Net zero by 2035: A pathway to rapidly decarbonize the US power system
The green grid: How nations and utilities are rethinking power systems
• Down to the wires. In Europe, recent energy shortages have reinforced why some nations and utilities are increasingly expanding electricity-transmission networks to better match supply and demand. Although renewable-electricity generation in the region is on the rise, most grids aren’t yet equipped to distribute renewable power across long distances—national borders or bodies of water, for example. Government and industry investment in undersea wiring could grow the value of the market to €5.5 billion in 2022, up from €4.5 billion in 2021. [Economist]
• Changing winds. According to a new report from the International Energy Agency (IEA), the deployment of clean-energy technologies such as wind and solar is happening fast enough that the global use of fossil fuels could peak within the next several years. Still, to prevent the most catastrophic effects of climate change, the IEA estimates that global investments in clean energy need to triple over the next decade, to $4 trillion annually. [NYT]
Decarbonizing electricity is essential to enabling decarbonization in other sectors, such as transportation and buildings.
• Why it matters. In April 2021, the United States set a target to create a “carbon-pollution-free power sector by 2035.” The transition to a net-zero power system in the US will likely require building out new sources of power generation, the transmission infrastructure to interconnect that generation, and increased grid flexibility. One sign the transition is under way: renewable technologies such as solar and wind are already cost competitive with coal and gas across most US markets.
• Power moves. McKinsey research has identified ten strategic shifts that could help the US power sector meet its net-zero carbon-emission goals, including scaling supply chains for wind and solar, strengthening grid resiliency for extreme weather events, and building a national transmission network for hydrogen and captured carbon. Check out our article for more big moves electric-power and natural-gas leaders can make.
→ Edited by Andrew Simon