The shift to renewable energy will create major value pools. How big will they be?

Three decades, three key shifts ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

TODAY'S NEWS. TOMORROW'S INSIGHTS. A daily newsletter from McKinsey & Company   Edited by Alexandra Mondalek   Associate Editor, New York Powering up with green energy In the news • Mine the gap. To get ahead of expected energy supply constraints, Europe is looking to increase its domestic supply of critical raw materials by making it easier to mine and produce them. Lithium, graphite, and other rare materials are used in electric cars, wind farms, and solar panels, and European demand for green-energy sources is intensifying. By 2050, demand for lithium could be nearly 60 times higher than what it is now. But where, when, and how to mine for those materials is where policy makers, environmentalists, and energy suppliers have competing views. [FT] • Let's make a deal. As much of the world ramps up its use of renewable energy, energy producers are snapping up renewable-energy companies at a record pace. The value of deals focused on green-energy firms reached a record $112.4 billion in 2021, shattering a previous high of $66.5 billion in 2017, according to Bloomberg data. Even after the deluge of dealmaking that came in 2021, analysts expect 2022 to be another busy year for buyers in the energy sector, including fossil-fuel giants who are making moves toward green energy. [Bloomberg] In 2050, 95% of electricity generation will come from fossil-free sources. On McKinsey.com • Powering value. The global effort to shift to green power sources will have far-reaching effects. For example, the historic reallocation of capital to renewable energy could create $1.5 trillion in value in low-emissions stocks by 2030, find McKinsey partners Rory Clune, Viktor Hanzlík, and Raffael Winter. But that may also lead to greater stranding of existing emissions-intensive assets, such as infrastructure that is no longer needed. That, in turn, could erode the value of enterprises, if not addressed. • The green-energy grid. To realize this new, greener future, organizations will need to build the right infrastructure, including delivering a reliable electric grid that can handle a substantial increase in the use of electric power. Utility companies must increase investment in modernizing the energy grid, including the use of advanced metering infrastructure and distributed energy resource management systems, in preparation for a dramatic increase in use. See three key economic shifts in the power sector's transition to renewable energy. Get to net zero in power Was this forwarded to you? Sign up here. Or send us feedback—we'd love to hear from you. Follow our thinking This email contains information about McKinsey's research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. You received this email because you subscribed to the On Point newsletter. Manage subscriptions | Unsubscribe Copyright © 2022 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007