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• Published: 11 January 2021

Climate change impacts on renewable energy supply

• David E. H. J. Gernaat   ORCID: orcid.org/0000-0003-4994-1453 1 , 2 ,
• Harmen Sytze de Boer   ORCID: orcid.org/0000-0001-7376-2581 1 , 2 ,
• Vassilis Daioglou   ORCID: orcid.org/0000-0002-6028-352X 1 , 2 ,
• Seleshi G. Yalew   ORCID: orcid.org/0000-0002-7304-6750 2 , 3 , 4 ,
• Christoph Müller   ORCID: orcid.org/0000-0002-9491-3550 5 &
• Detlef P. van Vuuren   ORCID: orcid.org/0000-0003-0398-2831 1 , 2  

Nature Climate Change volume  11 ,  pages 119–125 ( 2021 ) Cite this article

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An Author Correction to this article was published on 18 February 2021

This article has been updated

Renewable energy resources, which depend on climate, may be susceptible to future climate change. Here we use climate and integrated assessment models to estimate this effect on key renewables. Future potential and costs are quantified across two warming scenarios for eight technologies: utility-scale and rooftop photovoltaic, concentrated solar power, onshore and offshore wind energy, first-generation and lignocellulosic bioenergy, and hydropower. The generated cost–supply curves are then used to estimate energy system impacts. In a baseline warming scenario, the largest impact is increased availability of bioenergy, though this depends on the strength of CO 2 fertilization. Impacts on hydropower and wind energy are uncertain, with declines in some regions and increases in others, and impacts on solar power are minor. In a future mitigation scenario, these impacts are smaller, but the energy system response is similar to that in the baseline scenario given a larger reliance of the mitigation scenario on renewables.

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Data availability.

Source data are provided with this paper.

Code availability

The code that produced the renewable energy potentials and cost curves can be found at https://github.com/davidgernaat . PBL holds the proprietary rights to the IMAGE computer code; extensive documentation is provided ( https://models.pbl.nl/image ).

Change history

19 february 2021.

A Correction to this paper has been published: https://doi.org/10.1038/s41558-021-01005-w

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Acknowledgements

A. Righart is acknowledged for editing part of the manuscript. The research leading to these results has received funding from EU’s Horizon 2020 Navigate (no. 821124). We thank the JPI Climate initiative and participating grant institutes for funding the ISIpedia project.

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PBL Netherlands Environmental Assessment Agency, The Hague, The Netherlands

David E. H. J. Gernaat, Harmen Sytze de Boer, Vassilis Daioglou & Detlef P. van Vuuren

Copernicus Institute of Sustainable Development, Utrecht University, Utrecht, The Netherlands

David E. H. J. Gernaat, Harmen Sytze de Boer, Vassilis Daioglou, Seleshi G. Yalew & Detlef P. van Vuuren

Faculty of Technology, Policy, and Management, Technical University of Delft, Delft, The Netherlands

Seleshi G. Yalew

Wageningen Environmental Research, Wageningen University and Research, Wageningen, The Netherlands

Potsdam Institute for Climate Impact Research, Member of the Leibniz Association, Potsdam, Germany

Christoph Müller

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Contributions

D.E.H.J.G. and D.P.v.V. developed the idea. D.E.H.J.G. designed the experiments and wrote the manuscript. S.G.Y. managed all climate input data. C.M. conducted model simulations and provided bioenergy yield data. V.D. calculated the bioenergy potential. All authors discussed the results and contributed to the manuscript.

Corresponding author

Correspondence to David E. H. J. Gernaat .

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The authors declare no competing interests.

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Peer review information Nature Climate Change thanks Andre Lucena, Hannes Weigt and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.

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Extended data

Extended data fig. 1 gcm model mean for historical 30-year (1970–2000) average climate data used as input to calculate energy potentials..

a , Solar irradiance (kWh m −2 day −1 ) (global horizontal). b , Temperature (°C). c , Wind speeds (m s −1 ). d , Runoff (kg m −2 s −1 ). e , Sugar cane and maize yields (crop selected with highest yield per cell) (%). f , Lignocellulosic crop yields (switchgrass and Miscanthus, or trees) (crop selected with highest yield per cell) (%).

Source data

Extended data fig. 2 gcm model mean change of climate patterns and yields in rcp2.6..

a , solar irradiance (%) (global horizontal). b , temperature (%). (%). c , Wind speed (%). d , Runoff (%). e , Sugar cane and maize yields with CO 2 fertilisation (crop selected with highest yield per cell) (%). f , Lignocellulosic crop yields (switchgrass and Miscanthus, or trees) with CO 2 fertilisation (crop selected with highest yield per cell) (%).

Extended Data Fig. 3 Schematic illustration showing how climatic parameters can change the design discharge and load factors of a hydropower system.

a , The purple line shows a typical historical discharge pattern at a hydropower location with a wet and dry season. The yellow line shows how new climate-change-induced precipitation patterns influence the discharge pattern, in this case with a wetter wet season and a prolonged dry season. Ordering the yellow line data into a flow duration curve, as illustrated in b , changes the design flow and design load factors. b , The flow duration curve with the new discharge pattern. The new discharge pattern (yellow line in a ) forms a new flow duration curve with new design flow (defined as the fourth highest discharge month) and new design load factor (note that the months have shifted, too). The grey lines represent the old climate, the black lines illustrate the new.

Extended Data Fig. 4 Multi-model mean change of technical potential in RCP2.6.

a , Utility-scale PV and rooftop PV. b , Concentrated Solar Power (CSP). c , Onshore and offshore wind energy. d , Hydropower. e , First-generation bioenergy with CO 2 fertilisation. f , Lignocellulosic bioenergy with CO 2 fertilisation.

Extended Data Fig. 5 The global mean changes in technical potential per renewable technology under RCP2.6.

a, Absolute change in technical potential compared to the historical situation (EJ y −1 ). b, Relative change in technical potential compared to the historical situation (%).

Extended Data Fig. 6 Shared Socioeconomic Pathways (SSPs) assumptions for IMAGE.

a , Global population (million) for SSP1-3. b , Economic development for SSP1-3 (GDP trillion USD 2005 y −1 ). c , Global final energy demand per sector for SSP1-3. d , Global primary energy use per energy carrier for SSP2 and SSP2-RCP26.

Extended Data Fig. 7 The direct and indirect effect of climate impacts on cumulative primary energy in SSP2-RCP60-CI without CO 2 fertilisation (2070–2100).

The top row shows the combined ( a ), direct ( b ) and indirect ( c ) mean change between a run with and without climate impacts on renewables in cumulative energy production (2070–2100) per technology group (%). The bottom row shows the uncertainty using the combined (d), direct (e) and indirect (f) absolute and relative standard deviation of the data shown in the top row.

Extended Data Fig. 8 The direct and indirect effect of climate impacts on cumulative primary energy in SSP2-RCP60-CI with CO 2 fertilisation (2070–2100).

The top row shows the combined ( a ), direct ( b ) and indirect ( c ) mean change between a run with and without climate impacts climate impact in cumulative energy production (2070–2100) per technology group (%). The bottom row shows the uncertainty using the combined ( d ), direct ( e ) and indirect ( f ) absolute and relative standard deviation of the data shown in the top row.

Extended Data Fig. 9 The combined relative effect of SSP2-RCP60-HRES climate impacts on cumulative primary energy supply per IMAGE model region.

a , The mean change (over the GCMs) of the cumulative primary energy supply in the period 2070–2100 per technology. b , The absolute (shown in orange gradient) and relative (shown in grey dot size) standard deviation of the data shown in a.

Extended Data Fig. 10 The combined relative effect of SSP2-RCP26 climate impacts on cumulative primary energy supply per IMAGE model region.

Supplementary information, supplementary information.

Supplementary Texts 1–3, Tables 1–5 and Figs. 1–12.

Source Data Fig. 1

Model mean (GFLD-ESM2M, HadGEM2-ES, IPSL-CM5A-LR and MIROC5) historical (1970–2000), RCP2.6 (2070–2100) and RCP6.0 (2070–2100) climate input data: Solar irradiance (kWh m −2 per day) (global horizontal), temperature (°C), wind speed (m s −1 ), runoff (kg m −2 s −1 ), sugar cane and maize yields (t ha −1 yr −1 ) and lignocellulosic crop yields (switchgrass and Miscanthus , or trees) (t ha −1 yr −1 ).

Source Data Fig. 2

Technical potential per GCM for the historical (1970–2000) period, and the future RCP2.6 (2070–2100) and RCP6.0 (2070–2100) periods: utility-scale PV and rooftop PV, concentrated solar power (CSP), pnshore and offshore wind energy, hydropower, first-generation bioenergy, and lignocellulosic bioenergy with and without CO 2 fertilization.

Source Data Fig. 3

Technical potential per region, GCM and RCP for: utility-scale PV and rooftop PV, concentrated solar power (CSP), onshore and offshore wind energy, hydropower, first-generation bioenergy, and lignocellulosic bioenergy with and without CO 2 fertilization.

Source Data Fig. 4

Primary energy supply (2071–2100) based on historical, RCP2.6 and RCP6.0 climate with and without CO 2 fertilization (PJ).

Source Data Extended Data Fig. 1

Model mean (GFLD-ESM2M, HadGEM2-ES, IPSL-CM5A-LR and MIROC5) historical (1970–2000), RCP2.6 (2070–2100) and RCP6.0 (2070–2100) climate input data: solar irradiance (kWh m −2 per day) (global horizontal), temperature (°C), wind speed (m s −1 ), runoff (kg m −2 s −1 ), sugar cane and maize yields (t ha −1 yr −1 ) and lignocellulosic crop yields (switchgrass and Miscanthus , or trees) (t ha −1 yr −1 ).

Source Data Extended Data Fig. 2

Source data extended data fig. 4, source data extended data fig. 5, source data extended data fig. 7, source data extended data fig. 8, source data extended data fig. 9, source data extended data fig. 10, rights and permissions.

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Gernaat, D.E.H.J., de Boer, H.S., Daioglou, V. et al. Climate change impacts on renewable energy supply. Nat. Clim. Chang. 11 , 119–125 (2021). https://doi.org/10.1038/s41558-020-00949-9

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Received : 13 May 2019

Accepted : 15 October 2020

Published : 11 January 2021

Issue Date : February 2021

DOI : https://doi.org/10.1038/s41558-020-00949-9

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Energy security concerns and new policies lead to largest ever upward revision of iea’s renewable power forecast.

The first truly global energy crisis, triggered by Russia’s invasion of Ukraine, has sparked unprecedented momentum for renewables. Fossil fuel supply disruptions have underlined the energy security benefits of domestically generated renewable electricity, leading many countries to strengthen policies supporting renewables. Meanwhile, higher fossil fuel prices worldwide have improved the competitiveness of solar PV and wind generation against other fuels. 

Total renewable electricity capacity additions, 2001-2027

Renewable capacity expansion in the next five years will be much faster than what was expected just a year ago. Over 2022-2027, renewables are seen growing by almost 2 400 GW in our main forecast, equal to the entire installed power capacity of China today. That’s an 85% acceleration from the previous five years, and almost 30% higher than what was forecast in last year’s report, making it our largest ever upward revision. Renewables are set to account for over 90% of global electricity capacity expansion over the forecast period. The upward revision is mainly driven by China, the European Union, the United States and India, which are all implementing existing policies and regulatory and market reforms, while also introducing new ones more quickly than expected in reaction to the energy crisis. China’s 14th Five-Year Plan and market reforms, the REPowerEU plan and the US Inflation Reduction Act are the main drivers of the revised forecasts. 

Upward revisions to renewable capacity expansion forecasts from Renewables 2021 to Renewables 2022

Renewables will transform the global power mix through 2027, becoming the largest source of electricity.

Renewables become the largest source of global electricity generation by early 2025, surpassing coal. Their share of the power mix is forecast to increase by 10 percentage points over the forecast period, reaching 38% in 2027. Renewables are the only electricity generation source whose share is expected to grow, with declining shares for coal, natural gas, nuclear and oil generation. Electricity from wind and solar PV more than doubles in the next five years, providing almost 20% of global power generation in 2027. These variable technologies account for 80% of global renewable generation increase over the forecast period, which will require additional sources of power system flexibility. Meanwhile, the growth of dispatchable renewables including hydropower, bioenergy, geothermal and concentrated solar power remains limited despite their critical role in integrating wind and solar PV into global electricity systems. 

Global electricity generation by technology, 2015, 2021 and 2027

Solar PV’s installed power capacity is poised to surpass that of coal by 2027, becoming the largest in the world. Cumulative solar PV capacity almost triples in our forecast, growing by almost 1 500 GW over the period, exceeding natural gas by 2026 and coal by 2027. Annual solar PV capacity additions increase every year for the next five years. Despite current higher investment costs due to elevated commodity prices, utility-scale solar PV is the least costly option for new electricity generation in a significant majority of countries worldwide. Distributed solar PV, such as rooftop solar on buildings, is also set for faster growth as a result of higher retail electricity prices and growing policy support to help consumers save money on their energy bills. 

Share of cumulative power capacity by technology, 2010-2027

Global wind capacity almost doubles, with offshore projects accounting for one-fifth of the growth. Over 570 GW of new onshore wind capacity are forecast to become operational over the 2022-27 period. However, onshore wind additions will only break their annual record, set in 2020, by the end of the forecast period because of lengthy permitting procedures and lack of improvements to grid infrastructure. Offshore wind growth accelerates globally, while Europe’s share of installed offshore capacity declines from 50% in 2021 to 30% in 2027 as China’s provincial policies support faster expansion and the United States becomes a sizeable market at the end of the forecast period.

Improved policies can narrow the gap to net zero by 2050

Our accelerated case shows global renewable capacity can expand by an additional 25% compared with the main forecast if countries address policy, regulatory, permitting and financing challenges. Most advanced economies face challenges to implementation, especially related to permitting and grid infrastructure expansion. In emerging economies, policy and regulatory uncertainties still remain major barriers to faster renewable energy expansion. Finally, in developing economies, weak grid infrastructure and a lack of access to affordable financing hamper the timely commissioning of projects in our main forecast. Should countries address those challenges, global renewable capacity could expand by almost 3 000 GW. This faster increase would significantly narrow the gap on the amount of renewable electricity growth that is needed in a pathway to net zero emissions by 2050.

Renewable capacity growth in the main and accelerated cases, 2010-2027

Russia’s invasion of ukraine is a turning point for renewables in europe.

The war is expediting Europe’s clean energy transitions . The energy crisis hit the EU while it was already discussing ambitious renewables targets under the Fit for 55 package. After Russia invaded Ukraine in February 2022, energy security emerged as an additional strong motivation to accelerate renewable energy deployment. At the EU level, the European Commission’s REPowerEU plan released in May 2022 proposes ending the bloc’s reliance on Russian fossil fuels by 2027. Among other goals, the plan aims to increase the share of renewables in final energy consumption to 45% by 2030, exceeding the 40% previously under negotiation.

Europe’s renewable electricity expansion doubles over the 2022-2027 period as energy security concerns add to climate ambitions. Many European countries passed or proposed action plans to further raise their ambitions, increased policy support and addressed non-financial challenges. Our forecast for growth in the EU has been revised upward significantly (by 30%) from last year’s report, led by Germany (50% higher) and Spain (60% higher). Germany has increased renewable electricity targets, introduced higher auction volumes and improved remuneration for distributed PV while reducing permitting timelines. Spain has streamlined permitting for solar PV and wind plants, and increased grid capacity for new renewable energy projects.

Renewable capacity growth outside of China, main and accelerated cases, 2010-2027

Sluggish growth of renewables in the transport and heating sectors holds back higher renewable energy penetration in the EU. In our main case, renewables’ share of transport energy demand expands from 9% in 2020 to 15% in 2027, which is not in line with the EU’s aspirations for 2030. While demand for electric vehicles and biofuel expands, state and EU-level incentives to meet higher renewable shares are not in place in most cases. For heating and cooling, the annual increase in the share of renewables would need to almost quadruple from historical and forecasted growth to be on track with the REPowerEU plan targets.

Policy improvements can drastically increase renewables expansion and put the European Union in line with REPowerEU goals. Our main forecast falls short of the modelled goals of REPowerEU plan for all sectors. For electricity, in order to reach the installed capacity needed to generate 69% of electricity from renewables by 2030, average annual net additions need to be 30% higher for solar PV and more than twice as high for wind. Faster acceleration of wind and solar PV would require EU member states to reduce permitting and licensing timelines, extend auction schemes with clear schedules, redesign auctions to reflect the increasing cost of renewables and their energy security benefits, and improve incentive schemes for distributed solar PV generation. If EU governments rapidly implement these changes, the accelerated case sees growth 30% higher, putting the EU on track with its more ambitious REPowerEU modelled goals. For transport, countries would need to implement more ambitious transport decarbonisation programmes, including both biofuels and EVs. In the accelerated case, renewable energy’s share in transport climbs to 20% by 2027, narrowing the gap with the EU goal of 29% by 2030. For heating and cooling, accelerating the rollout of heat pumps will require overcoming high upfront costs through incentives, regulations and low-cost financing for households to facilitate investment. 

Renewable heat progress summary in the European Union, 2020-2030

Renewable electricity progress summary in the european union, 2020-2030, renewable transport progress summary in the european union, 2020-2030.

Market interventions must shelter citizens from high costs but without hurting the business case for new renewable energy investments. In October 2022, the European Council passed emergency regulations to protect vulnerable customers from high energy prices, including windfall profit levies on electricity generators. While there is strong rationale behind these interventions, their impact needs to be assessed in terms of the potential harm to renewable developers’ capacity to invest in new projects. Current and proposed market interventions in Europe (such as wholesale market caps and windfall-profit taxes) could create uncertainties for renewable energy investments if they are not well designed or co-ordinated across countries. Moreover, the ongoing energy crisis has also sparked new discussions within the European Union concerning possible future electricity market design. These proposed reforms could, in principle, boost market-driven renewable energy deployment, ensure energy security and encourage investment in flexibility resources. However, it is important that any proposals be carefully and transparently prepared, with clear visibility on timing and involving all relevant stakeholders, in order to avoid unintended uncertainty among investors.

China, the United States and India all double their renewable capacity expansion in the next five years, accounting for two-thirds of global growth

China is forecast to install almost half of new global renewable power capacity over 2022-2027, as growth accelerates in the next five years despite the phaseout of wind and solar PV subsidies. Policy guidelines and targets in China’s new 14th Five-Year Plan on renewable energy are the basis for this year’s 35% upward revision on last year’s forecast. Very ambitious new renewable energy targets, market reforms and strong provincial government support provide long-term revenue certainty for renewables. In most Chinese provinces, utility-scale renewables are cheaper than regulated coal electricity prices, driving rapid adoption. In the main forecast, China is expected to reach its 2030 target of 1 200 GW of total wind and solar PV capacity five years in advance.

In the United States, the Inflation Reduction Act is providing unprecedented long-term policy visibility for wind and solar PV projects. Passed in August 2022, the legislation extended tax credits for renewables until 2032. In addition, 37 out of 50 states have renewable portfolio standards and goals supporting expansion. By 2027, US annual wind and PV capacity additions double compared with 2021. Given that the United States now has clear long-term policy visibility, any remaining forecast uncertainties relate to supply chain constraints, trade measures, grid infrastructure inadequacy and long permitting lead times.

In India, new installations are set to double over our forecast period, led by solar PV and driven by competitive auctions implemented to achieve the government’s ambitious target of 500 GW of non-fossil capacity by 2030.

New policies in the United States and India can lead to more diversified global solar PV manufacturing

Solar PV manufacturing investment in India and the United States is expected to reach almost USD 25 billion over 2022-2027, a sevenfold increase compared with the last five years. India’s Production Linked Incentives (PLI) initiative closes nearly 80% of Indian manufacturers’ investment cost gap with the lowest-cost manufacturers in China. Meanwhile, fully monetising manufacturing tax credits in the United States could bring all segments of PV manufacturing to cost parity with the lowest-cost manufacturers. In addition to manufacturing subsidies, tariffs on imported PV equipment and local-content premiums encourage project developers to purchase domestically manufactured products in both India and the United States. 

China's share of production capacity by market segment, 2021 and 2027

Total investment in solar pv manufacturing capacity by country and region, 2016-2027.

The global solar PV supply chain is diversifying, but China will continue to dominate manufacturing. Despite growing investment in the United States and India, China is forecast to invest USD 90 billion over the forecast period, more than triple the expected investment by the rest of the world combined. China’s share in global manufacturing capacity could decrease slightly, from 80‑95% today to 75-90%, depending on the manufacturing segment. Furthermore, if countries maintain trade policies that limit imports and favour domestically produced PV products, greater geographical distribution of production could result in China’s share shrinking more significantly to 60-75% by 2027 depending on the segment. At the same time, investment plans also indicate supply significantly exceeding expected global PV demand even in the most optimistic forecasts by 2027. In the absence of faster growth in global demand, this could result in plant utilisation factors as low as half today’s levels for all manufacturing segments in China. 

Policy efforts are turning hydrogen production from wind and solar PV into a new growth area

Global renewable capacity dedicated to producing hydrogen increases 100-fold in the next five years, offering opportunities to decarbonise industry and transport. Policies and targets introduced in more than 25 countries across all continents are expected to result in 50 GW of wind and PV capacity focused on producing hydrogen over the 2022-2027 period. This expansion is geographically diversified, with China leading the growth, followed by Australia, Chile and the United States. Together, these four markets account for roughly two-thirds of dedicated renewable capacity for hydrogen production. While renewable capacity dedicated to hydrogen accounts for only 2% of our main forecast, the share is significantly higher at 13% in the Middle East and North Africa and 5% in Latin America because of export opportunities. 

Total renewable capacity dedicated to hydrogen production in the main case by region, 2021-2027

Total renewable capacity dedicated to hydrogen production in the main and accelerated case globally, 2021-2027, climate and energy goals underpin robust biofuels forecast.

Total global biofuel demand expands by 35 000 million litres per year (MLPY), or 22%, over 2022-2027 in the main forecast. The United States, Canada, Brazil, Indonesia and India make up 80% of global expansion in biofuel use, as all five countries have comprehensive policy packages that support growth. Renewable diesel is expected to lead the global expansion for the first time mainly, driven by policies designed to reduce greenhouse gas emissions in advanced economies. Biojet fuel demand expands significantly to 3 800 MLPY in our main forecast – 35 times the 2021 level – to account for nearly 1% of total jet fuel consumption. Recent US tax incentives and the EU’s ReFuelEU target propel most of the growth in biojet fuel. Meanwhile, rising ethanol and biodiesel use occurs almost entirely in emerging economies as they aim to reduce oil imports while benefiting the local economy by using indigenous resources.  

Waste and residues are a key growth area for biofuels but require action to prevent a supply crunch

One-third of new biofuels production is set to come from waste and residues by 2027. Transport greenhouse gas reduction policies in Europe and the United States are fuelling global demand for waste and residues. The United States’ Inflation Reduction Act drives a 20% increase in our biojet and renewable diesel forecast. The policy rewards lower greenhouse gas intensity fuels, driving biofuel producers to focus on waste and residues. In Europe, the existing Renewable Energy Directive and member state policies reward biofuels made from waste and residues. Most biofuel growth in Europe is also for renewable diesel and biojet. Singapore and China are also expanding renewable diesel and biojet production from waste and residues to serve the European and US markets. 

Global biofuel production growth by feedstock type in the main case, 2022-2027

Global biofuel production by feedstock type in the main case, 2010-2027.

Unprecedented demand growth is straining supply chains, but government policies and innovation may yet provide relief. Demand for waste and residue oils and fats is expected to nearly exhaust supplies of the most readily available sources by 2027. In advanced economies, supply limits are prompting biodiesel, renewable diesel and biojet producers to secure conventional vegetable oils such soybean oil and rapeseed oil. Vegetable oil supplies dedicated to biofuel production expand to 23% from 17% over the forecast period. However, higher prices due to strong demand will prompt companies and governments to improve feedstock supply chains, seek out new supplies and develop new techniques. Policies and innovation can also help unlock untapped supplies and support technology development, enabling the use of more widely available feedstocks for sustainable biofuel production.

Heating with renewables grows but not fast enough to contain fossil fuel use

Modern renewable consumption for heating purposes is expected to increase by almost one-third during 2022-2027, raising the modern use of renewables in heat from 11% to 14% by 2027. Renewable heat currently benefits from policy momentum, in particular in the European Union, in response to the energy security concerns fuelled by the current energy crisis. In both the industry and buildings sectors, the combination of rising shares of renewables in the power sector and greater reliance on electricity for heating, including through heat pumps, makes the largest contribution to renewable heat uptake. Nevertheless, renewable heat developments are insufficient to contain fossil fuel-based heat consumption.

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Renewable-energy development in a net-zero world

The rapid maturation of wind and solar power has been nothing short of astonishing. Not long ago, the development of new solar and wind farms was typically driven by small regional players, and the cost was significantly higher than that of a coal plant. Today, the cost of renewables has plummeted, and many solar and wind projects are undertaken by large multinational companies, which often also announce staggering development targets.

About the authors

This article is a collaborative effort by Florian Heineke, Nadine Janecke, Holger Klärner, Florian Kühn , Humayun Tai , and Raffael Winter , representing views from McKinsey’s Electric Power & Natural Gas Practice.

Over the past decade, the growth of renewable energy has consistently and dramatically outperformed nearly all expectations (Exhibit 1). Upward corrections of estimates have become something of a ritual.

But this growth story is just getting started. As countries aim to reach ambitious decarbonization targets, renewable energy—led by wind and solar—is poised to become the backbone of the world’s power supply. Along with capacity additions from major energy providers, new types of players are entering the market (Exhibit 2). Today’s fast followers include major oil and gas companies, which aim to shift their business models to profit from the increased demand for renewables and the electrification of vehicles, and private-equity players and institutional investors that make renewable energy a central component of their investment strategy. Leaders in the shipping industry are investing in renewables to enable the production of hydrogen and ammonia as zero-emission fuel sources; steel manufacturers are eyeing green hydrogen to decarbonize their steel production, with renewables providing the green electricity for the process. Car manufacturing companies are also striking renewable-energy deals to help power their operations and manufacturing, as well as making investments in wind and solar projects.

McKinsey estimates that by 2026, global renewable-electricity capacity will rise more than 80 percent from 2020 levels (to more than 5,022 gigawatts). 1 Global Energy Perspective 2022 , McKinsey, April 2022. Of this growth, two-thirds will come from wind and solar, an increase of 150 percent (3,404 gigawatts). By 2035, renewables will generate 60 percent of the world’s electricity. 2 Global Energy Perspective 2022 , McKinsey, April 2022. But even these projections might be too low. Three years ago, we looked at advances made by renewable energy and asked, “How much faster can they grow?” 3 “ Rethinking the renewable strategy for an age of global competition ,” McKinsey, October 11, 2019. The answer is: faster than you think they can.

Three core capabilities for wind and solar developers

This race to build additional solar and wind capacity increases the pressure on developers to execute efficiently and heightens competition for finite resources. Still, the three winning capabilities we identified three years ago as important for building or expanding a renewables business are even more critical now. They form the bedrock required to tackle upcoming challenges:

• Value-chain excellence. As competition intensifies and government support for renewables subsides, strong capabilities across the entire value chain are the required cost of admission. For instance, gaining access to scarce amounts of attractive land will require differentiation in project origination and development. As margins squeeze and operators’ exposure to risk increases, ambitious companies will want to explore new, profitable offtake markets for their electricity, such as data centers or hydrogen electrolyzers for industrial production.
• Economies of scale and skill. Driven by the rapid scaling of the renewables industry, many players have built efficient operating models. However, finding employees with the necessary skills and capabilities, particularly in high-demand areas such as project development and engineering, is becoming a bottleneck for growth ambitions.
• Agile operating model. Agility and speed will be key in finding innovative ways to integrate partners and in establishing robust, high-performing supply chains. They will also enable businesses to shift resources quickly to the biggest value pools and respond to changes in the landscape, such as shifting regulations or price volatility.

Four challenges that will define the new era of renewable energy

Leveraging these capabilities as a strong foundation, successful renewables developers must navigate an increasingly complex and competitive landscape. Specifically, they will have to focus on and address four emerging challenges:

• A scarcity of top-quality land. Developers are in a constant scramble to identify new sites with increasing speed. Our analysis in Germany, a country aiming to nearly double its share of electricity coming from renewables by 2030, offers a glimpse into the constraints. Of the 51 percent of the country’s land that is potentially suitable for onshore wind farms, regulatory, environmental, and technical constraints eliminate all but 9 percent. 4 McKinsey land use optimization model. Meeting capacity targets will mean adding wind turbines to 4 to 6 percent of the country, giving developers very little room for error.
• A blue-collar and white-collar labor shortage. Across economies, the “Great Attrition” is making it difficult for companies to find and keep employees. Since April 2021, 20 million to 25 million US workers have quit their jobs, and 40 percent of employees globally say they are at least somewhat likely to leave their current position in the next three to six months. 5 Aaron De Smet, Bonnie Dowling, Bryan Hancock, and Bill Schaninger, “ The Great Attrition is making hiring harder. Are you searching the right talent pools? ,” McKinsey Quarterly , July 13, 2022; Table 4. Quits levels and rates by industry and region, seasonally adjusted, US Bureau of Labor Statistics, updated October 4, 2022. This environment presents a particularly acute challenge for industries such as renewable energy, where specific technical expertise and experience are crucial elements of success. For instance, our analysis suggests that between now and 2030, the global renewables industry will need an additional 1.1 million blue-collar workers to develop and construct wind and solar plants, and another 1.7 million to operate and maintain them. 6 Renewable energy benefits: Leveraging local capacity for onshore wind , International Renewable Energy Agency (IRENA), 2017; Renewable energy benefits: Leveraging local capacity for offshore wind , IRENA, 2018; Renewable energy benefits: Leveraging local capacity for solar PV , IRENA, 2017. This includes construction laborers, electricians, truck and semitrailer drivers, and operating engineers.
• Supply chain pressures. The soaring cost of steel, manufacturing disruptions caused by extended lockdowns in China, and transportation backlogs at ports are already making it difficult for wind and solar developers to complete projects in their pipeline on time and on budget. Some of these pressures will abate as others move to the forefront. For instance, many of the raw materials needed to manufacture solar panels and wind turbines are projected to be in short supply. This includes nickel, copper, and rare earth metals such as neodymium and praseodymium, which are indispensable for the creation of magnets used in wind turbine generators.
• Pressure on profits and volatility of returns in the short term. The increasing number of players moving into the renewable-development space, combined with reduced levels of government support and higher costs of materials, technology, and financing, is putting pressure on returns. At the same time, an all-time-high price volatility creates uncertainty and market risk.

Renewables developers will need to act decisively to prepare for these upcoming challenges. In a series of future articles, we provide detailed insights on each of these pressures and share potential ways players can take action.

Florian Heineke is a consultant in McKinsey’s Frankfurt office; Nadine Janecke is an associate partner in the Hamburg office; Holger Klärner is a partner in the Berlin office; Florian Kühn is a partner in the Oslo office; Humayun Tai is a senior partner in the New York office; and Raffael Winter is a partner in the Düsseldorf office.

The authors wish to thank Nadia Christakou, Florent Erbar, David Frankel, Emil Hosius, Anna Kemp, Nadine Palmowski, Andreas Schlosser, Sophia Spitzer, Christian Staudt, and Jakub Zivansky for their contributions to this article.

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Download document, call for proposals: innovative ways for financing renewable energy projects in asean and east asia.

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Jakarta, 9 March 2022:  The Economic Research Institute for ASEAN and East Asia (ERIA) is inviting research proposals for a study on 'Innovative Ways for Financing Renewable Energy Projects in ASEAN and East Asia'. [1]

The proposal will include at least the following parts:

• Research question (s);
• Background and contribution to the literature.
• Data and methodology (analytical framework)
• Expected policy implications. ERIA studies are policy orientated, and it is essential that the study delivers policy implications for ASEAN and East Asia.

Together with the proposal, the lead researcher will submit a brief CV with a list of publications (if the researcher has not been a member of ERIA’s EMI Working Group in the past) and a sample paper, preferable in a journal article style.

Timeframe and administrative issues

To be fully considered, proposals should be submitted to Dr. Han Phoumin ( [email protected] ) and to Prof. Farhad Taghizadeh-Hesary ( [email protected] ) no later than  15 May 2022 . Early submission is encouraged. Only successfully selected proposals/authors will be notified, expectedly by the end of May 2022.

ERIA will fund not less than USD 4,000 for each proposed study. At least, we will have one online meeting

All studies are to be finalized by end of November 2022. This deadline is firm to make it possible to report the results to Energy Policy Makers as well as to be submitted for the international book publication.

The Economic Research Institute for ASEAN and East Asia (ERIA) is inviting research proposals for studies related to innovative ways for financing renewable energy projects in ASEAN and East Asia.

ERIA is an international organization established by the 16 member countries of the East Asia Summit (EAS). It is expected to contribute intellectually to the regional efforts for ASEAN Community building and East Asia economic integration. Its role is to provide policy analyses and recommendations to Leaders and Ministers at regional meetings such as the ASEAN Economic Ministers Meeting, EAS Energy Ministers Meeting (EMM), ASEAN Summit, and the EAS.

The economic recovery plans for 2021–2022 increased the global energy demand, resulting in a sharp increase in the prices of oil and other fossil fuels. However, the increase in fossil fuel prices could not stimulate new investments in renewable energy and energy-efficiency projects. The main reason behind this low level of investment and the reluctance of private investors toward the green sector is the existence of various risks and economic uncertainty, which has forced the investors to look for safer assets. This low level of interest toward renewable energy and green infrastructure investments threatens the Paris Agreement on Climate Change and the achievement of several sustainable development goals (SDGs).

The current investment levels in renewable energy and energy efficiency projects in the ASEAN region and East Asia are insufficient to achieve the carbon neutrality goals by 2050. Renewable energy projects have more difficulties compared to other projects in accessing finance. The main challenges that renewable energy projects face for accessing finance are lack of long-term financing, the existence of various risks, Lower rate of return in renewable energy projects, and lack of capacity in market actors. Hence, for achieving energy transition and carbon neutrality goals, we need to scale up the financing of investments that provide environmental benefits through innovative ways. In the wake of COVID-19, the importance of innovative ways and policies for enhancing investments in renewable energy projects to achieve climate-related goals is highlighted.

Potential issues for the study

With this background, ERIA would like to invite proposals of study on innovative ways for financing renewable energy projects in ASEAN and East Asia.

The call for proposals seeks empirical and policy-oriented studies on ASEAN member states and East Asian economies that deal with innovative and market-based solutions for unlocking private investments in renewable energy projects. The final manuscripts will consist of papers developed based on a sound theoretical framework and significantly contribute to the literature. The project aims to collectively provide policy recommendations for designing funding strategies for renewable energy development in ASEAN and East Asia. The project aims to provide lessons to end-users, policymakers, and market players in ASEAN and East Asia on access to finance for renewable energy development.

Proposals may deal with, but not limited, to the following:

• Innovative and market-based instruments and renewable energy deployment.
• Role of green finance in renewable energy development.
• Analyzing renewable energy financing programs in ASEAN and East Asia.
• Obstacles for renewable energy financing and solutions.
• Green bonds, renewable energy, and energy transition
• Carbon taxation for renewable energy development.
• Role of governments in unlocking the private investments in renewable energy projects.
• Roles of institutional innovation, innovation in products, and processes in renewable energy development.
• Public supports for investments in renewable energy projects during the pandemic and in the post-pandemic.
• Role of new technologies in easing access to finance for renewable energy development.
• Case studies on utilizing innovative finance and FinTech in funding renewable energy projects.
• Application of AI, DLT or blockchain, peer-to-peer lending platforms, big data, internet-based and mobile-based payments, IoT, matchmaking platforms including crowdlending and tokenizing green assets in scaling up renewable energy financing.
• Role of venture capital, crowdfunding, angel investment, and partner financing in funding renewable energy projects.

Terms of Reference

Innovative Ways for Financing Renewable Energy Projects in ASEAN and East Asia

[1]  Please note that this proposal is sub-theme under the project of “Economic Analysis of Large-Scale Deployment of Solar PV with Battery Storage in ASEAN and East Asia

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How a Northeastern scientist is turning carbon dioxide into renewable ethanol

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Assistant professor Magda Barecka is designing a chemical reactor that could produce renewable, carbon-neutral ethanol for use in fuels. Her research recently received support from the U.S. Department of Energy.

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Magda Barecka is envisioning a world without fossil fuels. 

An assistant professor of chemical engineering and chemistry and chemical biology at Northeastern University, Barecka says that the aim of her research is to enable “our society to function, to have all the chemicals that we need, without using fossil fuels.”

Like alchemists, Barecka and her team transform one thing into another — but instead of lead into gold, they transform carbon dioxide into ethanol. 

After extracting carbon dioxide from the atmosphere and introducing it to a proprietary liquid in the base of their electrochemical reactor, a series of electrified metal plates do the transformative work, producing liquid ethanol that can be synthesized into a variety of fuels.

Despite its ability to burn — and thus serve as a fuel — ethanol is an alcohol and not a fossil fuel.

When it’s eventually burned, the ethanol will release carbon dioxide back into the atmosphere — but because that CO2 was originally taken from the air, the result is a carbon-neutral cycle.

Barecka and her team have published extensively on these topics, including here and here .

Their chemical reactor does require electricity, however, which still often comes from fossil fuel-based power plants. 

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If the electricity required to make this conversion were to come from a renewable source, then the entire process could be made carbon neutral, a closed loop.

Now, Barecka’s research has received support from the U.S. Department of Energy through a program that supports projects that use “renewable energy sources like wind and solar to produce liquids for sustainable fuels or chemicals that can be transported and stored as easily as carbon-intensive liquids like gasoline or oil.”

“It takes a relatively long time to connect a new, renewable power plant to the grid,” Barecka says, which “could deliver energy, renewable energy, [with a] very low carbon footprint,” and they come with their own logistical and financial complications.

Working with the Department of Energy, Barecka and her team are “looking into what is the most efficient way to use this renewable electricity. So we really care about the amount of the product that we can get by using a specific amount of electricity coming from a renewable plant.”

Using electricity from a renewable power plant “to drive any chemical reactions,” she says, “we could really overcome the main bottleneck that we see right now in the construction of new renewable power plants.

“There’s a very interesting synergy, that by providing a technology that uses renewable electricity, we can ultimately help to have more renewable power plants in general.

“We want to create something that will unlock many different possibilities, that you can get many things that our society needs” without putting more greenhouse gases into the air, Barecka says.

Jet fuel is just one of the applications ethanol can be employed for.

The aviation market, Barecka continues, “is very customer oriented, and they take very seriously the fact that people are starting to be very careful about the carbon footprint of their travels.”

The aviation market already has “an existing method to synthesize fuels that use ethanol,” she says. “So that’s a great thing that we’re doing, really plugging into something existing so it can have a broader impact.”

“Whatever we develop, we want it to be applicable in the real-life scenario,” she says. “So that means that it has to fit into an existing supply chain.”

“I do recognize that there are a lot of logistics and multiple factors beyond science that are involved” in shifting away from fossil fuel reliance, Barecka says. “But I do believe that if we think deeply and differently about how we perform chemical reactions, we do have opportunities to use different energy sources.

“We can use those energy sources efficiently, and there is nothing from a thermodynamic point of view that prevents us from using different carbon sources than fossil fuels.”

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Majorities of Americans Prioritize Renewable Energy, Back Steps to Address Climate Change

1. what americans think about an energy transition from fossil fuels to renewables, table of contents.

• A closer look at the two major party coalitions on climate and energy issues
• What role should government play in communities at high risk of extreme weather?
• How do Americans see Biden’s climate agenda today?
• Do Americans support government efforts to address environmental disparities across communities?
• Public expectations on how a renewable energy transition would impact the country
• Republican support for increasing wind and solar power, while still a majority, continues to edge downward
• Majority of Americans continue to oppose phasing out gasoline cars and trucks by 2035
• U.S. homeowners have a limited appetite for converting home systems to electric
• About three-quarters of Democrats approve of Biden’s direction on climate but many among this group think he could be doing more
• Public support for policies to address climate change
• Protecting the environment and low consumer costs are important considerations for the public in climate proposals
• Majority of Americans support U.S. participation in international climate efforts
• How Americans see the federal government’s role in communities at high risk of extreme weather
• Experiences with extreme weather
• Majorities of Democrats see room for more federal action in areas of environmental protection
• Most Americans see a role for the federal government addressing differences in environmental health risks across communities
• Republicans and Democrats remain far apart over the value of environmental laws and regulations
• Which environmental problems do Americans see in their local area?
• Acknowledgments
• Methodology
• Appendix: Detailed charts on climate, energy, environment

Most Americans think the U.S. should prioritize the development of renewable energy over fossil fuel sources. At the same time, most say they are not ready to stop using fossil fuel energy sources altogether. And a sizable share think the U.S. should never stop using fossil fuel sources.

Renewable sources, such as wind and solar, are expected to make up a growing share of the U.S. energy supply relative to fossil fuel sources such as oil, coal and natural gas in coming years. Last year renewable energy sources, including wind, solar and hydropower, generated more electricity than coal in the U.S. Legislation passed during the Biden administration, such as the Inflation Reduction Act, are expected to increase the pace of an energy transition .

In the new survey, 67% of Americans say the U.S. should prioritize developing alternative energy sources, such as wind, solar and hydrogen technology, while 32% say the priority should be expanding the exploration and production of oil, coal and natural gas.

Read the Appendix for more on this question, including a shift away from renewables among Republicans that occurred at the outset of the Biden administration .

While the public prioritizes renewable energy development, just 31% say they are ready to phase out the use of oil, coal and natural gas completely. A much larger share (68%) say the U.S. should continue to use fossil fuels, alongside renewables, as part of the mix of energy sources the country relies on.

The roughly two-thirds of Americans who support using a mix of renewables and fossil fuels are closely divided over whether the U.S. should ever stop using oil, coal and natural gas: 32% of Americans favor a mix of sources now but think the U.S. should eventually stop using fossil fuel energy sources, while 35% favor using a mix of sources now and say the U.S. should never stop using oil, coal and natural gas.

Republicans and Democrats offer very different views on what role oil, coal and natural gas should play in the country’s energy landscape.

An overwhelming majority of Republicans and Republican leaners (87%) think the U.S. should use a mix of fossil fuel and renewable energy sources. Looking ahead, 57% of Republicans believe the U.S. should never stop using oil, coal, and natural gas.

In contrast, most Democrats and Democratic leaners think the U.S. should end the use of fossil fuels, but there are some differences in views over the timeline.

About half of Democrats (48%) are ready to phase out fossil fuels now; another 35% think they should be part of the mix currently, but that the country should eventually stop using them. A relatively small share of Democrats (15%) say the country should never stop using oil, coal and natural gas.

Americans think a major shift from fossil fuels to renewable energy sources in the U.S. would come with some difficulties for the country. But they also see potential benefits, such as improved air and water quality and a more positive than negative impact on jobs in the energy sector.

Still, many worry that an energy transition would push consumer prices higher. As with views on energy sources generally, Republicans and Democrats have quite different expectations for what a renewable energy transition would bring for the U.S.

Overall, 34% say the country would be very likely to encounter unexpected problems if the U.S. greatly reduces energy production from fossil fuels while increasing production from renewable sources; another 38% say unexpected problems would be somewhat likely.

Among Republicans, a majority (57%) think an energy transition to renewables would very likely lead to unexpected problems and 31% say this would make unexpected problems somewhat likely. A majority of Democrats also think unexpected problems from an energy transition would be at least somewhat likely (60%), but just 14% consider this very likely.

The new survey finds the public has mixed views about the likely effect of an energy transition on the country’s energy independence: 43% think an energy transition would make U.S. independence from foreign energy sources easier and 40% say it would be harder.

A 2022 Center survey found a majority of Americans said reducing U.S. dependence on foreign energy sources should be a top priority for the country’s energy policies.

A 62% majority of Republicans think that energy independence from other countries would be harder with a major shift to reliance on renewable energy sources. By contrast, 62% of Democrats think that energy independence would be easier.

The Center survey asked about a number of potential consequences from shifting away from fossil fuels and toward renewable energy sources.

Americans are most optimistic about how an energy transition would impact environmental quality: 59% think that air and water quality would get better if the U.S. greatly reduced fossil fuel energy production and increased production from renewable sources. Three-in-ten say this energy transition would not have much effect on air and water quality, while 11% say it would make air and water quality worse.

On balance, more Americans think a renewable energy transition would make local job opportunities in the energy sector better (49%) than worse (25%).

Concerns are more pronounced when it comes to prices. Slightly more Americans think an energy transition would make the prices they pay to heat and cool their homes worse (42%) than better (37%). And by a wider margin (44% to 25%) Americans think such a transition would make prices for everyday goods worse than better.

Democrats have a largely positive outlook on what an energy transition would mean for the country. Majorities think it would improve air and water quality (80%) and local job prospects in the energy sector (68%). And, on balance, more think it would help than hurt the frequency of extreme weather events, prices to heat and cool homes, and the reliability of the electrical grid.

Still, Democrats do have some reservations about the impact on consumer prices: 40% think a major shift toward renewable energy would make prices for consumer goods worse, compared with 35% who say this shift would make prices better.

Republicans are largely pessimistic about the likely effects of an energy transition.

Two-thirds of Republicans (66%) think consumer prices would get worse, as would home heating and cooling costs (65%). Roughly six-in-ten Republicans (59%) expect the reliability of the electric grid to go down.

And there’s skepticism toward environmental benefits: 48% say a transition would not have much effect on air and water quality, and 70% think there would be no effect on the frequency of extreme weather events.

Americans remain broadly in favor of expanding solar and wind power: 82% of U.S. adults favor more solar panel farms and 75% favor more wind turbine farms. A smaller majority of Americans (57%) favor expanding nuclear power. Support for expanding other energy sources is lower: Fewer than half support more offshore oil and gas drilling (47%), hydraulic fracturing (44%) or coal mining (38%). Refer to the Appendix for details.

Democrats and Republicans remain deeply divided over fossil fuel development. There’s more common ground when it comes to renewables, though the partisan gap over expanding wind and solar power has been widening.

As of 2020, overwhelming majorities of both Democrats and Republicans were in favor of more solar and wind power. Since that time, Republican support has declined.

In the new survey, 93% of Democrats say they favor more solar panel farms, compared with 70% of Republicans. The share of Republicans who favor more solar power is down 14 percentage points since 2020 and 7 points since the survey last year.

Six-in-ten Republicans favor more wind power in the new survey, down 15 points since 2020 and 4 points in the last year. Meanwhile, 91% of Democrats favor more wind turbine farms.

The drop in support for solar and wind power has been especially pronounced among conservative Republicans. The share of conservative Republicans who favor more solar power is down 17 points from 2020 (from 80% to 63%) and the share who favor more wind power is down 18 points (from 69% to 51%) over the same time period.

Partisan differences remain wide over support for increasing fossil fuel energy sources. For example, 73% of Republicans favor more offshore oil and gas drilling, while just 25% of Democrats favor this.

There are similarly wide partisan differences over expanding hydraulic fracturing for oil and natural gas (68% of Republicans favor vs. 23% of Democrats) and coal mining (63% of Republicans vs. 16% of Democrats).

Republicans’ levels of support for more hydraulic fracturing, offshore drilling and coal mining have all moved about 10 points higher since 2020.

Republicans remain more likely to favor expanding nuclear power plants than Democrats (67% vs. 50%). Support for nuclear power has increased in both party coalitions in recent years. Men also continue to be far more likely than women to favor expanding nuclear power plants (71% vs. 44%).

A majority of Republicans who have heard of the Willow oil drilling project favor the Biden administration decision, while Democrats aware of the project oppose it

In March, the Biden administration approved the Willow oil drilling project on lands located in the federally owned National Petroleum Reserve in Alaska.

While the approval drew wide criticism from climate activists , the Center survey finds limited familiarity with the project. Just 3% of Americans say they have heard or read a lot about it and 29% say they have heard or read a little. About seven-in-ten (68%) say they have heard or read nothing at all about the Biden administration approving the Willow project.

Among those with at least a little awareness of this, 44% say they favor the Biden administration approving the drilling project, while 41% oppose it. The remaining 14% say they are not sure of their view on this.

In contrast to public views of Biden’s job approval and handling of other issues , a majority of Republicans (72%) with some awareness of the Willow project say they favor the decision. 

A majority of Democrats familiar with the project oppose the Biden administration’s decision (61%).

These patterns are broadly in keeping with partisan views on energy priorities for the country and support for more offshore oil and gas drilling.

Differences among Republicans by ideology, age over views about fossil fuels and prioritizing renewable energy sources

Views among Republicans about these issues are far from uniform. Conservative Republicans are far more likely than moderate or liberal Republicans to support expanding fossil fuel energy sources.

For example, 71% of conservative Republicans favor prioritizing the production of fossil fuels over the development of alternative energy sources. Moderate and liberal Republicans tilt the other direction, with 36% saying they would prioritize fossil fuels and a majority (63%) saying they would prioritize development of alternative energy sources.

Similarly, a 73% majority of conservative Republicans favor more coal mining while 54% of moderate and liberal Republicans oppose this.

Age differences among Republicans are also common in views about energy issues, with older Republicans more likely than younger Republicans to support the continued use of fossil fuels. These differences hold even when controlling for ideology.

For example, 31% of Republicans ages 18 to 29 say the country should never stop using fossil fuels. In comparison, a majority of older Republicans (including 68% of Republicans ages 65 and older) say this.

Republicans under 30 are far less convinced that unexpected problems are ahead in a future energy transition that greatly reduces energy production from fossil fuel sources and increases production from renewable sources: 32% say unexpected problems are very likely, compared with 69% of Republicans ages 65 and older.

Past Center surveys have also found large differences between older and younger Republicans in views on energy issues and climate policy.

A majority of Americans remain opposed to phasing out gasoline cars and trucks by 2035. In the new survey, 40% of Americans favor this idea while 59% oppose it. The share of Americans who support phasing out gasoline cars and trucks is down 7 percentage points since 2021. Over this period of time, support for phasing out gasoline cars and trucks has ticked down among both Democrats and Republicans. Refer to the Appendix for this data.

When asked about their general reaction to the idea of phasing out the production of gas-powered vehicles, just 21% of Americans say they would be excited by the prospect. More than twice as many (45%) say they would be upset; 33% say their feelings would be neutral.

The U.S. transportation sector is the largest contributor to carbon emissions, and a majority of those emissions come from gasoline-powered passenger cars and trucks. In April, the Biden administration proposed new emission limits for automakers that would dramatically reduce the number of gasoline-powered cars and trucks automakers could sell. Several states are planning to ban the sale of gasoline cars and trucks after 2035.

Republicans oppose phasing out gasoline cars and trucks by 2035 by a large margin (84% to 16%). But views among Democrats are largely supportive: 64% favor phasing out gasoline cars and trucks, while 35% oppose this idea.

Liberal Democrats are especially supportive of phasing out gasoline cars and trucks (76% favor), while moderate and conservative Democrats are more closely divided (53% favor, 46% oppose).

Across both parties, younger Americans are more supportive of this shift. Among all adults under age 30, a 56% majority favor phasing out gasoline cars and trucks by 2035, while 43% oppose this. By contrast, majorities of adults ages 30 and older oppose phasing out gasoline cars and trucks. For instance, among those ages 65 and older, 69% oppose this idea.

There are also wide differences in emotional reactions to the idea of phasing out the production of combustion-engine vehicles.

About three-quarters of Republicans (73%) say they would feel upset if gas cars were phased out. Among Democrats, a larger share say they would feel excited (37%) than upset (20%), while 43% of this group says they would feel neutral about the change.

While the Biden administration has attempted to develop electric vehicle (EV) infrastructure, Americans have limited confidence that the country will build a network of charging stations to support these vehicles.

Just 17% of Americans say they are extremely or very confident that the U.S. will build the necessary charging stations and infrastructure while 30% are somewhat confident; 53% say they are not too or not at all confident.

Legislation passed during the Biden administration set aside $5 billion to build a network of charging stations. Many EV drivers find the current public charging system difficult . Republicans are particularly skeptical that the U.S. will build the charging stations and infrastructure needed to support EVs: 74% have not too much or no confidence this will happen.

38% of Americans would consider an electric vehicle for their next purchase; half say they would be unlikely to do this

Americans are cool to the idea of making an electric vehicle purchase in the near term. Half of U.S. adults say they are not too or not at all likely to seriously consider an EV the next time they purchase a car or truck.

By comparison, 38% of Americans say they are very (15%) or somewhat (23%) likely to seriously consider an EV for their next vehicle purchase.

The public’s modest enthusiasm for purchasing an EV themselves is in line with their opposition to phasing out gas-powered vehicles. Interest in purchasing an EV is down 4 percentage points from when it was last measured in a 2022 Center survey .

Those most inclined to consider purchasing an electric vehicle in the future include the relatively small share of Americans (9%) who already own a hybrid or electric vehicle; 68% of this group says they are at least somewhat likely to seriously consider this, including four-in-ten who say they are very likely to do so.

Other groups who are more open to purchasing an EV in the future include Democrats (56% say they are at least somewhat likely to give this serious consideration), people who live in urban areas (48%), and young adults ages 18 to 29 (48%).

On the other hand, a majority of Republicans (70%), those who live in rural areas (65%) and adults ages 65 and older (59%) say they are not too or not at all likely to seriously consider an electric vehicle for their next purchase.

Americans who are at least somewhat likely to purchase an EV in the future say that both environmental benefits and cost savings are an attraction. About seven-in-ten of this group say that helping the environment (72%) and saving money on gas (70%) are major reasons to purchase an electric vehicle.

A much smaller share of those at least somewhat likely to consider purchasing an EV say that “keeping up with the latest trends in vehicles” is a consideration.

There’s modest interest among homeowners in steps that would improve the energy efficiency of their homes by doing things like converting gas stoves and water heaters to electric. Some steps garner more appeal than others, however, and many have considered upgrading (or have already upgraded) their home’s insulation.

Three-in-ten homeowners say they have improved their home’s insulation in the past and another 26% say they have seriously considered doing so in the past year. A third of homeowners say they have not seriously considered a home insulation upgrade and 10% say this does not apply to their situation.

About three-in-ten homeowners (28%) say they have seriously considered installing solar panels on their home in the past year; 7% of homeowners say they already have home solar panels.

Homeowners living in the West are more likely to say they have solar panels. Democratic homeowners across all regions are more likely than their Republican counterparts to say they have seriously considered installing solar panels within the past year. These patterns are in keeping with a 2022 Center survey . (Note that the response options in the new survey include an option to specify that installing solar panels “does not apply to me,” thus the percentages are not directly comparable across the two surveys.)

Relatively small shares of homeowners say they have seriously considered replacing their gas oven or stove with an electric or induction system (7%), installing an electric heat pump system to heat and cool their home (11%), or replacing their gas water heater with an electric system (11%).

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The U.S. Department of Energy’s (DOE) Wind Energy Technologies Office (WETO) and Water Power Technologies Office (WPTO) and the Department of the Interior’s (DOI) Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE) announced that they intend to collaborate and jointly fund research to further support durable and environmentally responsible U.S. offshore wind energy and marine energy deployments.

DOE and DOI are collaborating on offshore wind and marine energy research.

The goals of this upcoming funding opportunity announcement (FOA) are to improve the reliability of mooring lines, which are used to attach floating offshore wind and marine energy systems to the seafloor and to reduce noise associated with installing fixed-bottom offshore wind energy foundations. This funding opportunity will target technologies with applicability to offshore wind and marine energy deployments in all regions of U.S. waters including the Atlantic Ocean, Pacific Ocean, Great Lakes, and the Gulf of Mexico.

This funding opportunity is expected to be divided into two topics. The first topic—led by WETO, WPTO, and BSEE, and in consultation with BOEM—seeks to improve the reliability of mooring lines. Three subtopics are anticipated that cover the testing of mooring ropes for fatigue, the development of robust sensor systems to monitor the condition of moorings, and the validation of array configurations with shared anchors or shared mooring lines that connect multiple wind turbines or marine energy converters.

The second topic—led by WETO and BOEM, and in coordination with BSEE and the National Oceanic and Atmospheric Administration—seeks to reduce the noise associated with installing fixed-bottom offshore wind turbines to further minimize effects to aquatic wildlife and expand offshore wind deployment potential. It is expected that this topic will also contain three subtopics, covering the assessment of quieter installation types or methods; the demonstration of effective noise abatement technologies; and the gathering and dissemination of information on noise reduction during offshore wind installation.

BSEE plans to make the National Oil Spill Response and Renewable Energy Test Facility (Ohmsett) available to interested awardees for testing activities under both Topic Areas.

This funding opportunity is expected to be released in or about October 2023.