In 2015 the Paris Agreement fired the energy transition starting pistol. Today, as we near the decade marker, it’s time to pick up the pace. The world is running out of time to achieve net zero. No large countries are on track to meet 2030 goals. 2050 targets remain in reach – if we dig deep and act immediately.

Net zero by 2050 calls for a total US$78 trillion investment across upstream, power supply, grid infrastructure, critical minerals and emerging technologies – up from US$75 trillion in last year’s report. Failure to act quickly and decisively risks putting even a 2 ˚C goal out of reach.

Wood Mackenzie’s energy transition outlook report (part of our Energy Transition Service) maps four different routes through the energy transition with increasing levels of ambition – and investment.

Three major issues currently stand out:

• Energy security: the war in Ukraine and tensions in the Middle East underscore the fragility of today’s energy system, which is dominated by oil and gas.
• Geopolitics: the tariffs and trade barriers on Chinese imports point to the growing discomfort in the West. China is the lowest-cost producer and dominates the supply chains in cleantech. The rest of the world will need to rely on Chinese manufacturing or be prepared to either pay a higher cost or delay the transition.
• Costs: with the mounting annual investment of US$3.5 trillion required to build a low-carbon energy supply and infrastructure, governments and companies’ resolve to push hard and fast on the transition has weakened. Permitting delays are adding to costs and hindering project development.

Our energy transition outlook executive summary includes more detail on these themes, plus a selection of charts on fossil fuels demand outlook, power demand, critical minerals demand, solar and wind trajectories and more. 

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