- According to McKinsey & Company’s report, solar and wind will provide a cheaper option for operating fossil fuel plants by the end of the decade.
- Global energy demand recovery from the impacts of the pandemic could take 1-4 years.
- Pre-pandemic trends like reduced car ownership will influence the clean energy transition.
The future for renewable energy appears very bright in this decade. According to a recent report by U.S.-based management consultancy McKinsey & Company, the cost of installing solar and wind power will become lower than operational costs of fossil fuel plants.
The 2021 Global Energy Perspective report forecasts that total installed solar and wind power plants will constitute about 50 per cent of global power generation capacity by 2035. This growth will be driven by the increasing cost-competitiveness of renewables-powered green hydrogen by 2030.
The report also provides insights on the drive to lower carbon emissions over the next half-century by considering four future scenarios. Under a business-as-usual scenario, it predicts the world is currently “significantly off of the 1.5°C pathway,” For global temperatures of below 1.5C this century, global carbon emissions must be cut by 50 per cent in this decade and increasingly fall by 85 per cent by 2050.
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The report also presents two positive outlooks. One where the 1.5°C global heating pathway is followed and another where the transition to clean energy is accelerated. However, the worst-case scenario forecasts a situation where global policymakers prioritise economic recovery from Covid-19 over progressive clean energy transition-driven policies.
The report also notes that due to the pandemic, global energy demand recovery could take about 1-4 years. It is expected that electricity and gas demand will bounce quicker than oil.
The report also sees the continuation of pre-pandemic trends like reduced car ownership as a stronger driver for the clean energy transition than the pandemic’s impact.