2. The rise of intermittency The penetration of wind and solar in Europe’s power mix will grow dramatically. By 2030, these renewable sources, which are critical components of Europe’s decarbonization efforts, are expected to provide 60 percent of the continent’s energy capacity. This represents almost double the share in 2021, or an additional 760 gigawatts (GW) between 2021 and 2030 (Exhibit 3). Yet meeting this challenge will require a massive build-out of new facilities. For example, in Germany, annual new-construction rates will have to triple compared with the 2018–21
period. 12 But this won’t be easy—policy makers, regulators, and renewables developers will have to navigate scarcities in supply of both suitable land and talent with needed skills, as well as enduring supply chain issues and shortages of raw materials. 13 In addition, because wind and solar generation is subject to natural variations and thus provides intermittent sources of green power, balancing resources (such as hydrogen, batteries, demand- side response, and biomass) will also be required.
Exhibit 3 Renewables will reach 60 percent of capacity in Europe by 2030.
Installed capacity in main European markets 1 under accelerated energy transition, gigawatts
Share of intermittent RES 2 in overall installed capacity
36%
49%
60%
64%
Coal Nuclear Biomass Offshore wind Other Battery Intermittent RES 2
2,503
1,908
1,300
Solar
1,072
Onshore wind
Gas Hydro
2021
2025
2030
2035
1 Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and United Kingdom. Includes hydrogen demand. 2 Renewable energy sources. Source: McKinsey Power Solutions EU Power Model, November 2022
McKinsey & Company
12 Market Master Data Register; German Renewable Energy Sources Act (2023); Fraunhofer ISE (2021, 2022). 13 “Renewable-energy development in a net-zero world,” McKinsey, October 28, 2022.
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