Global Energy Perspective 2023

| Report

This article was updated on November 21, 2023

The Global Energy Perspective 2023 offers a detailed demand outlook for 68 sectors, 78 fuels, and 146 geographies across a 1.5° pathway, as well as four bottom-up energy transition scenarios with outcomes ranging in a warming of 1.6°C to 2.9°C by 2100.

As the world accelerates on the path toward net-zero, achieving a successful energy transition may require a major course correction to overcome bottlenecks and reach the goals aligned with the Paris Agreement.

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For leaders seeking greater granularity on the most significant trends, challenges, and opportunities facing their sectors, we are complementing our macro perspective with a series of deep dives across the energy value chain.

Wide-ranging scenarios point to an unclear path ahead

The McKinsey Global Energy Perspective 2023 explores five scenarios.

Fossil fuel demand is projected to peak soon, but the outlook remains uncertain

Renewables will make up the bulk of the power mix by 2050

Major investments in the energy sector will be needed, but remain stable as a share of GDP

Achieving a successful energy transition would require a major course correction to overcome bottlenecks and reach the goals aligned with the Paris Agreement

The energy transition is well underway, but how it will unfold in the decades ahead is difficult to predict. Decision makers in government and business face a challenging time planning for a future energy mix that remains unclear.

Leaders might be tempted to “wait and see”, but this approach would be a big risk. Even if the exact trajectory of the energy transition is unknown, the changes ahead will be immense—and faster than many expect. A look at the past two years underscores this: despite massive and unprecedented uncertainties, the growth in several low-carbon technologies has continued and even accelerated.

Organizations can work now to shape transition strategies that account for uncertainty and are robust under a range of future scenarios. Those strategies, aggregated across countries and sectors, will determine how the global energy landscape takes shape in the years ahead. They will also be crucial in driving progress on sustainability while safeguarding energy security, affordability, and industrial competitiveness.

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