The gap is growing between the number of announced and funded low-carbon energy projects, according to a new report from McKinsey & Co.
The consulting firm found that many U.S. renewable energy projects have not yet reached a final investment decision, which is usually the last stage before a company decides whether to start construction. The gap is widest for newer technologies like carbon capture and hydrogen production facilities.
Of the more than 1,000 “green” or “blue” hydrogen production projects that have been announced since 2015, for example, fewer than 15 percent have reached final investment decisions, according to McKinsey’s new research. Green hydrogen typically uses zero-carbon electricity like wind or solar, while blue hydrogen is made using natural gas paired with carbon capture.
“I think the overwhelming message should be there is still hope, but what we should not be is lulled into complacency,” said Diego Hernandez Diaz, a partner with McKinsey and leader of their global energy perspective.
