A recent McKinsey & Company study reveals that Europe and the United States lag behind their decarbonisation objectives.
This shortfall is primarily due to a significant discrepancy between the volume of targeted projects and the number progressing to final investment decisions (FID).
McKinsey’s analysis highlights that, despite the swift expansion of solar energy in recent years, Europe is not on track to meet its 2030 solar capacity target of 600 GW. Projections indicate that less than 390 GW will be operational by the decade’s end.
Furthermore, under 20% of the planned 114 GW of new solar capacity slated for installation in the next five years has reached FID. Nevertheless, McKinsey remains optimistic, suggesting solar projects can be quickly deployed to enhance and stabilise the pipeline before 2030.
In the United States, the study forecasts a deceleration in the annual growth of solar PV capacity post-2028. Approximately 60% of the announced pre-2030 capacity remains pending FID, posing significant risks to the realisation of many planned solar initiatives.
Regarding onshore wind energy, Europe currently boasts 240 GW of operational capacity and an additional 106 GW in development.
While this total could surpass the 314 GW target, only 17 GW has secured FID. Conversely, the U.S. anticipates adding merely 39 GW of new onshore wind capacity after 2025, with 16 GW (41%) having achieved FID.
The research underscores that hesitation among corporate, public, and private investors stems from weakening business cases, doubts about the cost-effectiveness of technologies, and inadequate policy support.
Other contributing factors include economic uncertainties, prolonged permitting processes, a shortage of skilled labour, a lack of reference projects, and shortages of raw materials, all of which deter investment.
The study’s authors caution that although significant advancements have been made since 2015, Europe and the United States risk missing essential climate targets for 2030 if current development rates persist without immediate and decisive action.
