《麦肯锡:推动欧洲有序能源转型之路的五大关键行动领域(2023)(英文版)(21页).pdf》由会员分享,可在线阅读,更多相关《麦肯锡:推动欧洲有序能源转型之路的五大关键行动领域(2023)(英文版)(21页).pdf(21页珍藏版)》请在三个皮匠报告上搜索。
1、August 2023Electric Power and Natural Gas Practice and Sustainability PracticeFive key action areas to put Europes energy transition on a more orderly pathTo fulfill its ambitious net-zero agenda,the European Union would need to significantly increase the speed and scale of the transition while ensu
2、ring affordability,security,and growth.This article is a collaborative effort by Tommaso Cavina,Lorenzo Moavero Milanesi,Hamid Samandari,Humayun Tai,and Raffael Winter,representing views from McKinseys Electric Power and Natural Gas Practice and Sustainability Practice.The 27-member European Union h
3、as long been a leader in the global energy transition,thanks to strong support for clean technologies and an ambitious decarbonization agenda.That agenda includes policy initiatives,such as the European Green Deal(in 2020)and the Fit for 55 plan(in 2021),which aim for a 55 percent cut in CO2 emissio
4、ns by 2030(from 1990 levels)and for net-zero emissions by 2050.Since 2021,however,those goals have encountered headwinds.The Russian invasion of Ukraine,the lingering effects of the pandemic,supply chain disruptions,inflationary pressures,and turmoil in the global economy have threatened energy secu
5、rity and affordability in EU countries.Many of them are net importers of oil and gas and thus particularly exposed to energy reliability and market volatility risks.Although Russias natural-gas exports declined after the sanctions against it,the European Union has avoided mandated gas curtailments.O
6、ne reason was the diversification of gas supplyin particular,liquefied-natural-gas(LNG)imports,which increased by more than 60 percent in 2022 from the previous year.1 In addition,the European Union reduced gas consumption in industry and buildings by about 15 to 20 percent in 2022(compared with 202
7、1),thanks to a relatively mild winter and the adoption of behavioral and energy efficiency measures.Several European nations sought to maintain a steady energy supply by taking steps such as delaying the decommissioning of coal-fired power plants and increasing their utilization,which helped to part
8、ially offset reduced generation from nuclear and hydro plants.But by highlighting the European Unions exposure to Russian energy,the crisis gave a fresh impetus to the push for a more orderly energy transition that combines rapid decarbonization with energy security and economic growth(see sidebar“W
9、hat is a more orderly transition?”).In early 2022,the European Commission announced the REPowerEU plan,2 which introduced measures“to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition.”This sent a signal that the European Union aims to come out of the current cr
10、isis with a renewed commitment to climate action(see sidebar“Five interlocking proposals”).1 Baseline European Union gas demand and supply in 2023,International Energy Agency,accessed July 10,2023.2 REPowerEU:A plan to rapidly reduce dependence on Russian fossil fuels and fast forward the green tran
11、sition,European Commission,May 18,2022.What is a more orderly transition?The debate on net zero often seems to oppose an“orderly”transition to a“disorderly”one in a binary fashion.But orderliness is a relative notion.At one end of the spectrum,instantaneous and abrupt action could jolt economies and
12、 societies,impair growth,and lead to public resentment and political backlash.At the other end,delayed or limited action could lead to runaway climate change,threaten the lives and livelihoods of billions of people,bring about massive population displacements,exacerbate political strife and contenti
13、on,and result in a severe contraction of the world economy.Between these two undesirable extremes lies a range of measured and decisive actions that would enable a rapid ramp-down of high-carbon economic activities in tandem with a corresponding ramp-up of low-carbon ones.1 For the purpose of this a
14、rticle,a more orderly transition pathway is a scenario in which the European Union achieves its stated commitments of a 55 percent cut in CO2 emissions by 2030 and net-zero emissions by 2050 while balancing affordability,reliability,resilience,and security.1 Mekala Krishnan,Tomas Nauclr,Daniel Pacth
15、od,Dickon Pinner,Hamid Samandari,Sven Smit,and Humayun Tai,“Solving the net-zero equation:Nine requirements for a more orderly transition,”McKinsey,October 27,2021.2Five key action areas to put Europes energy transition on a more orderly pathThe European Union accounts for about 8 percent of global
16、energy-related emissions.3 While it obviously cannot solve the global climate-change problem on its own,it could position itself as a global leader and serve as an example for other countries and regions if it can come close to achieving its commitments.Still,fulfilling those commitments would requi
17、re an unprecedented effort,and the current Five interlocking proposalsThe European Union has introduced five interlocking sets of proposals intended to help meet its net-zero commitments:1.The European Green Deal,approved in 2020,sets a binding target to reach climate neutrality by 2050.The interim
18、target is to reduce emissions by 55percent from 1990 levels by 2030.2.The Fit for 55 package,approved in 2021,includes proposals aimed at revising and updating legislation to put it in line with the intermediary target of reducing emissions by at least 55percent by 2030.3.In 2022,the European Commis
19、sion adopted the REPowerEU plan,which is intended to bolster energy security and further accelerate the transition.The plan sets out measures that aim to reduce the European Unions dependence on Russian fossil fuels.In addition to the replacement of coal,oil,and natural gas,the commission estimates
20、that energy savings,efficiency,substitution,electrification,and the uptake of green hydrogen,biogas,and biomethane by industry can save 35 billion cubic meters of natural gas,beyond the reductions already foreseen in the Fit for 55 proposals.REPowerEU raised Europes target for the share of renewable
21、s in the energy mix to 45 percent by 2030.To reach that target,the plan aims for installed solar-photovoltaic capacity of more than 320GW by 2025double todays leveland almost 600 GW by 2030.4.In 2023,the European Commission presented the EU Green Deal Industrial Plan,which is distinct from the Europ
22、ean Green Deal described above.It aims to help the European Unions net-zero industry become more competitive and to“provide a more supportive environment for the scaling up of the EUs manufacturing capacity for the technologies and products required to meet the EUs ambitious climate targets.”1 Furth
23、ermore,the Critical Raw Materials Act,which is part of the plan,proposes targets for the amount of 16 strategic raw materials to be extracted,processed,and recycled within the European Union.It also proposes limiting the single-country dependency for imports of each of these strategic raw materials.
24、The Green Deal Industrial Plan supplements the European Green Deal and REPowerEU by improving access to funding,making permitting easier,enhancing skills,ensuring a simpler and more predictable regulatory process,and opening trade for resilient supply chains.5.In March 2023,the European Commission p
25、roposed a set of reforms for the design of the power market.The plan introduces interventions and policies aimed at protecting customers from volatility,making the cost of energy more stable and predictable,and boosting renewable-energy investments.The measures include programs for clean-energy solu
26、tions,such as demand response and storage,and the strengthening of power-purchase-agreement markets.In addition,the plan calls for the adoption of two-way contracts for difference(CfDs)as the only revenue model applicable to all public support for new RES developments and for the introduction of a w
27、ider choice of retail contracts for final users(including the option to lock in stable long-term prices).The proposal will have to be discussed and adopted in the European Parliament and the European Council before taking effect.1“The Green Deal Industrial Plan:putting Europe net-zero industry in th
28、e lead,”European Commission,February 1,2023.3 BP energy outlook:2022 edition,BP,2022.3Five key action areas to put Europes energy transition on a more orderly pathspeed and scale of the transition would need to increase significantly(see sidebar“Europes starting point”).From 2019 to 2021,4 EU power
29、sector emissions decreased at less than half the rate necessary to stay on track for a 1.5C pathway.The European Union would now need to triple its current pace of renewable-energy-source(RES)deployment to avoid a less orderly transition,which would be far more costly and damaging to the economy and
30、 the environment than one that balances affordability,reliability,resilience,and security.Benefits and costsThe energy transition could offer broad economic benefits for the European Unionsuch as increased energy reliability,economic growth,and job creationfor example,by developing supply chains for
31、 renewables such as solar-photovoltaic(PV)manufacturing.McKinseys net-zero report shows that Europes cumulative incremental investments toward net zero could reach around 1.7 trillion by 2030,equivalent,in real terms,to 11 times the spending of the postWorld War II Marshall Plan.Although the transit
32、ion could eliminate six million Europes starting pointThe European Union depends on many energy sources beyond fossil fuels,including nuclear,solar,and wind,though the mix varies from country to country.For example,the share of fossil fuels in Sweden(28 percent)and France(50percent),which use more n
33、uclear and hydropower,is lower than it is in Poland(92percent).1About 37 percent of EU electricity generation comes from fossil fuelslargely coal,which generates up to 15 percent of the regions total electricity.2 Natural gas accounts for roughly 20 percent,and more than 80 percent of the supply is
34、imported from outside the European Union.3 Historically,Russia has been the largest supplier of gas,accounting for more than 40 percent of the European Unions imports in 2020.4 Those imports were 54 percent lower in the first half of 2022.Nuclear power accounts for approximately 25 percent of EU ele
35、ctricity production;more than half of the total is produced in France.5 Still,overall nuclear power production has fallen by 4 percent since 2019.6The European Union produced 37percent of its power from renewable sources in 2021.By contrast,China produced 15percent and the United States 12 percent.7
36、 Wind and hydropower represented more than two-thirds of the European Unions total renewable-energy generation,solar 14 percent,and solid biofuels 8 percent.8Still,the potential for renewables varies from country to country.Northern European ones,such as Denmark,9 have a lower potential for solar PV
37、 than do countries in the south,such as Spain10 and Italy.11 Countries near the North Sea are well situated to capitalize on offshore wind potential:more than half of the 300GW of offshore wind that the European Union aims to deploy by 2050 would be located there.121“Share of primary energy from fos
38、sil fuels,”Our World in Data,accessed July 11,2023.2 European Electricity Review 2022,Ember,February 1,2022.3“Europe relies primarily on imports to meet its natural gas needs,”US Energy Information Administration,February 11,2022.4 Gabriel Di Bella,Mark J Flanagan,Karim Foda,et al.,Natural Gas in Eu
39、rope:The Potential Impact of Disruptions to Supply,International Monetary Fund,July 19,2022.5 European Electricity Review 2022,Ember,February 1,2022.6 Ibid.7“How much of U.S.energy consumption and electricity generation comes from renewable energy sources?”EIA,accessed July 11,2023.8 Renewable energ
40、y statistics,Eurostat Statistics Explained,January 2023.9 Denmark:specific PV power output of 2.673.1 kWh/kWp.10 Spain:3.084.9 kWh/kWp.11 Italy:2.674.54 kWh/kWp.12 Magnus Hjberg Mernild,“Harnessing the North Seas green energy potential,”State of Green,May 17,2022.4 European Electricity Review 2022,E
41、mber,February 1,2022.4Five key action areas to put Europes energy transition on a more orderly pathjobs through 2050,it could also create 11 million,for a net gain of five million.5 As job losses and gains will occur disruptively across the labor spectrum,training and transition support will be requ
42、ired.6In addition to reducing CO2 emissions,a successful transition would strengthen the regions energy security by reducing dependence on fossil fuels and energy imports.The goal would be to raise the proportion of renewable energy in the final energy mix to 45 percent by 2030,compared with 22 perc
43、ent today.By 2030,these changes could reduce the European Unions total energy bill by 10percent.7On the other hand,a less orderly transitionresulting,among other factors,from a lack of coordinated interventions among EU member statescould ultimately raise the cost of energy for households and busine
44、sses in coming decades.We estimate,for instance,that producing green hydrogen in Germany would cost 20 percent8 more than importing it from Spain.A failure to act would have severe negative environmental and economic costs across sectors,infrastructure,human health,and disaster management.These woul
45、d far exceed the costs of action and adaptation.9EU member states would need to take transformative collective action to meet their goals.Implementing the transition would mean profound change:substantial shifts in both energy supplies and large-scale electrificationtwo endeavors of tremendous magni
46、tude.On the supply side,for example,our research shows that the rate of installation of renewable-energy sources(RES),such as wind and solar,would have to increase three to five times from the 201820 average.On the demand side,substantial and cross-sector electrification would be required to reduce
47、direct demand for fossil fuels.According to McKinseys 2022 Global Energy Perspective,the number of battery electric vehicles(BEVs)on EU roads,for example,would need to increase from 1 percent of the total today to about 20 percent in 2030.Stakeholders could then begin the lengthy process of scaling
48、up infrastructure,supply chains,and the availability of talent.The public sector could be called upon to play a significant rolefor example,by considering institutional reforms if needed.Private-sector efforts could prove equally important.Individual operators could catalyze a more orderly energy tr
49、ansition by focusing on cross-value-chain and cross-industry partnerships to improve the resilience of supply chains.The private sector could also take a leading role investing in automation,innovation,and new capabilities;attracting and reskilling the workforce;and launching initiatives to increase
50、 the social acceptance of the measures needed to achieve net zero.Without theseand otherkey enablers,Europe will not be able to deploy energy transition technologies at the necessary speed and scale.Accelerating a more orderly energy transitionIn 2021,the EU market was the third-largest source of gr
51、eenhouse-gas emissions,behind only China and the United States.Within the European Union,emissions were highest in Germany,with 23 percent of the total,followed by Italy and Poland,with 11percent each.The majority of these emissions come from five sectors:transportation(about 28percent),heavy indust
52、ry(about 25percent),power(about 22 percent),buildings(about 13percent),and agriculture(about 12 percent).Fossil fuel combustion accounts for 80 percent of EU emissions.105 Paolo dAprile,Hauke Engel,Godart van Gendt,Stefan Helmcke,Solveigh Hieronimus,Tomas Nauclr,Dickon Pinner,Daan Walter,and Maaike
53、Witteveen,How the European Union could achieve net-zero emissions at net-zero cost,McKinsey,December 3,2020.6 Ibid.7 We calculated the energy bill and compared the projected 2030 level with the level in pre-COVID-19 and prewar times,in 2019.8 This includes the cost of transmission.9 Climate Change 2
54、022:Impacts,Adaptation and Vulnerability,the sixth assessment report of the Intergovernmental Panel on Climate Change(IPCC),February 2022.10How the European Union could achieve net-zero emissions at net-zero cost.5Five key action areas to put Europes energy transition on a more orderly pathThe chall
55、enges of reducing them vary from country to country.The Benelux nations,for example,rely on heavy industry and serve as a hub for air freight and shippingrelatively difficult sectors to decarbonize.Other countries,such as Poland,rely on coal-based power generation.Despite these differences,EU member
56、 states could act in similar ways to overcome the challenges and help realize the regions climate goals.McKinseys 2022 report on the transition11 highlighted nine requirements for reaching net zero.Our research has identified five action areas that EU nations could consider to accelerate the energy
57、transition in an orderly manner:1.creating resilient,at-scale supply chains for key decarbonization technologies2.building out the energy grid infrastructure to support resilience and reduce barriers to in-region renewables3.reexamining land use,societal,and regulatory constraints to accelerate the
58、development of renewables4.redesigning power markets in line with decarbonization and affordability objectives5.ensuring the affordability of clean technologies to foster their adoption and accelerate the energy transitionAction area 1:Creating resilient,at-scale supply chains for key decarbonizatio
59、n technologiesThe European Union currently imports many of the critical inputs that clean technologies need,including solar panels,wind turbines,and batteries.Supply chains for some of these key technologies are already stretched,and geopolitical tensions have exacerbated the existing problems.Suppl
60、y chain blockages risk delaying or increasing the cost of the energy transition.A shortage of labor presents a further obstacle.Potential challengesThe region faces potential challenges for critical decarbonization technologies in three areas of the supply chain:1.Raw materials.Essential materials f
61、or decarbonization technologies originate in just a few countries.That makes supply chains vulnerable to geopolitical risks,political instability,and disruptions in trade relationships.This dependency therefore leaves the European Union at risk for supply shortages,long lead times,and unreliable ava
62、ilability,which could cause sharp price increases and delays for clean technologies.For example,the supply of the rare-earth metals neodymium and praseodymium,used in wind turbines and electric vehicles(EVs),depends considerably on Chinas refining capacity(Exhibit 1).In some scenarios,there could be
63、 shortages of 50 to 60percent in 2030,and the European Union might not be able to scale up local refining capacity in time to fill these gaps.12 Other key materials,such as nickel and cobalt,are expected to be in short supply by 2025.2.Components.The European Union faces supply resilience challenges
64、 for some components of key decarbonization technologies.China,for example,supplies around 70 percent of solar modules and around 60 percent of lithium battery components.13 To be competitive in these products,the European 11 The nine critical requirements to reach net zero are as follows:physical b
65、uilding blocks,encompassing(1)technological innovation,(2)the ability to create at-scale supply chains and support infrastructure,and(3)the availability of necessary natural resources;economic and societal adjustments,including(4)effective capital reallocation and financing structures,(5)the managem
66、ent of demand shifts and near-term unit cost increases,and(6)compensating mechanisms to address socioeconomic impacts;and governance,institutions,and commitment,namely(7)governing standards,tracking and market mechanisms,and effective institutions,(8)commitment by(and collaboration among)public-,pri
67、vate-,and social-sector leaders globally;and(9)support from citizens and consumers.See The net-zero transition:What it would cost,what it could bring,McKinsey Global Institute,January 2022.12 The role of critical minerals in clean energy transitions,International Energy Agency,May 2021.13“Geopolitic
68、s on the rise in solar PV manufacturing,”S&P Global,February 8,2022;Al Root,“China is winning the lithium wars.What it means for Tesla and other EV stocks,”Barrons,May 18,2022.6Five key action areas to put Europes energy transition on a more orderly pathUnion would need to bridge the current large c
69、ost gap:solar modules made in the region are currently 25 to 30 percent more expensive than those made in China.143.Labor.A shortage of labor could also hamper a more orderly energy transition in Europe.The expected surge in wind and solar installations,for example,could make them difficult to staff
70、 with qualified development and construction employees,as well as operations and maintenance workers.Reaching the Fit for 55 target of a 45 percent share of renewables in the energy mix would require a massive redeployment of labor.Almost one million full-time skilled workers would be needed in 2030
71、 just to develop and construct centralized renewable-energy assets.That is more than triple the number needed today.In addition,though new nuclear plants could be commercially viable for decarbonization in the medium to long term,the technical skills and capabilities needed to develop them are very
72、scarce.Exhibit 503003504000300350400Web Exhibit of Global expected demand and refned supply development,by rare element,1 indexed to 2020 demand1Based on expected growth of existing capacity and known new projects.Capacity of known new projects based on estimated probability of
73、 these projects being active,eg,if a project is still in the exploration phase,the probability of it coming live is lower than if it is in a detailed feasibility study phase.Based on base supply and unknown late-maturity projects or projects not yet developed but that are expected to happen toward 2
74、035.Source:Company websites for new projects related to supply;Grand View Research;Research and Markets;McKinsey Electric Vehicle Perspective;McKinsey Wind Turbine Perspective;McKinsey Global Energy Perspective,2022Rare earth metals needed for wind turbines and electric vehicles are highly dependent
75、 on Chinas refning capacity.McKinsey&Company2020202020302020203020252030202020252030NeodymiumExpected globalneodymiumrefning capacityfrom China,%Expected globalpraseodymiumrefning capacityfrom China,%Praseodymium856285622.22.0DemandDemandKnown supplyKnown supplyExpectedsupplyExpectedsupply14 Global
76、Energy Perspective 2022,McKinsey,April 26,2022.7Five key action areas to put Europes energy transition on a more orderly pathKey prioritiesTo mitigate the effects of supply chain disruptions and bottlenecks,business leaders and policymakers could consider three key priorities:1.Building partnerships
77、 with raw-material suppliers from a diversified set of exporting countries.The European Union could create a more resilient supply chain by identifying scarce materials and technologies produced in geographically concentrated areas and then developing partnerships with suppliers elsewhere.For exampl
78、e,the European Commission,in partnership with the World Resources Forum Association,proposed an EUAfrica collaboration for a sustainable raw-material supply chain.Similar programs may allow countries across Europe to find more resilient and diversified sources of supply.The European Union could also
79、 consider introducing agreements(such as the European Raw Materials Alliance)among its member states to make the sourcing of strategic raw materials more diversified and secure.Meanwhile,the region could consider scaling up both recycling and R&D for raw-material substitutionfor example,switching fr
80、om lithium iron phosphate(LFP)batteries to nickel-manganese-cobalt(NMC)technology.2.Scaling up European manufacture of critical technologies.The European Union could offer incentives to scale up Europes manufacturing supply chain by introducing local-content requirements,subsidies,better capital acc
81、ess,and European sustainable labels.It could reduce its dependence on interregional relationships,for instance,by encouraging the manufacture of solar modules,batteries,and subcomponents(such as semiconductor products).EU member states would have a natural role in assessing and prioritizing support
82、measures,including grants or subsidies,to increase onshore manufacturing capacity.Initiatives such as the European Solar Photovoltaic Industry Alliance and the EU Innovation Fund,which support large-scale renewables production in the European Union,are first steps in this direction.The European Unio
83、n could consider introducing agreements among its member states to make the sourcing of strategic raw materials more diversified and secure.8Five key action areas to put Europes energy transition on a more orderly path3.Attracting and training the workforce to ensure adequate labor to scale up clean
84、 technologies.Companies could develop their talent reserves by highlighting the green impact of jobs and by offering clear professional-development pathways for blue-collar workers.This goal could be achieved through investments in company-,country-,or EU-wide labor programs,such as skilling,reskill
85、ing,and enabling international and cross-sector utilization(for example,in the telecommunications,rail,and energy sectors).Furthermore,policymakers could provide incentives to help companies attract talent.Easing certification requirements could permit a faster ramping-up of the needed workforce(Exh
86、ibit 2).Action area 2:Building out the energy grid infrastructure to support resilience and reduce barriers to in-region renewablesBoosting the share of renewables in the energy mix to 45 percent by 2030 could require a substantial expansion and enhancement of the grid infrastructure to support the
87、integration of new green technologies,such as utility-scale and distributed RES,EVs,and heat pumps.A more Exhibit 2Web Exhibit of Estimated annual full-time-equivalent needs for development,construction,andoperation of wind and solar assets in the EU,thousand1Estimate based on current and expected b
88、uild-out and full-time-equivalent workers per gigawatt estimates,based on diferent publications from International Renewable Energy Agency(IRENA);learning rates have not been applied.Practical workers(eg,construction workers,technicians,ship crew,and operators).Remaining workers(eg,electrical,indust
89、rial,mechanical,and telecommunication engineers;and safety and regulation experts,fnancial analysts,and lawyers).Source:Renewable energy benefts:Measuring the economics,IRENA,Jan 2016;McKinsey Global Energy Perspective,2022,accelerated transition scenarioDemand for workers to develop and construct w
90、ind and solar assets in the European Union is set to increase by a factor of three to four by 2030.McKinsey&CompanyBlue collar2020:2902030:990White collarBlue collarWhite collarDevelopmentand constructionOperations andmaintenanceDevelopmentand constructionOperationsand maintenance0 802204
91、459Five key action areas to put Europes energy transition on a more orderly pathup-to-date system could also ensure the security of the gas supply.Potential challengesThree areas could prove particularly challenging:1.Power.Annual grid investments of 40 to 70 percent more than the average over the p
92、ast five years would be needed to support electrification,the integration of renewables and distributed resources,and the digitization of infrastructure.Furthermore,the need for flexibility15 could triple by 2030 as a result of higher generation by renewables.That could require the development of ne
93、w 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 Exhibit 3EU renewables and balancing volumes 201721,by countr
94、y and year,terawatt hoursBalancing refers to intraday market volumes and activated control reserve(secondary and tertiary).2Intermittent is defned as wind and solar.Germany fgures are based on Easter legislation package,July 2022;Spain fgures are based on the National Integrated Energy and Climate P
95、lan,2020;UK calculations based on British energy security strategy,April 2022;France fgures are based on multinational energy planning targets,2020(targets are for 2028,not for 2030).Source:Renewable energy benefts:Measuring the economics,IRENA,Jan 2016;McKinsey Global Energy Perspective,2022,accele
96、rated transition scenarioEnergy fexibility volumes are likely to increase due to higher renewables generation in European countries.McKinsey&CompanyBalancing volumes,terawatt hoursIntermittentrenewable-energygeneration,terawatt hoursIntermittent renewable-energytargets,terawatt hours0202001601208040
97、40608020222030FranceFranceSpainSpainUKUKGermanyGermany558949518615 Intraday market and activated secondary and tertiary reserve.16 Global Energy Perspective 2022,McKinsey.10Five key action areas to put Europes energy transition on a more orderly pathability to balance the grid
98、through interregional connections between generation sites and demand centers.2.Gas.The European Union is responding to the energy market disruption that followed the cuts in Russian exports by seeking to increase its liquefied-natural-gas regasification capacity.Russian pipeline gas imports,which a
99、ccounted for 36 percent of total EU gas consumption in 2021,were down by more than half in 2022.17 In addition,the limited capacity of gas transport through pipes within Europe hinders the European Unions ability to fully exploit the existing LNG infrastructure.Spain and Portugal,for example,have on
100、e-third of the European Unions capacity to process LNG but lack substantial interconnections with the rest of Europe.Furthermore,an estimated 70 percent of the existing EU gas network must be updated to support hydrogen blending.3.Integrated planning.National and cross-national coordination mechanis
101、ms could be strengthened to foster integrated planning across value chains,technologies,and countries.A lack of coordination might negatively affect supply resilience and could raise costs.18Key prioritiesTo enhance the gas infrastructure and improve transmission planning,business leaders and policy
102、makers could consider four key priorities:1.Promoting integrated transmission planning and reviewing permitting and siting to accelerate build-out.Large-scale interconnection projects face long development times.Given the complex issues of siting new large-scale energy transmission projects,stakehol
103、ders could identify the most critical projects of integrated plans and review permitting and siting support through regional collaboration and cooperation among EU countries.National and cross-national coordination mechanisms would foster integrated planning across value chains and technologiesfor i
104、nstance,power,hydrogen,and gas.In the fourth quarter of 2021,the European Network of Transmission System Operators for Electricity(ENTSO-E)and the European Network of Transmission System Operators for Gas(ENTSO-G)took an initial step to implement integrated planning by publishing,for the first time,
105、joint scenarios for the 2022 Ten-Year Network Development Plan.These scenarios capture the interactions between gas and electricity systems to assess the infrastructure of an integrated energy system and optimize overall system efficiencies and flexible use.2.Implementing demand-side measures to red
106、uce peak energy loads and defer grid investments.Grid infrastructure costs are largely fixed,and the deployment of new transmission capacity is slow and costly.Any resource that could improve throughput for these assets at a lower cost and shorten their time to market could increase their overall so
107、cietal value.The use of demand-side resources has been discussed at length in some marketsfor example,the United Statesas a way to augment grid capacity.Resources may include heating,ventilation,and air-conditioning(HVAC)systems using thermal storage to preheat buildings;the optimized charging of ba
108、ttery electric vehicles;the time(and location)shifting of data center computing loads to areas where the grid is less stressed;traditional industrial load curtailment;and 17 Gillian Boccara,Diego Hernandez Diaz,Berend Heringa,Ole Rolser,Namit Sharma,Thomas Vahlenkamp,and Cindy Xue,A balancing act:Se
109、curing European gas and power markets,McKinsey,April 25,2023.18 Policy toolbox for low carbon and renewable hydrogenEnabling low carbon and renewable hydrogen globally,Hydrogen Council,November 2021.11Five key action areas to put Europes energy transition on a more orderly paththe control of large-s
110、cale electricity demand(for instance,to increase green-hydrogen production).The overall loading of the grid infrastructure could be reduced by incentives for flexible demand-side resources to shift loads when grids are most strained to periods of less strain.Flexible demand could help the European U
111、nion reduce the need for fossil-based energy generation to ensure energy reliability.3.Enabling the development of flexible cross-national gas networks that can carry lower-emission fuels.Integrating natural gas and hydrogen into European gas networks can help accelerate decarbonization.The enhancem
112、ent of interregional gas networks could increase energy reliability and enable a more orderly energy transition.Europe could both retrofit its gas infrastructure and build out new capacity to support green hydrogen.As the gas network transitions toward cleaner fuels,policymakers and investors could
113、consider actions that balance reliability and emissions in making investment decisions.For example,could regulatory cost standards for the blended-hydrogen and natural-gas infrastructure be created?Policymakers could also revise the regulations dictating the types of fuels that transmission system o
114、perations and distribution network operations may carry.4.Raising LNG regasification capacity to support midterm energy security and help alleviate the current energy crisis.To bolster and diversify domestic natural-gas supply,EU nations could consider coordinated actions,including further work to d
115、evelop new LNG regasification capacity.Temporary floating storage and regasification units(FSRUs)are already being deployed to increase the European Unions LNG import capacity.Other steps could include building new terminals in Wilhelmshaven,Germany;expanding cross-EU networks,such as the MidCat int
116、erconnection between Spain and France,to exploit available capacity;and exploring opportunities to safely exploit indigenous production in areas such as the north Adriatic,the Sicily Channel,and the North Sea.Here too,policymakers and investors could balance cost,reliability,and emissions in making
117、investment decisions,as well as addressing local concerns.Action area 3:Reexamining land use,societal,permitting,and regulatory constraintsTo reach its 2030 climate targets,the European Union would need to shift rapidly to renewable energy.Our research indicates that from 2022 to 2030,the annual num
118、ber of solar and wind installations would need to increase by two to five times their 202022 levels to meet the regions goals.Indeed,REPowerEU targets include a total solar capacity of 600 GW by 2030,up from 209 GW in 2022.19 Annual additions of PV technology would need to more than double,from 30 G
119、W a year(2020 to 2022)to around 70 GW a year(2022 to 2030).Annual additional onshore wind generation would need to almost quadruple,to 40 GW,from 11 GW,over the same period.Additional offshore wind generation would need to quintuple.Whats more,60 percent of the regions coal capacity might need to be
120、 retired.One critical condition of accelerating the use of renewables is the availability of land.Europes population density and growing concerns about land use have made it more challenging to find adequate areas for onshore wind and solar power.The land requirements for deploying the target capaci
121、ty of renewables are significant.The 2040 RES targets in France,Germany,and Italy,for example,would require an additional land area of 23,000 to 35,000 km2equivalent to the size of Belgium(Exhibit 4).2019 REPowerEU:A plan to rapidly reduce dependence on Russian fossil fuels and fast forward the gree
122、n transition.20 Stathia Bampinioti,Nadia Christakou,Bastian Paulitz,Lukas Phler,Antoine Stevens,Raffael Winter,and Ekaterina Zatsepina,Land:A crucial resource for the energy transition,McKinsey,May 16,2023.12Five key action areas to put Europes energy transition on a more orderly pathTo achieve the
123、necessary deployment of renewables,policymakers could consider accelerating permitting proceduresthe part of the RES and transmission-line-development process that typically takes the longest amount of time.In major EU countries,permitting times range from three to ten years for onshore wind install
124、ations and from two to six years for solar(Exhibit 5).21 As a result,recent tenders across the European Union have been largely undersubscribed.Around 80 GW of capacitysome 30 percent of the additions required to achieve the 2030 EU target for onshore windis still going through the permitting proces
125、s.Exhibit 4Technically available land for onshore wind in Germany and solar power in Italy,%Onshore wind in GermanySolar power in ItalyNote:For separation of land area,the technical constraints and unsuitable land cover are:Existing wind and solar photovoltaic(PV),urban areas,forests,water,airports,
126、low-wind-potential zones(for wind only),slope,and military zones.Regulatory constraints are distance regulations for onshore wind from settlements,protected land,and,in the case of Italy,regulatory constraints to develop utility-scale solar PV on cropland.General assumption for onshore wind is a den
127、sity of 58 MW/km2,not considering additional capacity need if repowering is not possible in former areas,radars,military fight zones,and further country-specifc detailed regulation.General assumption for solar PV is a density of 4360 MW/km2;excluding overlapping wind areas and roof-top solar PV(for
128、Germany:1:1 split between ground-mounted and roof-top solar PV;and for Italy,3:1).Germany has ofcial RES targets;Italy only has ofcial 2030 RES targets and France only has ofcial 2050 RES targets that were linearly extrapolated to 2040 for this analysis.1Sites are restricted to a distance of 5 km to
129、 substations.Available land for renewables development is limited in several countries.McKinsey&Companygigawatts of additional wind powercapacity required by 20405080%of available land needed near substations to achieve 2040 additions104gigawatts of additional solar powercapacity required by 2040608
130、5%of available land needed near substations to achieve 2040 additions63Excluded due to technical constraintsExcluded due to regulatory constraintsCurrently available395239160921“Guidance to Member States on good practices to speed up permit-granting procedures for renewable energy projects and on fa
131、cilitating Power Purchase Agreements,”European Commission,Commission Staff Working Document,May 5,2022.13Five key action areas to put Europes energy transition on a more orderly pathPotential challengesThe expansion of renewables such as wind and solar power could face challenges in six areas:1.Time
132、ly allocation.Meeting the European Unions RES build-out targets could require a reconsideration of spatial-planning processes to ensure the timely availability of sufficient land to develop renewables.In Germany,for example,the amount of available land in areas currently designated for onshore renew
133、ables would allow the development of only about an additional 5 to 8 GW of onshore wind.2.Distance regulation and other constraints.Today,a significant share of the land that could be used for RES deployment is either not suitable technically or subject to regulatory restrictions.22 Rules setting a
134、minimum distance to infrastructure such as settlements,airports,water,and railways,for example,exclude 52 percent of the available land in Germany.Although around 9 percent of the countrys land is available for onshore wind build-outs,50 to 80percent of these areas near substations would be needed t
135、o generate 104 GW of onshore wind additions by 2040.Exhibit 5Web Exhibit of Typical duration between project start and permit granted1Considers only large new-built transmission line projects.Environmental-impact assessment.Source:European Wind Energy Association;Fachagentur Windenergie an Land;pres
136、s searchesLong permitting lead times delay the build-out of renewable and transmission projects in Europe.McKinsey&Company0 years5 years10 years13 yearsFranceItalySpainGermanyOnshore wind0 years5 years10 years13 yearsSolar0 years5 years10 years13 yearsTransmission lines22 Suitable land excludes urba
137、n areas,forests,bodies of water,airports,very low-capacity zones,high-slope areas,military zones,and protected land(such as biodiversity areas).There are also regulatory constraints on distance to settlement for onshore wind,and Italy bans solar PV on cropland.14Five key action areas to put Europes
138、energy transition on a more orderly path3.Competing land uses.Furthermore,RES often must compete for available land with alternative uses,such as agriculture and biomass.In Italy,for example,up to 85 percent of available land would be needed to install the 63 GW of solar PV23 necessary to meet the 2
139、040 additions.24 Yet a deployment of RES on that huge scale is unlikely,particularly since Italy limits the use of cropland for RES.4.Complex and nonuniform regulations.Across the European Union,permitting is a complex process that involves multiple authorities.In Italy,for example,more than 30 bodi
140、es could be involved.25 Only a few countries or areas have designated renewable-energy land eligible for fast-track permitting or adopted a fast-track permitting process for repowering projects.As a result,more than 70 GW of onshore wind that reaches its end of life before 2030 must go through the f
141、ull complex permitting process.5.Varying permitting capabilities among authorities,developers,and transmission system operators.Furthermore,permitting authorities frequently lack the resources,such as digital tools,to track permitting status.Among both developers and transmission system operators,th
142、e failure to adopt best practices,such as stakeholder engagement and project planning,slows down the process.Upgrading to best-in-class tools and processes could reduce permitting times by 20 to 30percent.6.Societal considerations.Opposition to renewables projects may lead to lawsuits,which can incr
143、ease permitting time significantlyfor example,by around 40 percent in Germany.Some evidence suggests that concerns about renewables projects can be influenced once they become operational.In Germany,for instance,a recent survey showed that more than 70 percent of the people in communities without ex
144、isting onshore wind have concerns over permitting but that 78 percent of those with wind plants in their communities do not have a problem with this technology.Key prioritiesTo help ensure that permitting delays and limited land availability do not become constraints on the energy transition,busines
145、s leaders and policymakers could weigh six key priorities:1.Considering targets for renewables at the national and regional levels to help with land allocation.Policymakers could address the lack of available land by considering rules,such as those in Germany,that require each state to designate suf
146、ficient land for onshore wind to match minimum state-specific targets.If the targets are not met,German law makes it possible to fill the gap by preventing the authorities from denying permits for onshore wind in areas that do not comply with local distance regulations.2.Reviewing regulations to saf
147、eguard and increase access to land.Reconsideration of the regulations governing the allowable distance between settlements and onshore wind installations could help increase the area suitable for wind power generation.Relaxing the distance-to-settlement rules in Bavaria,for example,to match those of
148、 Lower Saxony could increase the amount of land suitable for developing renewables 80-fold and permit the generation of 100 GW of additional capacity.Public bodies could attract investment by identifying areas suitable and available for 23 Assuming that 75 percent of solar PV will be ground mounted.
149、24 German RES targets were communicated as part of the German Easter legislative package(May 2022);Italian RES targets are aligned with the Next Generation EU(NGEU)program emission reduction target(about 55 percent of greenhouse-gas emissions by 2030 compared with 1990).The official targets of natio
150、nal integrated energy and climate plans have not been updated since 2019.25 Ministero DellAmbiente e della Sicurezza Energetica,Elettricit futura,Gestore Servizi Energetici.15Five key action areas to put Europes energy transition on a more orderly pathdeveloping renewables and prioritizing these to
151、accelerate permitting and interconnections.3.Maximizing the repowering of existing installations to improve land productivity.The energy production of clean technologies has significantly improved in recent decades.Innovations include tracking and bifacial solar panels,larger wind turbine generators
152、 built on taller towers,and blades with the aerodynamic ability to better capture energy at differing windspeeds.Existing wind and solar farms are often located on sites with the highest renewables potentialfor example,those with high irradiation or wind speeds and with close interconnections.Since
153、these projects often deploy older technologies,they may be producing less than their full renewables potential.As projects age,owners and grid planners could consider seeking out sites that can produce incrementally more energy with the same footprint and repowering where the improved output outweig
154、hs the cost of scrapping a generation source.In Germany,for example,repowering could increase capacity by 45 GW by 2030,lowering the overall need for land.4.Considering the introduction of a fast-tracking process for certain projects that support transition goals.Stakeholders could help ensure the t
155、imely expansion of infrastructure by reviewing the criteria for fast-tracking large projects critical for the European Unions energy security and decarbonization efforts.As of November 2022,for example,the European Union allows member states to apply for the fast-tracking of projects focusing on the
156、 offshore electricity grid and renewable,low-carbon gas corridors,such as those for hydrogen.These projects,which are designed to help achieve the European Unions overall energy and climate policy objectives,are subject to simplified administrative and judicial procedures.Stakeholders also could con
157、sider support for build permitting and siting through regional collaboration and cooperation among EU countries.5.Weighing the potential benefits of one-stop shopping and simplifying processes.To harmonize regulations and establish a central infrastructure authority to oversee permitting timelines,t
158、he United Kingdom has undertaken efforts through the Government Major Projects Portfolio(GMPP)from the Infrastructure and Projects Authority(IPA).The new system makes processes more flexible to accommodate changes in technology.Changing a turbine for a more advanced model,for example,would not trigg
159、er a restart of the permitting procedure if the change does not increase permitting-relevant risks.Whats more,permitting organizations,developers,and transmission system operators could improve their ability to manage complex projects.Digital tools,for example,could track the status of permits and p
160、otentially create a new action-oriented culture of interaction between developers and permitting organizations.6.Launching social-awareness campaigns and implementing incentives to improve public acceptance of solar and wind projects.Public-opinion concerns about renewables are often best addressed
161、with local solutions that involve the publicnot just landownersin the planning process.Making local communities more aware of the benefits of projects and increasing the transparency of procedures could also ease local concerns.Projects that aim to foster public acceptance have encouraged local owne
162、rship of renewable-energy sources by citizens and businesses.To achieve the target of 6 GW of onshore wind power by 2020,the Netherlands,for example,initiated a goal of 50 percent local ownership of facilities for the production of onshore renewables by 2023.The country gave residents and businesses
163、 the opportunity to 16Five key action areas to put Europes energy transition on a more orderly pathparticipate in the decision-making process,from siting to sharing in the revenues.Ultimately,fostering public participation and shared ownership in the development of renewables created widespread acce
164、ptance of wind parks across the Dutch provinces.Action area 4:Redesigning power markets in line with decarbonization and affordability objectivesPower and commodity markets have been designed around energy systems with variable expenditures,so these markets fluctuate according to the cost of commodi
165、ties.The natural gas burned by a combined-cycle gas plant built in the mid-2000s might have been expected to account for 60 to 70percent of its lifetime cost.But variable expenses over the life of a solar or wind farm are very low:operations and maintenance costs are just 10 to 20 percent of lifetim
166、e costs,according to our analysis.Potential challengeTodays market designs factor in operating costs,as prices are based on marginal production costs for power generation units.This system has created an incentive for technological developments such as more efficient combustion turbines.But in the f
167、uture,more primary energy supply will come from variable intermittent renewable resources with close to zero marginal costs.Current markets do not provide an equivalent operational mechanism to support the transition.Indeed,the current market structure pays for neither the energy produced nor for th
168、e changes that would be necessary to create a reliable and resilient system.Key prioritiesTo redesign power markets to meet decarbonization and affordability objectives,business leaders and policymakers could consider four key priorities:1.Reviewing power markets to strengthen the system in the long
169、 term and attract investment.Wholesale power markets are based mainly on energy markets,reflecting the cost of the power generation technology that produces the incremental(marginal)unit of energy at any given time.Although this system ensures the effective dispatching of resources,it does not provi
170、de adequate long-term price signals to support investment decisions in new infrastructure,such as renewables or flexible capacity(for example,battery storage).Power markets could be revised to bolster long-term resilience and attract investment while stabilizing the cost of supply for end users.Opti
171、ons for redesigned power markets could include not only centralized competitive auctions(such as contract-for-differences for renewables and long-term auctions for energy storage)but also power purchase agreements(PPAs).Centralized market platforms or green-sourcing obligations for large customers a
172、nd retailers might also be possible.One potential design outcome could be balancing longer-term price signals for reliability,resilience,and decarbonization with incentives for short-term resource efficiency,scarcity,and system balancing.In any case,market participants,planners,and policymakers woul
173、d probably need to go on paying close attention to managing the price and supply volatility that consumers face.Recent energy volatility has caused significant public distress and could diminish confidence in the possibility of a relatively orderly transition.However,volatility may also create a pri
174、ce signal for investments in the systems flexibility and balancing.2.Creating more transparency in energy pricing,with more granular bidding zones.Many national markets have a single clearing price for electricity and little to no accounting for transmission grid constraints.However,these constraint
175、s often cause discrepancies between the demand for and supply of power within clearing regions.Complex mechanisms have been introduced to ensure grid balancing 17Five key action areas to put Europes energy transition on a more orderly pathbut often do not provide clear pricing signals,particularly f
176、or demand-side resources.Introducing more granular bidding zonesas many markets,including New York,Norway,Sweden,and Texas have donecould create more transparent pricing signals across the energy system.More localized bidding zones enable price clearing to occur at or near the point of generation.Th
177、e resulting local price reflects transmission constraints.If the basis risk in the market were included,the signals for where to build additional supply or localize demand could enhance efficiency.3.Developing financial incentives to minimize energy shortages.Long-duration gas storage enables season
178、al balancing across the EU energy system.To secure an adequate supply of energyespecially during the winter months,when demand peaksmechanisms and policies could be developed to minimize shortages.One possibility would be to offer market participants a financial incentive to fill storage.Given more
179、easily contracted offtake,these requirements could support long-term arrangements for additional sources of gas.4.Creating compensation mechanisms to reconfigure(rather than strand)assets.Fossil fuelfired power plants do not always recover their costs,since their operational expenses are higher than
180、 those of renewables.Under the current market design,the early retirement of these assets is sometimes more economically viable than continuing to operate them.To ensure that energy supply resilience options exist,capacity markets could be implemented to compensate assets that can reduce volatility
181、of supply by making systems more stable.The gas plants in the European Union could,for example,be gradually transitioned to low-utilization assets that provide power during multiday periods of low renewables production.Instead of classifying such low-utilization assets as stranded,decision-makers co
182、uld designate those with good operational records as sources of surplus capacity,helping to mitigate the systems volatility and provide reliable supply.Action area 5:Ensuring the affordability of clean technologies to foster their adoption and accelerate the energy transitionIf the energy transition
183、 is carried out in a more orderly mannerthat is,if renewables account for 45 percent of EU supply by 2030 and the electrification of energy demand meets 2030 targetsit could reduce average EU energy costs by about 10 percent(compared with 2019)by 2030.This reduction could be achieved through a combi
184、nation of lower energy consumption and the substitution of lower-cost clean energy for carbon-intensive energy(Exhibit 6).This cost decrease could have two main drivers.First,final energy consumption could fall by 10 to 15 percent through the electrification of final consumption and through energy e
185、fficiency(including energy management,HVAC improvements,insulation,and smart lighting,among other things).A fully electric household,26 for example,consumes around one-third as much energy as an average one.Second,the unit cost of supplying power can be reduced as renewable-energy support programs e
186、xpire and the levelized cost of electricity(LCOE)of newly installed renewable energy lowers the average cost of generation.These decreases will probably more than offset the increasing costs of flexibility and of transmission and distribution.Potential challengeHowever,the current energy crisis in E
187、urope presents it with the acute and immediate problem of affordability.This challenge is a major concern to households and businesses across the European 26 That is,a family with electric space and water heating(heat pumps),cooking(induction/electric ovens),and transport(electric vehicles).18Five k
188、ey action areas to put Europes energy transition on a more orderly pathUnion,prompting government action in many countries.More may be needed in the future.Key prioritiesTo achieve the necessary reductions,the barriers to the widespread adoption of downstream technologies and energy efficiency measu
189、res will have to be overcome.Two of the most challenging obstacles could be high up-front investment costs and the need for subsidies to make technologies such as EVs and heat pumps cost competitive.On average,sustainable cars and heating systems are 7percent more expensive than conventional ones.To
190、 accelerate the energy transition without adversely affecting affordability,business leaders and policymakers could consider two key priorities:1.Lowering financial barriers,such as high up-front investments,by providing incentives and subsidies for the adoption of clean technologies.The shift to mo
191、re sustainable energy can require households to pay large sums for clean technologies.The longer-term savings to consumers on items such as air source heat pumps,upgraded building insulation,or electric vehicles may be important.The total cost of ownership of an EV,for Exhibit 6Evolution of EU-27 en
192、ergy costs,index(100=1,200 billion)Note:Total EU-27 energy cost based on detailed analysis on the energy cost of key countries(Germany,France,Italy,and Spain=55%of EU-27s energy consumption in 2019).EU-27 cost was estimated proportionally assuming similar average cost of energy in the rest of EU-27.
193、Fuels considered:electricity,hydrogen,natural gas,biogases,motor gasoline,biogasoline,synthetic gasoline,gas/diesel oil,biodiesel,and synthetic diesel.1According to TTF Brent futures(for 2024)as of Sept 2022,assuming gas price of 110/MWh compared with 17/MWh(preinvasion of Ukraine)for 2030.Eg,electr
194、ic vehicles,heat pumps.Eg,building retrofts.=differential means consideration of delta cost of electrifcation tech vs nongreen alternative.Energy consumption and lower levelized cost of energy in Europe could ofset increasing grid costs including distribution and system surcharges.McKinsey&CompanyRe
195、ductionin energyconsumptionand lowerlevelized costof energycould ofset increasinggrid costs(transmission and distribution,systemsurcharges)Long-term increased energy cost due tocontinued energy crisisElectrifcation technologies and energy efciency investments costlier than nongreen alternatives(=dif
196、erential)Expected price dropin oil(from precrisis level)dueto expected demand decline4079 to 163 to 7019 costof energyOperational expenditure(opex)reduction,electrifcation Opex reduction,commoditiesprice change Diferential capital expenditureincrease,electrifcation2030 costof energy Opex
197、increase,continuedenergy crisis2030 cost ofenergy withinvestments2030 cost ofenergy withenergy crisis19Five key action areas to put Europes energy transition on a more orderly pathexample,is in many cases less than that of a vehicle powered by an internal-combustion engine.However,the up-front capit
198、al outlay could be a barrier to adoption.To make green technologies cost competitive in the short term,the European Union could consider offering subsidies,tax credits,and additional support while investing to scale up these technologies so they become less expensive.2.Enabling active demand partici
199、pation by removing regulatory and technical constraints for end users and promoting stabilization to mitigate volatility.Customers could use their own renewable distributed sources to participate in the provision of green energy and flexibility services.In this way,those customers could profit from
200、stable,inexpensive distributed generation and help integrate renewables into the system.Long-term contract options for customers could increase the appeal of active market participation and provide a shelter from volatile commodity prices.In Europe,demand resources are used to make the grid flexible
201、 less frequently than they are in other mature markets,such as the United States.Removing technical constraints(for instance,minimum size or duration)that limit access of demand response could accelerate the uptake of such solutions and increase the systems flexibility.Finally,to address avoidable f
202、uture bankruptcies that have raised costs for end users during the recent crisis,stakeholders may need to consider balanced interventions that protect consumers against volatility while avoiding excessive barriers to competition.These interventions could include strengthening the resilience of retai
203、lers through capital requirements(similar to those applied in the banking sector)or setting minimum backup levels,such as long-term supply contracts or hedging ratios for sales with fixed prices.The energy transition can unlock great benefits.These could include a cleaner and healthier environment,m
204、ore affordable(and less volatile)energy costs for consumers and businesses,increased energy resilience and security,infrastructure investments,and significant job creation.However,realizing these benefits could entail far-reaching change,including institutional reforms,reviews of regulations,behavio
205、ral change,and large-scale capital outlays.EU policymakers recently introduced two reform proposals designed to help accelerate the transition.First,the Green Deal Industrial Plan,announced in February 2023,aims to strengthen local supply chains and to support the affordability and adoption of clean
206、 technologies.This plans ability to help ensure continued EU leadership in the energy transition will depend largely on the amount of To make green technologies cost competitive,the European Union could consider offering subsidies and tax credits while investing to scale up these technologies.20Five
207、 key action areas to put Europes energy transition on a more orderly pathfinancing,the ease of access to funds,and the simplicity of the policy instruments.Second,a recent proposal aims to ease the weaknesses in the current design of energy markets by strengthening forward markets,developing and sup
208、porting liquid PPA markets for renewables,and introducing long-term markets for flexible resources.Interventions in other areas could also be considered,including changes to the permitting process both for developing renewables and the grid infrastructure.Individual EU member states could consider s
209、implifying administrative procedures and strengthening the capabilities required to comply with the maximum deadlines that the EU Council recently set for granting permits:three months for solar energy,compared with 12months previously.For the European Union,a successful energy transition amid geopo
210、litical and macroeconomic turbulence would probably require sustained will,cooperation,and coordination among all stakeholdersincluding operators,regulators,investors,and society at large.Scan Download PersonalizeFind more content like this on the McKinsey Insights AppDesigned by McKinsey Global Pub
211、lishingCopyright 2023 McKinsey&Company.All rights reserved.Tommaso Cavina is an associate partner in McKinseys Milan office,where Lorenzo Moavero Milanesi is a senior partner;Hamid Samandari and Humayun Tai are senior partners in the New York office;and Raffael Winter is a partner in the Dsseldorf o
212、ffice.The authors would like to thank Marcelo Azevedo,Stahtia Bampinioti,Patricia Bingoto,Greg Callaway,Nadia Christakou,Julien Claes,Spencer Dowling,Magda Handousa,Emil Hosius,Blake Houghton,Jake Langmead-Jones,Sarah Mohamed,Simon Norambuena,Bastian Paulitz,Lukas Phler,Namit Sharma,Antoine Stevens,Christer Tryggestad,Antonio Volpin,and Alexander Weiss for their contributions to this article.21Five key action areas to put Europes energy transition on a more orderly path