the Fit for 55 target of a 45 percent share of renewables in the energy mix would require a massive redeployment of labor. Almost one million full-time skilled workers would be needed in 2030 just to develop and construct centralized renewable-energy assets. That is more than triple the number needed today. In addition, though new nuclear plants could be commercially viable for decarbonization in the medium to long term, the technical skills and capabilities needed to develop them are very scarce.
Union would need to bridge the current large cost gap: solar modules made in the region are currently 25 to 30 percent more expensive than those made in China. 14 3. Labor. A shortage of labor could also hamper a more orderly energy transition in Europe. The expected surge in wind and solar installations, for example, could make them difficult to staff with qualified development and construction employees, as well as operations and maintenance workers. Reaching
Exhibit 1 Rare earth metals needed for wind turbines and electric vehicles are highly dependent on China’s refining capacity. Global expected demand and refined supply development, by rare element, 1 indexed to 2020 demand Neodymium Praseodymium
400
400
Expected global neodymium refining capacity from China, %
Expected global praseodymium refining capacity from China, %
Demand
350
350
Demand
300
300
2.2×
85
85
2.0×
250
250
Expected supply
62
62
Expected supply
200
200
150
150
Known supply
Known supply
100
100
2020
2030
2020
2030
2020
2025
2030
2020
2025
2030
1 Based on expected growth of existing capacity and known new projects. Capacity of known new projects based on estimated probability of these projects being active, eg, if a project is still in the exploration phase, the probability of it coming live is lower than if it is in a detailed feasibility study phase. Based on base supply and unknown late-maturity projects or projects not yet developed but that are expected to happen toward 2035. Source: Company websites for new projects related to supply; Grand View Research; Research and Markets; McKinsey Electric Vehicle Perspective; McKinsey Wind Turbine Perspective; McKinsey Global Energy Perspective, 2022
McKinsey & Company
14 Global Energy Perspective 2022 , McKinsey, April 26, 2022.
Accelerating the journey to net zero
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