McKinsey: US and Europe requires nearly 200GW of new clean energy installations

While there is growing support for new renewable power projects across Europe and the US, these regions could need to announce close to 200GW of new clean energy capacity by 2030 to meet the world’s energy transition goals.

This is the conclusion of US analyst McKinsey & Company, which published its assessment of the world’s clean energy commitments, compared to the scale of investments needed to meet climate change targets, in a report this week. ‘The energy transition: Where are we, really?’ argues that in an “increasingly complex and uncertain global energy space,” greater investment into renewable energy capacity will be needed to meet the targets set by the Science-Based Targets Initiative.

The analyst notes, for instance, that in the US and Europe—which includes EU members, plus Norway, Switzerland and the UK—there will need to be around 1.6TW of solar and wind generation capacity either in operation, or having reached financial close, by 2030.

While final investment decisions (FIDs) have been reached on just over 705GW of solar capacity, 3% more than the 2030 target set by McKinsey, the report notes that the US and Europe will need to reach FIDs for an additional 195GW of wind capacity in order to meet the 2030 targets.

The need for greater investment comes at a time when there are already record-breaking levels of money pouring into the renewable energy sector, particularly the solar industry. A report from the International Energy Agency (IEA) found that solar PV investment is expected to reach over US$500 billion this year, more than any other electricity generation technology, and generating yet more investment in the industry could prove a challenge. This is to say nothing of the risks associated with such investments, with a number of new buyers and sellers entering the solar space, without extensive experience in making such deals.