Edited and Updated by Ethan Ma
Oct 17, 2025
In Brief:
·IEA lowers 2030 renewable forecast but highlights China’s leading contribution.
·McKinsey expects fossil fuels to dominate energy mix beyond 2050.
·Global transition accelerates yet remains insufficient to end fossil dependence.
Recently, both the International Energy Agency (IEA) and McKinsey & Company released their latest global energy outlooks, offering differing yet complementary perspectives: while the global energy transition continues to advance, its pace and stability face increasing headwinds.
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In its Renewables 2025 report, the IEA revised down its forecast for global renewable energy capacity by 2030, now expecting about 4,600 GW of new installations — 900 GW lower than previously projected.
The downgrade mainly reflects slower economic growth in major economies and reduced policy incentives. In the United States, the early expiration of federal tax credits and growing regulatory complexity have slowed renewable energy expansion by roughly 50%. In China, the shift from fixed feed-in tariffs to competitive auctions has squeezed project profitability and dampened investor enthusiasm. Even so, China is still expected to account for nearly 60% of global renewable capacity growth and is on track to reach its 2035 target five years ahead of schedule.
The IEA also highlights India’s growing role as the world’s second-largest renewable market after China. Solar power is projected to contribute nearly 80% of total global growth. However, rising costs, supply chain bottlenecks, and the heavy concentration of critical minerals production — over 90% of which occursin China — continue to pose strategic risks to global energy security.
McKinsey, in contrast, adopts a more cautious outlook in its Global Energy Perspective 2025. The consultancy projects that oil, gas, and coal will remain dominant after 2050, even as renewables rapidly expand.
By 2050, renewables are expected to supply 61–67% of global electricity generation, but fossil fuels will still account for 41–55% of total energy consumption — higher than previous decarbonization scenarios. McKinsey attributes this persistence to surging electricity demand driven by AI development and data center expansion, noting that industrial and building sector electricity use could grow by 20–40% by 2050.
In North America, power demand from data centers alone is projected to rise 25% annually through 2030. Meanwhile, slow grid expansion and inadequate energy storage capacity remain key bottlenecks for renewable integration. The report also emphasizes the uneven pace of energy transition worldwide: developed economies are advancing decarbonization faster, while emerging economies in Asia and Africa continue to rely on affordable fossil fuels to sustain growth.
Overall, both the IEA and McKinsey reports converge on one conclusion — the global energy transition is accelerating but not fast enough to eliminate fossil fuel dependence by mid-century.
Over the coming decades, the world’s energy system will remain in structural flux: renewable deployment and technological innovation will continue to expand, yet economic growth, energy security, and supply-demand balance will impose lasting constraints. Striking a new equilibrium between green transition and energy reliability will thus become the defining challenge for global energy governance.
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