麦肯锡 -能源转型必须应对的十大现实难题 Ten physical realities the energy transition must tackle

April2025

Mcsey

GlobalInstitute

Tenphysicalrealitiestheenergytransitionmusttackle

Theenergytransitionwouldbeaphysicaltransformationonamassivescale.Herearetenrealitiesthatmustbeconfrontedforittosucceed.

byMekalaKrishnan,ChrisBradley,HumayunTai,andTiagoDevesa

Therehasbeenmeaningfulmomentumtoward

theenergytransition,butanumberofforces

arecreatinguncertainty.Theyincludeshifting

geopolitics,policyuncertaintyinmanycountries,

themacroeconomicenvironment,andrisingenergydemandfromtheadoptionofartificialintelligencetools,tonameafew.

Buteveninthefaceofthesenear-term

uncertainties,itisimportantnottolosesightof

thecore—long-term—challengeattheheartof

thetransition.Theenergytransitionisaphysical

transformationonamassivescale.Billionsof

partsassociatedwithtoday’shighlycomplex,

interconnected,andoptimizedsystemofenergy

productionandconsumptionwouldneedto

betransformed—substitutinghigh-emissions

technologiesthatrelyonfossilfuelswithanew

generationoflow-emissionsoptions—withan

aspirationtodosoinjustdecades.Thiswillrequiretackling,asour2024reportputit,the“hardstuff”—grapplingwiththephysicalchallengesassociatedwiththedevelopmentanddeploymentofhigh-

performinglow-emissionstechnologiesandtheassociatedinfrastructureandsupplychainsthey

needinordertooperate

.1

Wearealreadyseeingthephysicalnatureof

thetransitionmanifest.Ontheonehand,global

physicaldeploymentofcleantechnologiessuch

asrenewablesandelectricvehicleshascontinuedtoaccelerate.Installedrenewablecapacity(ledbyrecorddeploymentsofsolarpower)isestimatedtohaveincreasedbymorethan10percentfrom2023to2024,andpassengerelectricvehiclesales—

bothbattery-powered(BEVs)andplug-inhybrids(PHEVs)—bymorethan25percentfrom2023

to2024.

2

Andtechnologiescontinuetoimprove,

including,forinstance,longer-rangingEVs,new

stationarystoragetechnologies,andair-source

heatpumpsthatcanprovideuninterruptedheatattemperaturesbelowminus20°C.

3

Nevertheless,itisincreasinglyevidentthatmore

needstobedonetodealwithphysicalchallenges

headon.Forexample,aspowersystems

accommodateahighershareofrenewableslike

solarandwindthatare,bytheirnature,variable,

thereisgrowingrecognitionoftheneedtomanagevolatility.

4

Risingenergydemandfromdata

centershasalsodemonstratedthechallengewith

scalinguppowercapacity.IntheUnitedStates,

interconnectionprojectstypicallytakenearly

fiveyearsfromtheinterconnectionrequestto

commercialoperation,andanestimated70percentoftransmissionlinesaremorethan25years

oldandwouldneedtobereplacedwithintento

20years.

5

Overall,morewillneedtobedonetodealwith

thephysicalchallengesassociatedwiththelargescale-upoflow-emissionstechnologies.Sowhatarethosechallengesandhowshouldstakeholdersnavigatethem?Tosupportdecision-making,

ouranalysis

publishedin2024iswhatwebelieveisthefirstcomprehensivestocktakeofthose

physicalchallenges

.6

Inthisarticle,wedrawonthatresearchtohighlighttenkeyinsightsthatarerelevanttothecore

componentsofthetransition—tothepowersector,whichisattheheartofthetransition;tothethree

majorend-usesectors,namelymobility(road

vehiclesandotherformsoftransportationtomovepeopleandthings),industry(whichmanufactures

abroadrangeofmaterialsandgoodslikesteel

andcement),andbuildings(facilitiesthatconsumeenergyforlighting,heating,andmore);and,

finally,tothethreeenablersoftheenergy-system

transformation,namelyrawmaterials(particularly

thecriticalmineralsneededformanylow-emissionstechnologieslikebatteriesandelectrolyzers),new

energycarriers(suchashydrogenandbiofuels),andcarboncaptureandenergyreductionapproachestomanageanyremainingemissions.

Tenphysicalrealitiestheenergytransitionmusttackle2

Tenphysicalrealitiestheenergytransitionmusttackle3

1

Today’senergysystemishigh-performingbutalsohasflaws

Today’senergysystemhasfivehighlybeneficialpropertiesthathelpitdeliverhighperformance(Exhibit1).

Forinstance,itcanmoveenergyrelativelyeasilytowhereitisneededbecausecurrentfuelsare

bothenergy-denseandeasilytransportable.Justoneaveragetankercarryingliquefiednaturalgascanpowermorethan40,000homesintheUnitedStatesforan

entireyear.

7

Itisdispatchableandcanramptheprovisionof

energyupanddownquickly,totherightplaceattherighttime.Agasturbinepowerplantcanmovefromfullshutdowntogeneratingpoweratfullcapacityinlessthantenminutes.

8

Andfossilfuelsareacapablesourceofhigh-

temperatureheatintheproductionofindustrial

materials,whiletheirchemicalflexibilityenablesthemtobeusednotonlyassourcesofenergy,

butalsoasfeedstocks—forexample,theyprovidemoleculesonwhichplasticsarebased.

Buttoday’senergysystemhasflaws.Twostand

out.First,itisinefficient,witharoundtwo-thirdsofallenergybeingwastedtoday,mostlyduetolow

energyefficiencyintheconversionanduseoffossilfuels.

9

Second,theproductionandconsumptionofenergycontributetomorethan85percentofglobalemissionsofcarbondioxide(CO2)

.10

Theenergytransitionwouldthereforerequire

replicatingthebenefitsandperformanceofthecurrentsystemwhileaddressingitsdownsides.

Thegoodnewsisthatinpartsoftheenergysystem,low-emissionstechnologiesalreadyoftenmatch

orevenexceedthatperformance.Forinstance,

batteriescanprovidequickerdispatchabilitythanevengas-firedpeakingplants,andnuclearplantsoftenhavehighercapacityfactorsthangasplants.Andmanycleantechnologiesarerapidlyimprovingtheirperformance.

Still,performancegapsremain.Today,fuelssuchasdieselhaveabout50timeshighergravimetricenergydensity(orenergyperunitweight)than

thebatteriesusedinelectriccars.

11

Electricity

andmanylow-emissionsenergycarrierssuchashydrogenareharderandmorecostlytotransportoverlongdistancesthanfossilfuels.Overall,theenergytransitionwillrequirebothcontinuing

toimprovetheperformanceoflow-emissions

technologiesandbringingthemtogetherinnewwaystodeliverhighperformance.

Tenphysicalrealitiestheenergytransitionmusttackle4

Exhibit1

Today’senergysystemhasbeneficialpropertiesbutproduceshighemissions.

Assessmentofpropertiesofthecurrentenergysystem

Beneficialproperties

Improvementsneeded

Technologies

Higheremissions

Loweremissions1

CurrentandpotentialevolutionCurrentrange

Potentialevolution

DesiredpropertyPropertyassessmentbasedoncurrentstate

VOLUMETRICENERGYDENSITY,megajouleperliter2

Energy

dense

GaseousH23WoodMethanolLNG4Bituminouscoal

02040

BiodieselDiesel

Li-ionbatteryLiquidH2

GRAVIMETRICENERGYDENSITY,MJperkg2

WoodMethanolBiodieselLNG

0Li-ion75150

batteryAmmoniaBituminouscoalDieselH2(gaseousandliquid)

EXAMPLE1literofdieselcanmovea2.6-tonneSUVfor~10km

TRANSPORTABILITY,MWhmovedper$oftransportcostover1,000miles5

Transportable

High-voltagedirectcurrent

LiquidH2(shipping)

H2(pipeline)

Ammonia(pipeline)

●●Naturalgas(pipeline)

LNG(shipping)Oil(pipeline)

02.55

EXAMPLE

~1%costofmovingoilfor1,000milesrelativetopriceofoil

AVERAGECAPACITYFACTORACROSSGEOGRAPHIES,6%timegeneratingenergy

Solarb

Onshorewind.b

O仟shorewind

Geothermal

Dispatchable

HydropowerNuclear

Gasplants(baseload)●●

050100

SPEEDOFPOWERRAMP-UP,%increaseoftotalgenerationcapacityperminute

Thermalstorage

b

●●Gas/H2turbineopencycle

Magnifiedview

Nuclear7CoalGasturbinecombinedcycle

00.51

Li-ionbattery

Hydropower

050100

EXAMPLEIttakes~10minutesforanopencyclegaspowerplanttogofrom0–100%

Tenphysicalrealitiestheenergytransitionmusttackle5

Exhibit1(continued)

DesiredpropertyPropertyassessmentbasedoncurrentstate

Capable

ofhighheat

TEMPERATURERANGESFORCOMBUSTIBLEFUELS8ANDELECTRICTECHNOLOGIES,ºC

Electrictechnology(eg,boiler,resistanceheater,electricarcfurnace)

b

NaturalBiomass

HeatpumpsBiomass(birchwoodandcharcoal)Coal1gas(fuel)rH2

01,2502,500

Naturalgascanburnupto2,000°C

EXAMPLE

Chemicallyfiexible

(usedasinputsfor

manydi仟erent

materials)

FEEDSTOCKSFORDIFFERENTINDUSTRIALPROCESSES9

Steel

Plasticsandchemicals

Ammonia

Fuels

Low-emissionsfeedstocks(eg,H2,biofeedstock,

recycledoutputs)canbeusedfor

1,000sofmaterialsarecurrentlyderivedfromfossilfuels

Fossilfuelsare

usedfor

EXAMPLE

Energy

e代cient10

USEFULWORKFROMFINALENERGYFORROADMOBILITY,%

Internalcombustionengine(ICE)vehiclesBatteryelectricvehicles(BEV)

050100

Fuel-cellelectricvehicles(FCEV)

USEFULWORKFROMFINALENERGYFORHEATING,%

HydrogenboilerooNaturalgasboilerHeatpumps

bob0200400

EXAMPLE

Only~15–30%oftheenergyingasolineisconvertedintousefulenergybyanICEcar

Low-

emissions

GENERATEDPOWERPERUNITOFEMISSION,kWh/kgCO2-e,includingindirectemissions

Nuclear

Wind

SolarHydroMagnifiedview

GaspowerHydro

02.55Coalpower

0175350

~3kgofCO2releasedwhenburning1kgofcoal,whichwouldtake40daysforanaveragetreetoabsorb

EXAMPLE

Note:Thisexhibitassessesthecurrentstateofcriticalpropertiesofindividualtechnologiestooutlinethepotentialbuildingblocksofanewsystem.Inpractice,anewsystemwouldnotconsistofone-to-onesubstitutions,soperformanceatthesystemleveldependsnotjustonindividualtechnologyperformancebutonhowthesystemiswiredtogether.Technologiesareillustrativeandnotexhaustive.

1Someoftheoptionsclassifiedas“loweremissions”canentailarangeofdi仟erentpotentialemissionsprofilesdependingonhowtheyareproduced(forexample,ammonia).2Higherheatingvalue.3Rangedacrossdi仟erentpressures,from1to350bar.4LNG=liquefiednaturalgas.5Transmissioncostsincludetotaloperatingcostsandamortizedcapitalcostfornewlineconstruction.Costcomparisonsoftransportedenergyhaveimportantlimitations,includingthefacttheyexclude

upstreamanddownstreamlossesingeneratingandusingthatenergy.6Excludesassetsusedonlytoprovidepowerfiexibility.7Forlarge-scalenuclearfission.

8Flametemperaturethatthesefuelscanburnat;actualtemperaturesmaybelowerduetoenergylosses.9Forinstance,coalinsteelmaking;naturalgasinthe

productionofammonia,chemicals,plastics,andsteel,andinfuels;oilinfuelsandintheproductionofchemicalsandplastics.Low-emissionsfeedstockssuchashydrogenandbiobasedfeedstockscanbeusedtomakeammonia,chemicals,plastics,andsteel.10StartingfromelectricityforH2,heatpumpsandBEVs,andfromfossilfuelsforboilersandICEs:includeslocaluses,excludeslong-haultransportofhydrogen.

Source:USDepartmentofEnergy;NationalRenewableEnergyLaboratory;InternationalEnergyAgency;WorldNuclearAssociation;InternationalRenewableEnergyAgency;USEnergyInformationAdministration;EuropeanEnergyResearchAlliance;EnergyTransitionsCommission;HydrogenCouncil;Hydrogen

ScienceCoalition;GTK;AgoraIndustry;Ambienta;DeSantisetal.(2021);Galimovaetal.(2023);TheOxfordInstituteforEnergyStudies;USEnvironmentalProtectionAgency;EuropeanEnvironmentAgency;McKinseyGlobalInstituteanalysis

McKinsey&Company

Tenphysicalrealitiestheenergytransitionmusttackle6

2

Onlyabout10percentof

low-emissionstechnologiesneededby2050tomeet

globalcommitmentshavebeendeployed

Totransformtheenergysystemwouldrequirethesubstitutionofbillionsofphysicalassets.Under

McKinsey’s2023AchievedCommitmentsscenario,toreachstatednationalclimatecommitments,

aboutonebillionEVs,morethan1.5billionheat

pumps,andabout35terawattsoflow-emissions

powergenerationcapacitywouldneedtobedeployedby2050,forinstance

.12

Therehasbeenmomentumtowardthatdeployment.Forinstance,almost90percentofallpassenger

BEVsalesand60percentofallsolarandwind

powercapacityadditionsareestimatedtohave

happenedinthepastfiveyearsalone

.13

Butthusfardeploymentoflow-emissionstechnologiesisonly

atabout10percentofthelevelsrequiredby2050tomeetglobalcommitmentsinmostareas—andfarlessthanthatinothers(Exhibit2).Forinstance,lessthan1percentofthe90milliontonnesofhydrogenproducedtodaycomesfromlow-emissions

production.Overall,therefore,theenergytransitionisinitsearlystages

.14

Thusfardeploymentoflow-emissionstechnologiesisonlyatabout10percentofthelevelsrequiredby2050tomeetglobalcommitmentsinmostareas—

andfarlessthanthatinothers.

Exhibit2

Tenphysicalrealitiestheenergytransitionmusttackle7

Deploymentofkeydecarbonizationapproachesisatanearlystageinmostdomains.

MCKINSEY2023ACHIEVEDCOMMITMENTSSCENARIO1

Domains

PowersectorEndusesector

2022deploymentoflow-emissionstechnologiesasashareoftheirneeded2050deployment,2%

2050

Enabler

Power

~35TW

1

~1BEVs(stock)~75MEVs(sales)

2

~5.5Btonnesp.a.

3

~1.8BHPs6(stock)

~150MHPs6(sales)

4

□□

>50Mtonnesp.a.

人

5

\/

OO

~400Mtonnesp.a.

6

CO2

v

~4,200Mtonnesp.a.

7

deployment

Low-emissions

installedcapacity3

~8–12

Mobility4

-EVstock

-EVsales

~3

I~15

Industry5

Low-emissionsproductionofsteelandcement

~0–10

Buildings

-Heatpumpstock

-Heatpumpsales

I~10

~10

Rawmaterials

Supplyofcriticalminerals7

~10–35

HydrogenandenergycarriersLow-emissionsH2produced

<1

CarbonandenergyreductionCO2capturedbypoint-sourcefacilities8

I<1

020406080100

1Scenarioinwhichmostcountriesthathavecommittedtonetzero(someby2050,somelater)meetthosecommitments.2Estimatedrangesofcurrentdeploymentcomparedwith2050deploymentneeds,basedonparametersdetailedbelow.3LowendonlyincludesVRE,whilehighendincludesall

low-emissionspower.4Formobilityspecifically,weconsider2023deployment(asashareofneeded2050deployment).FiguresareforBEVsandFCEVs,

excludingtwo-andthree-wheelers,whicharemoreelectrifiedtoday.5Averageofsteelandcement.Lowendonlyincludeslow-emissionsprimaryproduction,

whilehighendincludesalllow-emissionsproductionincludingsecondarysupplyforsteel.6HPs=Heatpumps.7Acrosseightminerals.Foreach,today’s

productionisassessedrelativeto2050demand.Thelowendreferstotheminimumvalueofthisacrossminerals,whilethehighendreferstotheaveragevalueacrossminerals.8Includesonlypoint-sourcecapture,excludesdirect-aircapture.

Source:EnergyInstitute;InternationalEnergyAgency;McKinseyMineSpans;Globalenergyperspective2023,McKinsey;McKinseyGlobalInstituteanalysis

McKinsey&Company

Tenphysicalrealitiestheenergytransitionmusttackle8

3

Ametamorphosisofthepowersystemhastobeattheheartofthetransition

Transformingthepowersystemisfundamental

totheentireenergytransitionbecauseabating

emissionsinthehugeenergy-consuming

sectors—mobility,industry,andbuildings—wouldentailsweepingelectrification,accordingtomosttransitionscenarios.

Thepowersystemwillneedtonotonlygrow,butdosoevenwhilereducingitsownemissions.UndertheMcKinsey2023AchievedCommitmentsscenario,

theglobalpowersystemwouldneedtoquintuple

insize(generationcapacityinstalled)between

nowand2050asend-usesectorselectrify.Atthesametime,theshareofpowergeneratedfromlow-emissionssourceswouldneedtomorethandoubletogreaterthan90percent

.15

Theseshiftshaveprofoundimplicationsforhowthepowersystemwillneedtobesetupandfunction.

TakeGermanyasanexampletoillustratethis(Exhibit3).

UndertheMcKinsey2023AchievedCommitmentsscenario,tomeetitsclimatecommitments,

Germanymayneedtodoubletheamountofpoweritgenerates,andtheshareofpowergeneratedbyvariablerenewableenergy(VRE)sourceslikesolarandwindmayneedtoasmuchastriple.

Thepowersystemwouldthenneedto

metamorphoseintoonethatisthreetimeslargerintermsofinstalledgenerationcapacityinthis

scenario,andhaveloweroverallutilization.

Thisispartlybecausearenewables-powered

systemrequiresflexibleassetsthatcanprovidestandbypowerwhenthereisnosunorwind—assetslikethermalbackuppowerplants(suchasgasorhydrogenpeakers),storage,andmoreinterconnectionswithotherpowermarkets.

Soevenasoutputfromrenewablesgrows,the

sizeofthethermalsystemmayremainflat,ratherthanshrink.

Utilizationofthethermalsystemwoulddropasitbecomesasourceofbackupinsteadofconstantpowerorbaseload.

Butthenecessarytransformationofthepower

systemgoesbeyonditschangeinutilization

profile.Becausevariablerenewableassetscan

sometimesbesmaller,fartherawayfromwhere

powerisneeded,andmoredistributed,thesizeofthegrid’stransmissionanddistributionlineswouldneedtogrow.TheInternationalEnergyAgency,forinstance,projectsthatthevolumeoftransmissionanddistributionlineswouldneedtoalmosttriple

globally,orgrowbymorethan3percentperyear,undera2050NetZeroEmissionsscenario

.16

Exhibit3

Tenphysicalrealitiestheenergytransitionmusttackle9

Totalthermalcapacity,GW

VRE-heavysystemsrequiremorecapacitytoprovidefiexibility.

GERMANYILLUSTRATION

MCKINSEY2023ACHIEVEDCOMMITMENTSSCENARIO

ChangesinGermanpowersystem,2000–50

1AsthepowersystemscalesandVREpenetrationincreases…1

+85%

TotalVRE

1,000

800

600

400

200

Projected

’20’30’40

Totalgeneration,GWh

0

2000

2050

’10

FlexiblecapacityGW

2…totalcapacityrampsupmuchfasterthantotalgeneration.2

100

Projected0

2000’10’20’30’402050

Total

capacity

Total

generation

600

400

200

Index,2000=100

3×

3Asfiexiblecapacityrequiresastepchange…3

,

Interconnections

3×

Thermalfiex

StorageProjected

150

100

50

0

2000’10’20’30’40’50

1×

Hydrogen

orotherlow-

emissions

fuels

Other

thermal4

Projected

’10’20’30’40

120

80

40

0

2000

2050

4

…thermalcapacityremainsinthesystemtoprovidefiexibility…

Transmissiongridlength1000km

40

1.8×

20

Projected

0

2020’25’30’35’40’45’50

,,

80

60

5…leadingtolowerutilization——b6…andthegridexpandsrates

Totalthermal60

40

20VRE

Projected0

2000’10’20’30’402050

Capacityfactor,5%

–27pp

80

1Variablerenewableenergy(VRE)referstoenergysourcessuchassolarandwind,whichproduceelectricitydependingonnaturalconditions(forexample,whenthesunisshiningorwindisblowing).2Capacityincludesallformsofgenerationassets.3Flexiblecapacityincludesdispatchablegenerationassetsrunningatlowutilization(benchmarkedagainst50%utilization),interconnections,andstorage.Thermalfiexibilityencompassescoal,gas,gaswithcarboncaptureandstorage,nuclear,oil,othercleanthermalassets,andotherrenewableenergysources.Interconnectionsrefertophysicalconnectionswithotherpowersystems,measuredinmegawattsrepresentingthemaximumamountofelectricitythatcanbeimported.Storageincludespumpedhydro,longdurationelectricitystorageand

lithium-ionbatteries.4Includescoal,naturalgas,andoil.5Thecapacityfactorofagenerationassetiscalculatedbydividingoutputoveraperiodoftimebythemaximumpossibleoutputiftheassetwererunningatfullcapacitycontinuouslyoverthesameperiod.

Source:InternationalEnergyAgency;USEnergyInformationAdministration;McKinseyPowerModel;FederalNetworkAgency(BNetzA);McKinseyGlobalInstituteanalysis

McKinsey&Company

Tenphysicalrealitiestheenergytransitionmusttackle10

4

Electrifyingheatwillrequiremanaging

higherdemandpeaks

Theheatingandcoolingneedsofbuildingsaccountforalmost85percentoftotalCO2emittedfrom

buildings,withspaceheatingandwaterheatingresponsibleformorethan75percent

.17

Theneedforheatiscurrentlylargelymetbyburningfossilfuels—forexample,ingasboilers.Fossilfuelscouldbereplacedbyusingelectricoptions.Heat

pumpsarehighlyefficientheatingtechnologiesandthemainoptionbeingexploredinmostmarkets.

Butsweepingelectrificationofheatinginbuildingswillonlyaddanotherlayerofdemandtothepowersystem.Demandforelectricitywouldspike—

sharply—duringthecoldesthoursofthecoldest

daysoftheyearwhenmanypeoplerushtoturntheheatingonatthesametime.IntheUnitedStates,forinstance,peakdemandwouldshiftfromthe

summer,whenmanybuildingsuseairconditioning,tothewinterasheatpumpsspread

.18

Overallgrowthindemandimpliesthattheentire

powersystemwouldneedmorecapacity.Let’s

taketheUnitedStatesasanexampleofwhatthismightlooklike.Ifandwhenheatpumpsspread,

peakdemand(thelargestamountofpowerthatiseverrequiredduringthecourseofayear)mayrisewellbeyondthepeakcapacityoftoday’sgrid.In

Exhibit4

Asheatingelectrifies,peakelectricitydemandcouldtripleinsomeUSstatesifnotmanaged.

Projectedpeakelectricitydemandin100%electrifiedheatscenariointheUnitedStatesvscurrent,withoutadditionaldemandmanagementmeasures1

RegionCurrent

ISO–NE3

Nationaltotal

ERCOT4

100%

electrificationscenario

3.2x

1.7x

1x

Peakelectricitydemandin

anelectrifiedscenariovs

currentpeakbystate,in

ISO,2andatthenationallevel

1.0x4.0x

PEAKELECTRICITYIN

ELECTRIFIEDSCENARIOVS

CURRENTPEAK

NY

NJ

MD

DC

FL

ND

SD

NE

KS

OK

TX

WI

IL

IN

KY

TN

MS

MI

OH

WV

NC

AL

MN

IA

MO

AR

LA

MT

WY

CO

NM

VT

MA

CT

DE

ID

NV

UT

AZ

PA

VA

SC

GA

WA

OR

CA

ME

NH

RI

1BasedonanalysisbyWaiteandModi(2020)comparingcurrentelectricitydemandtoascenariowith100%electrificationofcurrentbuildingheatdemandintheUS.Assumestop-performingheatpump(90thpercentile)isused.Thisanalysisdoesnotconsiderthepotentialgrowthofenergydemandand

electrificationinotherdomains,suchasmobilityandindustry.Peakloadsrefertononcoincidentalloads.AlaskaandHawaiinotincludedinanalysis.

2IntheUnitedStates,independentsystemoperators(ISOs)aresplitintodi仟erentregions,suchasISO-NEandERCOT.

3ISO-NewEngland(NE)servesConnecticut,Maine,Massachusetts,NewHampshire,RhodeIsland,andVermont.

4ElectricReliabilityCouncilofTexas(ERCOT)servesmost,butnotall,ofTexas.

Source:WaiteandModi(2020);McKinseyGlobalInstituteanalysis

McKinsey&Company

Tenphysicalrealitiestheenergytransitionmusttackle11

onescenarioinwhichheatinginbuildingsisfully

electrified,externalresearchhasestimatedthat

peakpowerdemandcouldbe1.7timestoday’speakacrosstheUnitedStates

.19

Incolderregions,thiseffectcouldbeevenmore

pronounced.InNewEngland,forexample,peak

demandcouldbethreetimeshigherthantoday.

Remember,too,thatheatpumpsarecurrentlylessefficientatcoldertemperatures.Forexample,whentemperaturesdropfrom5ºCtominus10ºC,the

coefficientofperformanceofstandardheatpumpsalmosthalves.

20

Actiontominimizepeaks—andthereforehowmuchpowercapacityisrequiredinthesystem—could

beimplemented,throughacombinationofmore

efficientmodelsofheatpumps,moreuseofheatingtechnologiesthatcombineelectrificationwithotheroptions(socalleddual-fuelsystemsandother

technologies)tolimituseofelectricityontheverycoldestdays,orevensmoothingthedemandforpowerbyshiftingdemandforheatingtodifferenttimesofthedaybycombiningheatpumpswith

thermalenergystorage.

21

Overallgrowthindemandimpliesthattheentirepowersystem

wouldneedmorecapacity.

Tenphysicalrealitiestheenergytransitionmusttackle12

5

ForEVstodeliverontheirpotential,gridswould

needtobecleaner

ThedeploymentofpassengerBEVsisincreasing,

buttheextenttowhichtheysaveonCO2in

comparisonwithvehiclespoweredbyinternal

combustionengines(ICEs)varies.Although

passengerBEVscanhavelowerrunningemissionsperkilometerthanICEs,theyhavehigheremissionswhentheyarebeingmanufact