Accelerating the journey to net zero

ACTION AREA 4 Reforming transmission

concerns by securing land leasing rights at a base rate and providing financial compensation to landowners and communities for the sites that are ultimately developed. While there is a long history of economic benefit for Midwestern farmers and ranchers who allow wind farms on

development to include proactive planning, fast-track permitting, and systematic consideration of transmission alternatives Transmission is critical to achieving a more orderly energy transition, given its role in connecting renewable power with the grid. We estimate that if transmission interconnection is not accelerated, there could be a supply gap of 175 gigawatts of renewables, which is equal to nearly 500,000 gigawatt-hours of zero-carbon electricity each year. Without transmission build-out, this 500 GWh shortfall and the additional renewables that are forecast to be needed could remain untapped. In addition, regions with poor renewables could face challenges in reaching the decarbonization goal. This situation is particularly acute in the Northeast (Exhibit 4). Transmission investment faces three primary complex barriers today: undervaluing necessary spending due to reactive planning processes and

their property, so-called good neighbor payments could help spread the benefit across communities.

8. Develop multiuse siting. Encouraging the siting of wind turbines on farmland and innovative agriculture practices alongside solar farms or creating public-use lands along transmission corridors could in some cases reduce the exclusionary impacts of energy- transition projects. This kind of mixed use is largely impossible with existing thermal- generating assets such as gas, coal, and nuclear power plants.

Exhibit 4 Regional variation in the availability of land for solar and wind suggests that transmission could be needed for a more orderly energy transition.

Share of land needed for development that will be available in 2030,¹ % For solar energy For onshore wind energy

2 4 6 8

10+

VT NH

KS NE IA SD

NJ CT MD DE RI DC

MO AK

TN NC KY

AL GA

¹Data for Alaska, Hawaii, and Washington, DC, are not included. Available land is defined as suitable for development across several metrics: land cover class, protected land, distance to airports, and land slope. For solar, this excludes all protected land, land within 0.02 miles of airports, and land with a slope greater than 2 degrees; it includes the following land cover classes: bare or sparse vegetation, shrubland, herbaceous vegetation, and open forest. For wind, this excludes all protected land, land within 8 miles of airports, and land with a slope greater than 11 degrees; it includes the following land cover classes: bare or sparse vegeta tion, shrubland, herbaceous vegetation, cropland, or open forest. These metrics consider changes in land available from 2022 to 2030. Capacity factor for solar is for fixed panels and crystalline-silicon (cSi) technology. Capacity factor for wind is for the Vestas V112 3 MW turbine at a 120-meter hub height. - Source: McKinsey analysis using the proprietary REMAP tool; McKinsey Global Energy Perspective Achieved Commitments Scenario

McKinsey & Company

Accelerating the journey to net zero

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