and distributed resources, and the digitization of infrastructure. Furthermore, the need for flexibility 15 could triple by 2030 as a result of higher generation by renewables. That could require the development of new flexible capacity, such as energy storage and demand response (Exhibit 3). 16 Connections between wind power generation in northern Germany and the industrial clusters in the south of the country, for instance, remain limited, restricting the
up-to-date system could also ensure the security of the gas supply.
Potential challenges Three areas could prove particularly challenging:
1. Power. Annual grid investments of 40 to 70 percent more than the average over the past five years would be needed to support electrification, the integration of renewables
Exhibit 3 Energy flexibility volumes are likely to increase due to higher renewables generation in European countries.
EU renewables and balancing volumes ¹ 2017–21, by country and year, terawatt hours
200
Intermittent renewable-energy targets, ³ terawatt hours 2022 2030
Germany
160
Germany 186
525
120
Intermittent ² renewable- energy generation, terawatt hours
95
212
Spain
UK
80
Spain
94
235
UK
40
France
France
58
155
2022
2030
0
20
40
60
80
100
Balancing volumes, terawatt hours
¹ Balancing refers to intraday market volumes and activated control reserve (secondary and tertiary). 2 Intermittent is defined as wind and solar.
³ Germany figures are based on Easter legislation package, July 2022; Spain figures are based on the National Integrated Energy and Climate Plan, 2020; UK calculations based on British energy security strategy, April 2022; France figures are based on multinational energy planning targets, 2020 (targets are for 2028, not for 2030). Source: Renewable energy benefits: Measuring the economics , IRENA, Jan 2016; McKinsey Global Energy Perspective, 2022, accelerated transition scenario
McKinsey & Company
15 Intraday market and activated secondary and tertiary reserve. 16 Global Energy Perspective 2022 , McKinsey.
Accelerating the journey to net zero
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