Benefits and costs The energy transition could offer broad economic benefits for the European Union—such as increased energy reliability, economic growth, and job creation—for example, by developing supply chains for renewables such as solar-photovoltaic (PV) manufacturing. McKinsey’s net-zero report shows that Europe’s cumulative incremental investments toward net zero could reach around €1.7 trillion by 2030, equivalent, in real terms, to 11 times the spending of the post–World War II Marshall Plan. Although the transition could eliminate six million
speed and scale of the transition would need to increase significantly (see sidebar “Europe’s starting point”). From 2019 to 2021, 4 EU power sector emissions decreased at less than half the rate necessary to stay on track for a 1.5°C pathway. The European Union would now need to triple its current pace of renewable-energy-source (RES) deployment to avoid a less orderly transition, which would be far more costly and damaging to the economy and the environment than one that balances affordability, reliability, resilience, and security.
4 European Electricity Review 2022 , Ember, February 1, 2022.
Europe’s starting point
The European Union depends on many energy sources beyond fossil
Union. 3 Historically, Russia has been the largest supplier of gas, accounting for more than 40 percent of the European Union’s imports in 2020. 4 Those imports were 54 percent lower in the first half of 2022. Nuclear power accounts for approximately 25 percent of EU electricity production; more than half of the total is produced in France. 5 Still, overall nuclear power production has fallen by 4 percent since 2019. 6 The European Union produced 37 percent of its power from renewable sources in 2021. By contrast, China produced
represented more than two-thirds of the European Union’s total renewable-energy generation, solar 14 percent, and solid biofuels 8 percent. 8 Still, the potential for renewables varies from country to country. Northern European ones, such as Denmark, 9 have a lower potential for solar PV than do countries in the south, such as Spain 10 and Italy. 11 Countries near the North Sea are well situated to capitalize on offshore wind potential: more than half of the 300 GW of offshore wind that the European Union aims to deploy by 2050 would be located there. 12
fuels, including nuclear, solar, and wind, though the mix varies from country to country. For example, the share of fossil fuels in Sweden (28 percent) and France (50 percent), which use more nuclear and hydropower, is lower than it is in Poland (92 percent). 1 About 37 percent of EU electricity generation comes from fossil fuels—largely coal, which generates up to 15 percent of the region’s total electricity. 2 Natural gas accounts for roughly 20 percent, and more than 80 percent of the supply is imported from outside the European
15 percent and the United States 12 percent. 7 Wind and hydropower
1 “Share of primary energy from fossil fuels,” Our World in Data, accessed July 11, 2023. 2 European Electricity Review 2022 , Ember, February 1, 2022. 3 “Europe relies primarily on imports to meet its natural gas needs,” US Energy Information Administration, February 11, 2022. 4 Gabriel Di Bella, Mark J Flanagan, Karim Foda, et al., Natural Gas in Europe: The Potential Impact of Disruptions to Supply , International Monetary Fund, July 19, 2022. 5 European Electricity Review 2022 , Ember, February 1, 2022. 6 Ibid. 7 “How much of U.S. energy consumption and electricity generation comes from renewable energy sources?” EIA, accessed July 11, 2023. 8 Renewable energy statistics , Eurostat Statistics Explained, January 2023. 9 Denmark: specific PV power output of 2.67–3.1 kWh/kWp.
10 Spain: 3.08–4.9 kWh/kWp. 11 Italy: 2.67–4.54 kWh/kWp. 12 Magnus Højberg Mernild, “Harnessing the North Sea’s green energy potential,” State of Green, May 17, 2022.
Accelerating the journey to net zero
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