densely populated areas—to provide the land required for renewables. Solar requires roughly 10 to 20 times more land than gas, and onshore wind up to 200 times more, to generate the same amount of electricity.⁹ Overall, significantly larger investments will have to be made in the power grid to support the rollout of renewables. This could amount to an increase in investment of five to ten times historical levels.1 In addition, supply chain constraints and other factors, like the availability of craft labor, may lead to cost increases and delays in renewables projects. Depending on the degree to which the renewables industry manages to address these challenges, the share of renewables in power generation may range from very low (15 percent solar and wind by 2040 in the “current trajectory” scenario as laid out in the Global Energy Perspective 2022 ) to very high (70 percent solar and wind by 2040 in the “achieved commitments” scenario) (Exhibit 1). Across all scenarios, however, gas-fired power generation will play an important role: in a “less- renewables” scenario, gas-fired generation will be needed to meet higher electricity demand as renewables scale up; in a “more-renewables” scenario, gas-fired power generation can provide affordable and dispatchable power supply to balance out the intermittency of renewables.
To meet US decarbonization goals, this higher electricity demand must be met with a clean power supply. Power supply decarbonization can be achieved with a higher share of renewables in the grid (for example, solar and wind), alongside other low-emitting energy sources—such as nuclear, hydroelectric power, or gas-fired power generation with CCS. In virtually every decarbonization scenario and each independent system operator (ISO) in the United States, the share of renewable generation is expected to increase and coal generation is expected to decrease. Renewable growth is supported by federal policy and state-level decarbonization goals. At the federal level, the Inflation Reduction Act of 2022 directs roughly $400 billion in federal funding to renewables, also lowering carbon emissions by providing decarbonization incentives for operators throughout the energy value chain.⁷ Parallel to this, individual US states have set ambitious targets to achieve substantial decarbonization, with 22 states (representing around 45 percent of the US population) already having deep decarbonization targets of 80 to 100 percent by 2040 or 2050.⁸ There is no doubt that many challenges will need to be resolved to substantially increase renewables supply. For example, regulations around land access will need to be updated—especially around
Renewable growth is supported by federal policy and state-level decarbonization goals.
7 “The Inflation Reduction Act: Here’s what’s in it,” McKinsey, October 24, 2022. 8 McKinsey analysis based on industry figures.
9 Hannah Ritchie, “How does the land use of different electricity sources compare?” Our World in Data, June 16, 2022. 1 Life cycle assessment of electricity generation options , United Nations Economic Commission for Europe, 2021.
Accelerating the journey to net zero
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