GlobalEnergy

Perspective2024

September2024

Aboutthisreport

TheGlobalEnergyPerspectiveisproducedbyEnergySolutions,partofMcKinsey’sGlobal

Energy&MaterialsPractice,inclosecollaborationwithMcKinsey’sSustainabilityand

AdvancedIndustriespractices.McKinseyiscommittedtoourpositionthattheworldrequiresamajorcoursecorrectiontoreachclimategoalsalignedwiththeParisAgreement,andour

researchisfocusedonhelpingglobalstakeholdersmeetthosetargets.

TheGlobalEnergyPerspective2024offersadetaileddemandoutlookfor68sectorsand

78fuelsacrossa1.5°pathway,assetoutintheParisAgreement,aswellasthreebottom-

upenergytransitionscenarios.Thescenarioshavebeenredesignedthisyeartobetter

reflectchangingglobalconditions,includinggeopoliticalchallenges,increasinglycomplex

supplychains,andhigherinflation.Together,theyexplorepotentialoutcomes,rangingfrom

asustainabletransformation—aplausiblescenariowheresustainabilitybecomesaglobal

priorityandnationscoordinatetowarddecarbonization,despitethechallenges—througha

continuationofthecurrentenergytransitionmomentum,toaslowerevolutioncharacterizedbyafragmentedresponsetodecarbonization.Dataforthesescenarioscomefromavariety

ofsources,includingtheInternationalEnergyAgency(IEA),theEnergyInstitute,Eurostat,theIntergovernmentalPanelonClimateChange(IPCC),OxfordEconomics,theUnitedNations,

theUSDepartmentofAgriculture(USDA),andtheUSEnergyInformationAdministration,amongothers.

Thisbroadrangeofscenariosisintendedtoshowtheimplicationsofdifferentpathwaysand

toprovideafactbasetoinformdecisionmakers.However,thesescenariosarenotexhaustiveintherealmofallpossibleoutcomes,norwillanyindividualscenariounfoldexactlyaswe

describeit.Incertaincasesinthisreport,wemayhighlightaparticularscenariothatbest

illustratesatrend,butthisdoesnotmeanthatwebelievethisscenarioismoreorlesslikelytoreflecttheactualoutcome.Theinsightsinthisreportarebasedoncurrentlyavailabledata,

butmultiplefactorscouldinfluencereal-worldoutcomesastheenergytransitioncontinuestoadvance.

AboutEnergySolutions:EnergySolutionsisMcKinsey’sglobalmarketintelligenceand

analyticsgroupfocusedontheenergysector.Thegroupenablesorganizationstomake

well-informedstrategic,tactical,andoperationaldecisionsbyusinganintegratedsuiteof

marketmodels,proprietaryindustrydata,leadingindustrybenchmarks,advancedanalyticaltools,andaglobalnetworkofindustryexperts.Itworkswithleadingcompaniesacrossthe

entireenergyvaluechaintohelpthemmanagerisk,optimizetheirorganizations,andimproveperformance.

AbouttheGlobalEnergy&MaterialsPractice:McKinsey’sGlobalEnergy&Materials

Practicedeploysitsdeepinsights,functionalcapabilities,andproprietarybenchmarkand

datasolutionsacrosstheconvergingenergy,materials,andnaturalresourcessupplychainstohelpcreatesubstantialandlong-lastingvalueforstakeholders.Guidedbyadvanced

analyticsandthepowerofaglobalteam,itbringsdistinctiveindustryperspectivesacross

sectorsthatsupporttoday’scriticalinfrastructureecosystems.Thepracticeisproudtohavepartneredwithhundredsofmajorindustryplayersastheleadingandmostintegratedadvisoronstrategicandfunctionaltransformations,enablingclientstoacceleratedecarbonization

andrealizetheenergy,materials,andfoodtransitions.

AboutMcKinsey&Company:McKinseyisaglobalmanagementconsultingfirmcommittedtohelpingorganizationsacceleratesustainableandinclusivegrowth.Thefirmworkswith

clientsacrosstheprivate,public,andsocialsectorstosolvecomplexproblemsandcreatepositivechangeforalltheirstakeholders.Itcombinesboldstrategiesandtransformativetechnologiestohelporganizationsinnovatemoresustainably,achievelastinggainsin

performance,andbuildworkforcesthatwillthriveforthisgenerationandthosetocome.

2GlobalEnergyPerspective2024

GlobalEnergyPerspective2024:Foreword

WhilesignificantprogresshasbeenmadeinthenineyearssincethelandmarkParis

we,really

?,”thereisapersistentandgrowinggapbetweenlow-carbontechnologyproject

Agreement,theglobalenergytransitionisenteringanewphase,markedbyrisingcosts,

commitmentsandrealization,withasignificantproportionofannouncedprojectsnot

complexity,andincreasedtechnologychallenges.Tosuccessfullynavigatethisnextphase

reachingfinalinvestmentdecision(FID).5Corporate,public,andprivateinvestorsarehesitant

andmeettheParisAgreementgoals,urgentactionwillberequiredandthepaceofchange

aboutdeployingcapitalduetosofteningbusinesscases,technologycost-competitiveness,

mustaccelerate.1Thecleanenergytransitionwillalsoneedtobebalancedwithaffordability,

andproject-enablingandmarket-formingpolicysupport.Valuechainsremainconstrained

energysystemresiliency,andenergysecurityinanincreasinglyuncertainmacroeconomic

acrossalllow-carbontechnologies,impactingtheavailabilityofeverythingfrombasic

environment.

materialstoequipment.Consequently,fossilfuelswillcontinuetosupplygrowingenergydemandacrossallourbottom-upscenarios.

Despitesignificantglobalpublicandprivatesectormomentumgroundedinincreasingly

ambitiouspolicies,overcomingmajorphysicalchallengesiscrucialtotransformtoday’slarge

Successfullynavigatingthetransitionawayfromfossilfuelswillrequirefocusingbeyond

andcomplexenergysystem.Newlow-carbontechnologieswillhavetobedevelopedand

asinglesolutionortechnology.Therearenosilverbullets—thefuturecallsforaholistic

deployed,alongwithentirelynewsupplychainsandinfrastructuretosupportthem.While

transformationoftheglobalenergysystembyincorporatingarangeofprovenandemerging

thecostoflow-carbontechnologieshascontinuedtodeclineinmostregions,inMcKinsey

levers.Todothis,considerationsbeyondtechnologicalfeasibilitywillneedtobeaddressed,

GlobalInstitute’srecentreport,“

Thehardstuff:Navigatingthephysicalrealitiesoftheenergy

transition

,”itisestimatedthatonly10percentofthetechnologiesrequiredgloballyby2050havebeendeployed.Mostoftheseinpromisingusecasesor“l(fā)ow-hangingfruit”where

spanningcapitaldeployment,improvingbusinesscases,ensuringeconomicreturns,

adjustingregulation,andestablishingcontinuedpoliticalandpublicsupportinthefaceofcompetingeconomicandsocietalpriorities.

policyandfundinghavebeenmostplentiful.2Forexample,renewableenergysources(RES)

haveseensignificantsuccess.InEurope,solarphotovoltaic(PV)deploymentisontrack

Thisreportpresentsaviewoftheroadaheadtoserveasafactbaseforstakeholders

tomeet2030targetsandsolarPVbuild-outinSpainsitsataround30gigawatts(GW)of

tonavigatetheopportunitiesandchallengesofthisnewphase.Itdoesnotconstitute

installedcapacity,whichcoulddoubleby2030atthecurrentgrowthtrajectory.3Chinahas

McKinsey’sviewonwhatshouldhappen,butratherpresentsarangeofscenariosthatcould

alsoreportednotableachievementsinlow-carbontechnologydeployment,withmoresolar

plausiblyplayout,basedonthebestdatacurrentlyavailable—recognizingthattheenergy

capacityandelectricvehicles(EVs)addedlastyearthanbytherestoftheworldcombined.4

transitionisanextremelycomplexundertakinginfluencedbymultiplefactors.Thecriticalquestionthisresearchaimstoaddressishowtheworldcanachieveastepchangeinits

Bycontrast,anewwaveoflessmaturetechnologiesfacescoststhatmayinhibitlarge-scale

deployment.AshighlightedinMcKinsey’srecentarticle,“

Theenergytransition:Whereare

effortstowardmeetingnet-zerogoalsandavoidtheworstimpactsofclimatechange.

1Formoreonthetrade-offsassociatedwiththeenergytransition,see

MekalaKrishnan

,

DanielPacthod

,and

SvenSmit

,“Affordability,reliability,andindustrialcompetitivenesswillmakeorbreakthenet-zerotransition.Here’show,”McKinsey,March14,2024.

2Thehardstuff:Navigatingthephysicalrealitiesoftheenergytransition,”McKinseyGlobalInstitute,August14,2024.

3“TheIberiangreenindustrialopportunity:Electrificationandrenewables,”McKinsey,July31,2024.

4GlobalEVoutlook2024,IEA,April2024;"Electricity2024,"IEA,January2024.

5“Theenergytransition:Wherearewe,really?,”McKinsey,August27,2024.

3GlobalEnergyPerspective2024

4GlobalEnergyPerspective2024

GlobalEnergyPerspective2024:Ourperspectiveredesigned

GlobalEnergyPerspectiveintelligencenetwork

OurfuIIyintegratedsuppIyanddemandperspectiveincorporatesenergydemand

driversfromMcKinseyIsbroaderresearchteamswiththeEnergy&MateriaIsPractice’ssuitesofmarketinteIIigencemodeIs

Modelsuitecategories1Energydemand

?ChemicaIs

?IndustryandbuiIdings

?Maritimeandaviation

?Power

?Roadtransport

Fossilfuelsupply

Energy

demanddrivers

?Mobility

(viaMcKinsey

Centerfor

FutureMobiIity)

?Macroeconomics(viaMcKinsey

GIobaIInstitute)

?Petrochemicals(viaChemicaI

Insights)

Fossilfuel

supply

Energy

demand

Integrated

energy

implications

Electricity

supply

ModeIsuites

Low-carbon

fuelssupply

?GasandLNG

?Midstreamandservices

?NorthAmericaoiIandgas

?OiIandIiquids

?Re?ningactivityandmarginsElectricitysupply

?PowergenerationandpricingLow-carbonfuelssupply

?CCUS2

?Hydrogen

?SustainabIefueIs

Integratedenergyimplications

?Energyassetdecarbonization

?EnergyvaIuepooIs

?Greenpowerprocurementoptimization

?IndustriaIeIectri?cation

?MetaIssuppIyanddemand

1Non-exhaustive;onIymajormodeIsuiteswithIinkagetoGIobaIEnergyPerspectiveareshown.2Carboncapture,utiIization,andstorage.

6Allscenariosassumeaconsensusviewofaround2.3percentglobalGDPgrowthperyearbetween2023and2050;(OxfordEconomics;McKinseyanalysis).

Globally,net-zerotargetshaveproliferated,and

commitmentsandenthusiasmforreachingnetzeroareontherise.However,thecrucialtransitiontechnologiesneededtoachievethesetargetsarestillnotbeing

deployedattherequiredspeed.Inthenextphaseoftheglobalenergytransition,low-carbontechnologiesneedtoscaleupinanenvironmentwherecapitalavailabilityisdecreasinginlightofelevatedinterestratesand

geopoliticaldevelopments.Toconsiderthisevolvingglobalenvironment,wehaveredesignedourenergytransitionscenarios6to:

?presentarangeofplausiblefutures,anchoredon

credibleinputassumptionsandtheextrapolationofcurrenttrends

?betterreflectthecomplexityoftheenergy

transition,whichisdrivenbymultiplefactors

?beusedasabaselinetomodeladditionalshockstothesysteminfuture,suchasgeopoliticalchanges

Ourupdatedscenariosareprimarilydifferentiatedoverninedimensionsacrossthreebroadareasthatcould

determinetheevolutionoftheenergytransition:

?Policy:Policyambition,energysecurity,andimpliedCO2price

?Technologydevelopment:Efficiencygains,technologycostlearningcurves,andnoveltechnology

?Potentialconstraintsforrenewables

deployment:Technologybottlenecks,gridbuild-out,andnuclearbuild-out

5GlobalEnergyPerspective2024

McKinsey’sGlobalEnergyPerspective2024exploresa1.5°pathwayandthreebottom-upenergytransitionscenarios

Scenariosreflectthepaceoftechnologicalprogress,levelofpolicyenforcement,andpotentialconstraintsforrenewablesdeployment

Globalgreenhousegasemissions,1GtCO?equivalentperannum

60

50

Slow

Evolution

40

30

ContinuedMomentum

20

Sustainable

Transformation

10

1.5opathway

0

1990200020102020203020402050

Projectedglobaltemperatureincreaseby2050,oC

<1.5

1.5°pathway

~1.8

SustainableTransformation

~2.2

ContinuedMomentum

~2.6

SlowEvolution

FasterSpeedofenergytransitionSlower

Note:1.5°pathwaymodeledaspartofMcKinsey’sClimateMathefort;otherscenariosmodeledbottom-upaspartofMcKinsey’sGlobalEnergyPerspective2024.

1Includesprocessemissionsfromcementproduction,chemicalsproductionandre?ning,andnegativeemissionsfromapplyingcarboncapture,utilization,andstorage(CCUS).

Source:McKinsey,September,2024

7Thewarmingestimateisanindicationoftheglobalriseintemperatureby2100versuspre-industriallevels,basedonMAGICCv7.5.3asusedinIPCCAR6,giventherespectiveenergyandnonenergy(forexample,agricultureanddeforestation)emissionlevelsandassumingthecontinuationoftrendsafter2050butnonet-negativeemissions.The

remainingemissionsin2050(approximately4gigatons[Gt])arecompensatedbynegativeemissionsfromdirectaircarboncaptureandsequestration(DACCS),bioenergywithcarboncaptureandstorage(BECCS),andreforestation.

1.5°pathway

Underthisscenario,a1.5°pathwayisadopted

globally.Internationalcooperationismobilizedto

rapidlyscaledecarbonizationtechnologies,releaselarge-scaleinvestments(includinginemerging

economies),andshiftbehavior.Limitingwarming

to1.5°Ciskeytoavoidingtheworstimpactsof

climatechangeanddoingsowouldrequirestayingwithina570gigaton(Gt)carbonbudget,reducingCO2emissionsby50percentby2030compared

tocurrentlevels—andreachingnet-zeroemissionsby2050.Othergreenhousegases,especially

methaneandnitrousoxide,wouldalsoneedtobe

steeplyreduced.Achievinga1.5°pathwayrequiresasubstantialdeparturefromcurrenttrendsand

significantchangestotheenergydemandmix,

paceofdecarbonization,andinvestmentinto

nascenttechnologies,butisstillpossiblewithrapidglobalactionacrossalleconomicsectors.

Projectedglobaltemperatureincreaseby

20507:<1.5°C

6GlobalEnergyPerspective2024

McKinsey’sGlobalEnergyPerspective2024exploresa1.5°pathwayandthreebottom-upenergytransitionscenarios

Scenariosreflectthepaceoftechnologicalprogress,levelofpolicyenforcement,andpotentialconstraintsforrenewablesdeployment

SustainableTransformation

TheSustainableTransformationscenariochartsa

pathwaytodecarbonizationbasedoncurrentglobal

economicconditionsandtechnologymaturityand

viability.Here,nationsintensifytheircommitment

tosustainability,withincreasingglobalcoordination

toalleviatebottlenecks,unlockinvestmentpledges

forlow-carbontechnologies,andimproveenergy

efficiencyaboverecenthistoricallevels.Global

cooperationtodecarbonizeisunderscoredbythe

creationofcross-regionalfinancing,withnations

adoptingcost-efficientpoliciestoreduceemissions.

However,despitethismomentum,practicalconstraintsimposecertainlimitsonthepaceofcleantechnology

adoption.Forthisscenariotomaterialize,several

economicandtechnologicalissueswouldneedtoberesolved,andinterimtargetsmightnotbemetifnotplausibleundertheseassumptions.

Projectedglobaltemperatureincreaseby2050:

~1.8°C

ContinuedMomentum

IntheContinuedMomentumscenario,nations’focus

onsustainabilityisbalancedbyotherfactors,includingaffordabilityandsecurityofenergysupply,withsome

emergingeconomiesmostlyprioritizingaffordability

andsecurityofsupplyoversustainability.Technology

andefficiencyimprovementslargelyfollowcurrent

trends,drivenbyeconomicswherepracticalconstraintspersistinthewidespreadadoptionoflow-carbon

technologies.Thisscenariolargelymirrorscurrent

trendsandassumestheywillcontinue,resultingin

unevendeploymentoflow-carbontechnologiesacrosstechnologytypeandregions.ThisscenariowouldfailtomeetthekeygoalsoftheParisAgreement,creatinga

rangeofnegativesocial,environmental,andeconomiceffects.

Projectedglobaltemperatureincreaseby2050:

~2.2°C

SlowEvolution

TheSlowEvolutionscenarioseeslocaldecisionmakingfocusedon(domestic)energyaffordabilityandsupply

security,relegatingsustainabilitytoasecondary

priority.Thisfragmentedresponsetodecarbonizationleadstoadecreaseinpriorlow-carboninvestments,

resultinginreducedinvestmentsintolow-carbon

technologyandlowerCO2prices,which,inturn,leads

tosignificantenvironmental,economic,andsocial

impacts.Starkgeographicdifferencesemergeinthis

scenario,withsomecountriesandregionsmakinggoodprogresstowarddecarbonizationtargets,whileotherslagbehindsignificantly.ToanevengreaterextentthantheContinuedMomentumscenario,ifthisscenario

materializes,thekeygoalsoftheParisAgreement

willnotbemet,creatingarangeofseveresocial,environmental,andeconomiceffects.

Projectedglobaltemperatureincreaseby2050:

~2.6°C

7GlobalEnergyPerspective2024McKinsey&Company

Ouranalysisofthedatashowsglobalemissionsto2050

remainingabovea1.5opathway—evenifallcountriesdeliveroncurrentcommitments

Knock-oneffectsandregionaldifferencescoulddrivesignificantlyhighertemperatureincreases

Globalgreenhousegasemissions,1GtCO?equivalentperannum

60

50

40

30

20

10

54

53

51

46

46

35

30

18

8

Slow

Evolution

ContinuedMomentum

Sustainable

Transformation

1.5opathway

0

1990200020102020203020402050

Note:Warmingestimateisanindicationofglobalriseintemperatureby2100versuspre-industriallevels,basedonMAGICCv7.5.3asusedinIPCCAR6giventherespectiveenergyandnon-energy(eg,agriculture,deforestation)emissionlevelsandassumingcontinuationoftrendsafter2050butnonet-negative

emissions.Theremainingemissionsin2050(ie,~4Gt)arecompensatedbynegativeemissionsfromdirectaircarboncaptureandsequestration(DACCS),bioenergywithcarboncaptureandstorage(BECCS),andreforestation.

1Includesprocessemissionsfromcementproduction,chemicalproductionandre?ning,andnegativeemissionsfromapplyingcarboncapture,utilization,andstorage(CCUS).

Source:IEAGlobalEnergyReview2022;IEAWorldEnergyBalances

Increasedenergydemandandthecontinued

roleoffossilfuelsintheenergysystemmean

emissionscouldcontinuerisingthrough2025to

2035.Emissionshavenotyetpeaked,andglobalCO2emissionsfromcombustionandindustrial

processesareprojectedtoincreaseuntilaround2025underallourbottom-upscenarios.The

scenariosbegintodivergetoward2030,withallshowingadeclineinemissionsby2050.Despitethisprojecteddecline,2050emissionsarestillmeaningfullyabovenet-zerotargetsacrossall

scenarios.

Theemissionsdeclineisdrivenprimarilyby

economicfactors,particularlytheincreasingcost-

effectivenessoflow-carbontechnologyinsectors

suchaspowerandroadtransport.Forexample,

solarphotovoltaic(PV)deploymentinEuropeison

tracktoreach2030targets,whileChinaismaking

stridesinbothsolarandelectricvehicle(EV)

adoption.Policyandregulationswillalsocontinuetocontributetotheadoptionoflow-carbontechnologyandsupportadeclineinemissions.

Inallourbottom-upscenarios,risingemissions

wouldleadtoglobaltemperatureincreasesabove

1.5°Cby2050,fromaround1.8°CintheSustainableTransformationscenario,througharound2.2°C

inContinuedMomentum,toaround2.6°CinSlowEvolution.

8GlobalEnergyPerspective2024

Keyinsightsfromouranalysis

Eightimportantinsightsflowfromouranalysisinthisyear’sGlobalEnergyPerspective

1

Despitepolicyinnovations,increasingglobalconsensus,andgrowingprivate-sectorcommitments,emissionsarenotdecliningattheraterequired

Globally,emissionsarerisingandareprojectedtopeakbetween2025and2035before

beginningtodecline,butwouldstaywellabovethecarbonbudgetfora1.5°Ctrajectory.Thisis

despitetheimplementationofnumerouscarbon-mitigatingpoliciesthathavetranslatednet-zerocommitmentsintolegislationsincetheParisAgreement,alongsideincreasingglobalconsensus

arounddecarbonization—withcountriesaccountingformorethan90percentofglobalGDPnow

havingnet-zerocommitmentsinplace—aswellasgrowingprivate-sectorcommitments.While

enactingeffectivepolicytoovercomeacomplexandmultifacetedissuesuchascurbingemissionsischallenging,policyandothergovernmentactionisacrucialcomponentofenablingtheenergy

transition.Inmanycases,macrolevelclimatetargetsareambitious(suchasEUandUSnet-zero

commitmentsby2050)butthesemaynotbesufficientlytranslatedatlower-levelregionsand

jurisdictions.Localinternalcombustionengine(ICE)bansorREStargets,forexample,canmeet

oppositiononthegroundduetoconsumeraffordability,gridcongestion,andmanufacturing

capacity.Additionally,risingenergydemandinemergingeconomies,particularlyintheAssociationofSoutheastAsian(ASEAN)countries,India,andtheMiddleEast,meanscarbon-mitigating

policyintheseregionswillbeimportantincurbingemissions.Thatsaid,net-zerogoalsinthese

regionstendtostretchfurtherintothefuturethaninmorematureeconomies.Otherdifferencesbetweenmatureandemergingeconomiesarealsostillprominent,suchasinthefinancingoflow-carbontechnologies.Takingallofthisintoaccount,existingpolicyandlegislationmayneedtobereexaminedtoenabletheenergytransitionatspeedandatscale.

2

Energydemandisprojectedtogrowbyupto18percentthrough2050

Overthenexttwodecades,ouranalysisshowsthatglobalenergydemandcompositionwillshift,mainlydrivenbygrowthinenergyconsumptionfromemergingeconomies.Thisdemandgrowth

isprimarilyduetoincreasingpopulations,risingGDP(andenergyconsumption)percapita,and

thegrowthandrelocationofmanufacturingindustriestoemergingeconomies.Nevertheless,

percapitaconsumptionintheseregionsisprojectedtoremainbelowthatofmatureeconomies,

drivenbyincreasingenergyefficiency,suchasswitchingfromfossilstolow-carbonenergy

sourcesinASEANcountriesandelectrificationinChina.Inmatureeconomies,aswellasinChina,overalldemandisprojectedtoflattenintheshorttomediumterm.However,thereareseveral

forcesatworkthatcouldaffectthedemandtrajectoryindifferentregions.IntheUnitedStates,

industrialresurgencewoulddrivedemandgrowththroughelectrification,whileinEurope,by

contrast,continueddeindustrializationwouldleadtodecliningdemandintheregion.Globally,newdemandsources,suchasdatacenters(drivenbytheriseofAI),arealsoprojectedtocontributetoincreaseddemand.

9GlobalEnergyPerspective2024

Keyinsightsfromouranalysis

Eightimportantinsightsflowfromouranalysisinthisyear’sGlobalEnergyPerspective

3

Fossilfueldemandcontinues,withapreviouslyanticipatedpeakinthelate2020snowturningintoadecade-spanningplateau

Thebuild-outofcleanenergytechnologieshasnotbeenfastenoughtosupplygrowingglobal

energydemand.Consequently,fossilfuelswillcontinuetobeusedacrossallourbottom-up

scenarios,meeting40to60percentofglobalenergydemandby2050.Continuedoildemand

isprojectedtobedrivenprimarilybyaslowdowninEVadoptionrelativetohistoricalnumbersin

somegeographies,duetohighcostsandrolloutchallenges.Gaswillcontinuetobeusedforpowergenerationtoprovidefirmnessforanenergysystemwithincreasedpenetrationofintermittent

renewables,andgasdistributionforheatingwillbemigratedtoelectricloadoverthemedium

tolongterm.Overall,fossilfueldemandisexpectedtoplateaubetween2025and2035before

declining,withthetimingandrateofthedeclinedifferingbyscenario.Thisdemandpicturemeansfossilfuelinvestmentswillcontinueacrossscenariosandremainacriticalpartoftheenergy

landscapetosupportanorderlyenergytransitionthatisaffordable,reliable,andcompetitive.

4●

Low-carbonenergysourcesaresettogrow,butnotcurrentlyfastenoughtomeetnet-zerogoalsduetobusinesscaseviabilityandotherchallenges

Low-carbonenergysourcesareprojectedtogrow,accountingfor65to80percentofglobal

powergenerationby2050.However,thisgrowthisnotfastenoughundercurrentconditionsto

meetshort-termdeploymenttargets.Growthratesarealsoprojectedtodifferbytechnology.

Thosetechnologiesforwhichthelevelizedcostofenergy(LCOE)isalreadylowatthepointof

production,suchassolar,wind,andenergystoragesystems,areprojectedtocontinuetogrow,

whilethosewithhighercost—includinghydrogenandothersustainablefuels,andcarboncapture,utilization,andstorage(CCUS)—lacksufficientdemandandpolicysupportforstronggrowth.

Solarstandsoutwithparticularlystronggrowthprojections,whilehydrogengrowthto2050hasbeenreviseddownwardby10to25percentcomparedtopreviousestimatesduetohighercostprojections.Overall,low-carbonenergysourcesfaceseveralchallengesthatcouldthreatennet-zerogoals,andwhichareparticularlypronouncedforthosewithhigherLCOE.Weakbusiness

casesfornewinstallationswherefuturerevenuesandtechnologycostsareuncertainputtheprojectpipelineatrisk.Otherchallengesincluderisingcapitalcosts,longerprojecttimelines,andtheneedforgridbuild-out.Forinstance,intheEuropeanUnionandtheUnitedStates,alloperational,under-construction,andannouncedon-andoff-shorewindcapacitymaystillbe

200GWshortof2030targets.Overcomingthesehurdlescouldrequirethesupportofdurable

andflexiblepolicytofacilitatecontinueddeployment.Ouranalysissuggeststhatallelements—

includingrenewableenergy,otherlow-carbonenergysources,energyefficiencygains,andcarboncapture—willberequiredtoachievethegoalsofthetransitionwhileprovidingenergysecurity.

10GlobalEnergyPerspective2024

Keyinsightsfromouranalysis

Eightimportantinsightsflowfromouranalysisinthisyear’sGlobalEnergyPerspective

5

Nuclearcouldplayasignificant