Fossil fuels to supply 40-60% of energy by 2050 despite clean energy push: McKinsey

A McKinsey report reveals that fossil fuels will continue to provide 40-60% of global energy by 2050, due to slower adoption of electric vehicles (EVs) and challenges in scaling clean energy technologies. Gas will remain a key energy source, stabilizing grids as renewables, though growing, are intermittent.

Despite fossil fuel consumption plateauing between 2025 and 2035, investments will persist to ensure energy reliability during the transition. Global energy demand is set to rise by up to 18% by 2050, driven by emerging economies, particularly in the ASEAN region, India, and the Middle East. Population growth, rising GDP, and industrial relocation to these regions will fuel this demand, though per capita energy use in emerging markets is expected to remain below mature economies due to energy efficiency measures.

Low-carbon energy sources, like solar and wind, are projected to account for 65-80% of global power by 2050. However, high costs and slow policy support are hindering the expansion of technologies such as hydrogen and carbon capture, while nuclear growth is constrained by regulatory and public concerns.

The report highlights the need for a significant increase in carbon prices—from the current level to USD 150-225 per ton of CO2—to drive adoption of carbon capture and storage (CCUS) and accelerate decarbonization.

Renewables are expected to grow from 32% to as much as 80% of the energy mix by 2050, but due to their variability, they will require gas or other firming capacity to maintain grid reliability. Massive infrastructure investments in transmission and distribution will be essential to support this renewable energy expansion. Governments may need to intervene to ensure sufficient firming capacity and grid stability.