To achieve this, Indonesia has forged green deals with China totaling $22.6 billion over the past two years, covering electric vehicles, lithium batteries, photovoltaic products, and renewable infrastructure.
According to Dialogue Earth, China has provided nearly $4 billion annually for climate projects in developing countries since 2013, amounting to over $34 billion by 2021. Between 2013 and 2023, China was the key source of public clean energy investments in Southeast Asia, with Indonesia receiving nearly half of the $2.7 billion invested. In 2024, Indonesia received $404.6 million from the Belt and Road Initiative’s clean energy financing. Over the past decade, China has invested $45 billion in more than 43,700 Indonesian infrastructure projects, including $8.1 billion in 2024 alone.
However, experts caution that China’s position in global climate financing is complex. Putra Adhiguna, managing director of the Energy Shift Institute, notes that while China has the technological capacity and diplomatic influence to lead, its reluctance to be classified as a developed country – and thus contribute to the annual $100 billion COP funding commitment to emerging markets – complicates its role. “We anticipate further developments to ascertain the depth of [China’s] commitment, particularly given its position as the leading renewable energy investor in Southeast Asia among all nations,” Adhiguna told Dialogue Earth.
Despite China’s dominance, its overseas public bank financing has declined since 2016, with the private sector now driving most renewable investments in Indonesia. China’s involvement has included projects like the 110 MW Jatigede hydropower plant, inaugurated in January 2025, though it withdrew from the massive Kayan hydropower project in 2019 due to COVID-19 travel restrictions. Japan has since stepped in to support Kayan, reflecting the shifting alliances and competition in the region’s clean energy race.
Indonesia’s transition is not without challenges. The state-owned electricity company PLN faces criticism for a lack of transparency in procurement processes, which has deterred investors. Tiza Mafira, associate director of the Climate Policy Initiative Indonesia, emphasizes that the country will require all types of financing – public, private, and concessional loans – to meet its renewable goals, especially as many projects are not yet commercially viable due to regulatory hurdles. “Because we can’t attract private funding in Indonesia, we must trigger it by disbursing public funds. If disbursed properly, for example through a blended mechanism or guarantee, private investors who weren’t interested will become interested,” Mafira explained to Dialogue Earth.
Meanwhile, the legacy of fossil fuels lingers. Major oil companies like ExxonMobil, Chevron, BP, and Shell continue to depend on fossil-based business models, with a 2022 PLOS ONE analysis concluding that their investments and actions do not match their public discourse on clean energy. These four companies alone are responsible for 10% of all global warming since 1965, according to Globetrotter. Carbon capture technology, often touted as a solution, remains economically viable mainly for enhancing oil recovery – a practice some experts have derided as “Big Oil’s Large Grand Scam,” as Charles Harvey and Kurt House wrote in the New York Times.
As the world stands at this historic crossroads, the old fossil fuel lobby’s influence is waning, but not yet gone. The rapid decline in renewable costs and the surge in global investment suggest that, despite political resistance and lingering interests, the transition to a cleaner, cheaper energy future is finally underway. The question remains whether political will – particularly in the largest and wealthiest economies – will keep pace with the technological and economic realities now reshaping the world’s energy systems.
