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30 April 2022

McKinsey expects fossil fuels to peak by 2030

Renewables are projected to grow threefold by 2050, accounting for 50% of power generation globally by 2030, forecasts McKinsey & Company.

By Energy Monitor Staff

The energy transition is accelerating with the share of renewables in global power generation expected to double in the next 15 years and fossil fuel demand projected to peak before 2030, according to new research by consultancy McKinsey & Company.

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Wind Power Market seeing increased risk and disruption

The wind power market has grown at a CAGR of 14% between 2010 and 2021 to reach 830 GW by end of 2021. This has largely been possible due to favourable government policies that have provided incentives to the sector. This has led to an increase in the share of wind in the capacity mix, going from a miniscule 4% in 2010 to 10% in 2021. This is further set to rise to 15% by 2030. However, the recent commodity price increase has hit the sector hard, increasing risks for wind turbine manufacturers and project developers, and the Russia-Ukraine crisis has caused further price increase and supply chain disruption. In light of this, GlobalData has identified which countries are expected to add the majority of wind power capacity out to 2030. Get ahead and download this whitepaper for more details on the current state of the Wind Power Market.
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Global oil demand is projected to peak in the next three to five years, primarily driven by the uptake of electric vehicles, and the global energy mix is projected to shift towards low-carbon solutions with a particularly strong role for power, hydrogen and synfuels, according to the Global Energy Perspective 2022 report. 

Renewables are projected to grow threefold by 2050, predicts McKinsey. (Photo by Wang An Qi via Shutterstock)

Renewables are projected to grow threefold by 2050, accounting for 50% of power generation globally by 2030 and 80–90% by 2050, predicts McKinsey. Already 61% of new renewable capacity installation is priced lower than fossil fuel alternatives. Battery costs have also fallen by nearly half in the past four years.

The research also expects hydrogen demand to grow by four to six times by 2050, driven primarily by road transport, maritime and aviation; and hydrogen and hydrogen-derived synfuels to account for 10% of global energy consumption by 2050. Also, by 2050, carbon capture, utilisation and storage could grow more than 100-fold from today’s low base.

“In the past few years, we have certainly seen the energy transition pick up pace,” says Christer Tryggestad, a senior partner at McKinsey. “Every year we’ve published this report, peak oil demand has moved closer. Under our middle scenario assumptions, oil demand could even peak in the next three to five years, primarily driven by electric vehicle adoption.”

Nonetheless, despite net-zero commitments from governments and corporations, an 85% renewable power system by 2050, and the rapid uptake of EVs and decarbonisation technologies, McKinsey still forecasts global warming to exceed 1.7°C.

Free Report
img

Wind Power Market seeing increased risk and disruption

The wind power market has grown at a CAGR of 14% between 2010 and 2021 to reach 830 GW by end of 2021. This has largely been possible due to favourable government policies that have provided incentives to the sector. This has led to an increase in the share of wind in the capacity mix, going from a miniscule 4% in 2010 to 10% in 2021. This is further set to rise to 15% by 2030. However, the recent commodity price increase has hit the sector hard, increasing risks for wind turbine manufacturers and project developers, and the Russia-Ukraine crisis has caused further price increase and supply chain disruption. In light of this, GlobalData has identified which countries are expected to add the majority of wind power capacity out to 2030. Get ahead and download this whitepaper for more details on the current state of the Wind Power Market.
by GlobalData
Enter your details here to receive your free Report.

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