The paper is structured as follows. In the next section, we will briefly describe a set of renewable energy technologies and give evidence of sustained double-digit growth rates in the market for the new technologies. Section 3 provides elements of an analytical framework for studying how these new technologies may transform the energy sector. We emphasise that we need to apply an innovation system perspective when we analyse the processes of innovation and diffusion, and that the emergence of a new, or transformed, energy system is a slow, painful and highly uncertain process. The analytical framework clearly departs from the conceptualisation of the process of technical change, which is found in some of the literature on the timing of policy intervention for the purpose of reducing the emission of greenhouse gases. The final section outlines a set of issues which need to be researched if we are better to understand the transformation of the energy system into one which incorporates a larger share of renewable energy technology. These issues are the creation of variety, the process of institutional change and the emergence of “prime movers”.