A recent analysis by McKinsey & Company, titled “Tracking the energy transition: where are we now?”, underscores the mixed progress in renewable energy installations and the challenges that lie ahead in meeting global decarbonization targets. The report highlights that less than 15 percent of the low-emissions technologies necessary to align with the Paris Agreement goals for 2050 have been deployed, raising concerns about the pace of the energy transition.

The analysis, which expands on previous research from 2023 by including data from China and examining additional technologies such as battery energy storage systems (BESS) and nuclear energy, indicates that while there has been a significant increase in renewable energy capacity—585 GW or a 15 percent rise—there are still substantial gaps in project realization across key regions.

For instance, China has notably exceeded its 2030 solar photovoltaic (PV) target, adding approximately 300 GW since 2023, largely due to decreasing costs and the relative ease of deployment. In contrast, both Europe and the United States are projected to fall short of their offshore wind targets, with required additional capacities of 81 GW and 24 GW, respectively. The report also highlights that all three regions are likely to miss their 2030 offshore wind goals, with China needing an additional 89 GW.

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Despite the growth in renewable energy, the analysis reveals that many projects have not reached the final investment decision (FID) stage, which is critical for moving forward. This discrepancy between announced projects and those with secured funding poses a significant risk to achieving the interim goals set for 2030. The report notes that while investments in low-carbon technologies are substantial, the operational capacity combined with projects under construction still falls short of the necessary milestones.

Diego Hernandez Diaz, a McKinsey Partner and co-author of the report, emphasized the importance of understanding which technologies are on track to meet deployment benchmarks and which are not. He stated, “The progress landscape is nuanced by region and technology, and while achieving energy transition commitments remain paramount for countries and companies alike, recent announcements indicate that shifting priorities and slowing momentum have led to project pauses and cancellations across technologies.”

The report also provides insights into the current status of nine key decarbonization technologies across China, Europe, and the United States. Among the findings, the growth of BESS is highlighted as a critical area, although the current pipeline is insufficient to meet the 2030 targets. Hernandez Diaz pointed out that BESS can be deployed more quickly than traditional technologies like nuclear or gas with carbon capture, suggesting a potential path forward if the necessary investments are made.

As the world approaches 2030, the urgency for stakeholders to accelerate their efforts in renewable energy deployment becomes increasingly clear. With less than five years remaining to meet these critical targets, the findings from McKinsey’s analysis serve as a crucial indicator of the progress and challenges that lie ahead in the global effort to achieve net zero emissions by 2050.