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Turning the

tide in scaling

renewables

Addressing the barriers and opportunities

to accelerate the global energy transition

KPMG International

kpmg.com/scalingrenewables

Contents

Barrier

Market structures 13

Barrier

Supply chain issues 38

Barrier

Access to capital 18

Barrier

Critical raw materials 43

Barrier Investment in grid

infrastructure 22

Barrier

Nature and biodiversity 51

Barrier Planning and

permitting 28

Barrier Social license to operate 56

Barrier Accelerating storage

solutions 32

Barrier

Emerging markets 62

Introduction 05

Conclusion 68

Methodology 70

How we can help 71

About the lead authors

Anish De

Global Head of Energy, Natural Resources &

Chemicals

KPMG International

Mike Hayes

Climate Change and Decarbonization

Leader, Global Head of Renewable Energy,

KPMG International

Mike has been involved in the KPMG climate change and decarbonization work

for over two decades. In his role as partner and Global Head of Renewable

Energy, he oversees KPMG ﬁrms’ business on renewables strategy, renewables

M&A and corporate PPAs. In his role as the global head of climate change and

decarbonization, Mike is a trusted advisor for corporate clients on setting and

achieving ambitious net-zero goals and helping clients address climate challenges,

risks and opportunities. He is also actively involved in the climate ﬁnance agenda.

Mike is passionate about taking action to solve the climate crisis, particularly by

accelerating the pace of innovation, scaling renewable energy deployment, and

attracting increased capital to projects in developing markets.

His recently published work on behalf of KPMG focuses on sourcing renewable

energy through PPAs to speed companies’ decarbonization plans and the

importance of prioritizing a just and equitable energy transition.

Anish is an acclaimed energy sector expert and advisor with more than

25 years of experience in energy reform, capital markets, and policy and

regulation. Anish’s work focuses on the energy transition, climate change,

and renewables, particularly as they relate to sector reform and restructuring,

designing policy and regulatory frameworks, and smart grid and digital

solutions.

In his role as Global Head of Energy, Natural Resources and Chemicals, he is

responsible for KPMG sector strategy, growth and market-leading solutions

on energy and decarbonization on a global scale. He collaborates closely with

organizations, multilateral development banks, and international energy agencies

on energy and climate priorities.

His recently published work on behalf of KPMG focuses on the energy industry’s

role in the ﬁght against climate change and the need for growth and innovation

that is sustainable. He is a member of the KPMG Global Climate Change &

Decarbonization Center.

3 | Turning the tide in scaling renewables

Barrier

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TurningthetideinscalingrenewablesAddressingthebarriersandopportunitiestoacceleratetheglobalenergytransitionKPMGInternationalkpmg.com/scalingrenewablesContentsIntroduction05Barrier07Criticalrawmaterials43BarrierBarrier01Marketstructures1308Natureandbiodiversity51BarrierBarrierSociallicensetooperate5602Accesstocapital180903BarrierInvestmentingridBarrierinfrastructure2210Emergingmarkets6204BarrierPlanningandConclusion68permitting2805BarrierAcceleratingstorageMethodology70solutions32BarrierHowwecanhelp7106Supplychainissues38AbouttheleadauthorsBarrierAnishDeMikeHayes01GlobalHeadofEnergy,NaturalResources&ClimateChangeandDecarbonizationBarrierChemicalsLeader,GlobalHeadofRenewableEnergy,KPMGInternationalKPMGInternational02AnishisanacclaimedenergysectorexpertandadvisorwithmorethanMikehasbeeninvolvedintheKPMGclimatechangeanddecarbonizationworkBarrier25yearsofexperienceinenergyreform,capitalmarkets,andpolicyandforovertwodecades.InhisroleaspartnerandGlobalHeadofRenewableregulation.Anish’sworkfocusesontheenergytransition,climatechange,Energy,heoverseesKPMGfirms’businessonrenewablesstrategy,renewables03andrenewables,particularlyastheyrelatetosectorreformandrestructuring,M&AandcorporatePPAs.Inhisroleastheglobalheadofclimatechangeanddesigningpolicyandregulatoryframeworks,andsmartgridanddigitaldecarbonization,MikeisatrustedadvisorforcorporateclientsonsettingandBarriersolutions.achievingambitiousnet-zerogoalsandhelpingclientsaddressclimatechallenges,risksandopportunities.Heisalsoactivelyinvolvedintheclimatefinanceagenda.04InhisroleasGlobalHeadofEnergy,NaturalResourcesandChemicals,heisresponsibleforKPMGsectorstrategy,growthandmarket-leadingsolutionsMikeispassionateabouttakingactiontosolvetheclimatecrisis,particularlybyBarrieronenergyanddecarbonizationonaglobalscale.Hecollaboratescloselywithacceleratingthepaceofinnovation,scalingrenewableenergydeployment,andorganizations,multilateraldevelopmentbanks,andinternationalenergyagenciesattractingincreasedcapitaltoprojectsindevelopingmarkets.05onenergyandclimatepriorities.HisrecentlypublishedworkonbehalfofKPMGfocusesonsourcingrenewableBarrierHisrecentlypublishedworkonbehalfofKPMGfocusesontheenergyindustry’senergythroughPPAstospeedcompanies’decarbonizationplansandtheroleinthefightagainstclimatechangeandtheneedforgrowthandinnovationimportanceofprioritizingajustandequitableenergytransition.06thatissustainable.HeisamemberoftheKPMGGlobalClimateChange&DecarbonizationCenter.Barrier07Barrier08Barrier09Barrier103Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.FranceliJodasSimonVirleyCBFEIBarrierGlobalLeader,Power&UtilitiesViceChairandUKHeadofEnergy,01KPMGInternationalKPMGintheUKBarrierFranceliJodasisaseasonedenergyprofessionalwhoispassionateaboutSimonVirleyCBFEIisViceChairandHeadofEnergyandNaturalResourcesenergytransition.fortheKPMGUKfirm.Hehasbeenadvisingonenergyandclimateissuesfor02AstheGlobalHeadofPowerandUtilities,sheisresponsibleforcoordinatingover30years.theP&UCommunitiestowardunderstandingtheglobalchallengesandtrends,HeledtheworkonscalingrenewablesintheUKasDirectorGeneralforBarrierpromotingtheexchangeofbestpracticesamongcountriesanddevelopingEnergyintheUKGovernmentbetween2008-15,whichhasresultedintheglobalsolutionsaccordingtomarketdemand.shareofelectricitycomingfromrenewablesintheGBmarketrisingfrom03AtKPMGinBrazil,sheworksdirectlyonprojectsfocusedonthePowerand5percentin2007toover40percenttoday.SincejoiningKPMG,hehasUtilitiesIndustry,suchascorporategovernanceimplementation,majorprojectadvisedleadingrenewableandenergycompaniesontheEnergyTransition.TheBarrieradvisoryforwindagents,strategyinnovation,anddevelopmentofsolutionsQueenawardedhimaCBin2014forhisworkonenergyandclimatechangefocusedonimprovingperformance.Sheisalsoresponsiblefortheinstitutionalissues.HeisaFellowoftheEnergyInstitute(FEI)andontheMarketsAdvisory04relationshipwithenergy-sectorregulatorsandassociations.CounciloftheElectricitySystemOperator(ESO).BeingoneoftheleadersoftheKPMGInclusionandDiversityCommitteeinBarrierBrazil,FranceliisrecognizedasanimportantmarketvoiceinthedebateonI&D.05Barrier06Barrier07Barrier08Barrier09Barrier104Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.IntroductionBarrierAchievingtheambitionoftheParisAgreementdepends01ondramaticallyandrapidlyscalingthedeploymentofrenewableenergy.InareportaboutcrediblepathwaysBarriertoachievingthisgoalreleasedin2023,theInternationalEnergyAgency(IEA)concludedthatrenewableenergy02capacityadditionsmusttriplefrom2022levelsby2030.1Inshort,thatmeansinstallingover1,200gigawattsannuallyBarrierbytheendofthedecade.Toputthatnumberincontext,considerthatthetotalelectricitygenerationcapacityinthe03UnitedStates(US)fromallfueltypesattheendof2022was1,200gigawatts.2ThefocusonenhancingrenewableBarriercapacityispivotal,notonlyformeetingclimatetargetsbutalsoforcomplementingtheexistingenergymix,where04traditionalenergysourcescontinuetoplayasignificantroleinensuringstabilityandreliabilityinenergysupply.Barrier1InternationalEnergyAgency(IEA),“Crediblepathwaysto1.5C:Fourpillarsfor05actioninthe2020s,”2023Barrier2USEnergyInformationAdministration(EIA),“Electricityexplained:Electricitygeneration,capacity,andsalesintheUnitedStates,”2023065TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.07Barrier08Barrier09Barrier10It’sadauntingtask.It’sevenmoredauntingtoThebluntrealityisthattherenewableenergyindustryBarrierconsiderthatasimilarlyrobustpaceofrenewableanditsmanysupportersarefarfromreachingthescaledeploymentwouldneedtocontinuethrough2050.necessarytoachievethisgoal.01TheInternationalRenewableEnergyAgency(IRENA)forecaststhattoreachnet-zeroemissionsby2050,Whyisrenewableenergysodifficulttoscale?Barrierannualenergy-relatedcarbondioxideemissionsneedtoplummetby37gigatonsannuallycomparedto2022GlobalcommitmentsBarriersHowcan205002levels.3Forcontext,in2022,globalemissionsfromandamyriadofpledges…to2050webridgetransportation,includingaviationandallpassengerandthegap?TargetBarriercargocars,trucks,andboats,totaledeightgigatons.4ParisAgreement03TheprimaryvehicleforachievingambitiousclimateSustainableDevelopmentGoalsgoalsiselevatingtheshareofrenewablesintheglobalBarrierenergymixfromitscurrentlevelof14percenttoNetZero205077percentbymid-century.504NationalRenewableHowwellpositionedistheglobalrenewableenergyEnergyTargetsBarrierindustrytodeliveronthespeedandscaleofgrowthRegionalneededtopower77percentoftheworldby2050?Agreements05ThebluntrealityisthattherenewableenergyindustryanditsmanysupportersarefarfromreachingthescaleBarriernecessarytoachievethisgoal.06ThissoberingtruthisoftenoverlookedbecausethereisawarrantedcelebrationoftheremarkableprogressBarrierrenewableslikewindandsolarandsupportingtechnologieslikeenergystoragehavemadeover07thepastdecade.Renewableshaveimprovedtheirperformance,scaledupproductionand,mostBarriercritically,slashedtheircostsbeyondwhatmanybelievedwaspossible.083InternationalRenewableEnergyAgency(IRENA),“WorldEnergyTransitionsOutlook2023:1.5CPathway,”2023Barrier4InternationalEnergyAgency(IEA),“TrackingCleanEnergyProgress2023,”20235InternationalRenewableEnergyAgency(IEA),“WorldEnergyTransitionsOutlook2023:1.5CPathway,”2023096TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.10SuccessandfailureUSprimaryenergysharesbyfuelEUprimaryenergysharesbyfuelThesuccessesoftherenewableenergyindustry100%100%Barrierarereal.Andwiththehelpofsupportivepolicies,renewablesroutinelynotchuprecordannualgrowth.690%90%01Butit’salsotruethatrenewablescansimultaneouslysucceedbeyondanyone’simaginationwhilestillfailing80%80%Barrierdramaticallytodeliveronthepromiseofasustainablefuture.Indeed,whilegrowingrapidly,renewablesstill70%70%02accountforatinysliveroftheoverallglobalenergymix,withsignificantdisparitiesacrossmarkets.60%60%BarrierExaminingthecurrentpaceofrenewabledeployment50%50%03revealssignificantopportunitiesforgrowth.AccordingtoIRENA,theworldaddedarecord295gigawatts40%40%Barrierofrenewablecapacityin2022,anincreaseofnearly10percentover2021.7Inthesummerof2023,the30%30%04IEAforecastthatglobalrenewablecapacityadditionswouldreach440gigawattsfortheyearandcould20%20%Barrierincreaseto550gigawattsin2024.810%10%05Thisisimpressivegrowth,yettheshortfallcouldbemoremanageable.IEA’sbullishprojectionsfor20240%0%Barrierarestill650gigawattsshortofwhatneedstobeaddedeachyearby2030tolimitwarmingassetoutin201220132014201520162017201820192020202120222012201320142015201620172018201920202021202206theParisAgreement.Acknowledginghowmuchmorewind,solar,andenergystoragemustbebuiltquicklyHydroelectricRenewablesNuclearHydroelectricRenewablesNuclearBarriershouldbeenoughtosparkasenseofurgencyacrossGasOilCoalGasOilCoalallrenewableenergystakeholders.Aligningurgency07withstrategicmeasurescanhelpsustainthegrowthofChinaprimaryenergysharesbyfuelIndiaprimaryenergysharesbyfuelrenewabledeployments.Barrier100%100%0890%90%Barrier80%80%0970%70%Barrier60%60%1050%50%40%40%30%30%20%20%10%10%0%0%2012201320142015201620172018201920202021202220122013201420152016201720182019202020212022HydroelectricRenewablesNuclearHydroelectricRenewablesNuclearGasOilCoalGasOilCoal6InternationalRenewableEnergyAgency(IRENA),“RecordGrowthinRenewablesAchievedDespiteEnergyCrisis,”20237InternationalRenewableEnergyAgency(IRENA),“RecordGrowthinRenewablesAchievedDespiteEnergyCrisis,”20238InternationalEnergyAgency(IEA),“RenewableEnergyMarketUpdate:Outlookfor2023and2024,”20237Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.ThebarriersthatwilllikelydefineThisreportaimstohighlightthechallengestoOverBarriertherenewableeradeployingrenewablesatthepacenecessarytoachieveglobaltargetsbyraisingawarenessabout80%01Thestartingpointforeffectiveactionisaccuratelythesechallengesandproposingrecommendationsdiagnosingtheprimarychallengespreventingaforovercomingthem.Aspartofthereport’sagreedorstronglyagreedthatBarrierdramaticrenewableenergyscale-up.Someofthesedevelopment,KPMGsurveyedorganizationstosignificantlyacceleratingrenewablebarrierstoscalearewell-known,likeinadequategridconfirmtheneedtodiagnosebarrierstorenewablesdeploymentsisthemostpressingissue02infrastructure,insufficientenergystorageandgridandhelpidentifythemostsignificantchallengestorequiringattentiontomeettheParisflexibility,anddelayscausedbyinefficientpermittingscalingrenewables.Agreement’stargets.Atthesametime,Barrierandplanningprocesses.Inputwasreceivedfromover100surveyrespondents,84%03Otherchallengesneedtobebetterunderstood,whichincludingrenewabledevelopers,investors,utilities,meansthateffectivestrategiesandresourcestoandotherstakeholdersfromacrosstheglobe.OverreportedthatcurrentmarketchallengesBarrierovercomethemarelacking.Theseincludeobstacles80percentagreedorstronglyagreedthatsignificantlyarecausingsubstantialdelaysand,inposedbynatureandbiodiversityconcerns,theacceleratingrenewabledeploymentsisthemostsomecases,eventheabandonmentof04growingemphasisonsociallicensetobuildnewpressingissuerequiringattentiontomeettheParisrenewableenergyprojects.renewableenergydevelopments,andchallengesAgreement’stargets.Atthesametime,84percentBarrieraccessingthefinancingnecessarytofundrenewablereportedthatcurrentmarketchallengesarecausingenergyprojects.substantialdelaysand,insomecases,eventhe05abandonmentofrenewableenergyprojects.AsastartingpointtocatalyzeBarrieraction,KPMGprofessionalsThisreportprovidesinsightsaboutreal-worldrecommendanaccuratechallengesandsolutionsfromKPMGfirms’06diagnosisoftheprimaryclients,services,andrevenuesdirectlyengagedchallengespreventingwithdeveloping,financing,constructing,andBarrierrenewabledeploymentatinterconnectingprojects.Wealsoprovideananalysispaceandatscale.ofglobalpoliciesthatarechangingthegamefor07renewables,bolsteringenergyefficiency,andexpandingend-useelectrification.BarrierTheInflationReductionAct(IRA)intheUSandthe08EuropeanUnion’s(EU)GreenNewDealarenotablepoliciesintheirrespectiveregions.Thesepolicies,Barrierwiththeirimplications,arebeinganalyzedascountriesprogressandrefinetheirNationallyDetermined09Contributions(NDCs)undertheParisAgreement.Byconsideringthefindingsinthisreport,organizationsBarriercanbettertailortheirapproachestowardsrenewablesandemissions.108Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.BarrierMarketstructuresBarrierInvestmentingridBarrierPlanningandpermittinginfrastructure01Theflexibilityneededtosupporta0304Theenergytransitionisarguablytheworld’sBarriersignificantbuildoutofintermittentAgridcapableofprovidingreliablemostambitiousandcomplexdevelopmentrenewablegenerationissupportedbyonlyelectricitywhileintegratingmassiveproject.Theproblemisthatittakesfar01somecurrentmarketstructuresandrules.ManypoweradditionsofintermittentrenewablegenerationwilltoolongtobuildrenewableenergyprojectsandtheBarriermarketsweredesignedtoincentivizeconventionaldifferfromthegridsocietieshavedependedonforsupportinginfrastructuretheydependon.Forexample,02powergeneration,likecoalandnaturalgas,ratherthanoveracentury.Arenewables-dominatedgriddemandsareportbytheNationalAcademiesofSciences,Barrierflexiblelow-carbonresourceslikeenergystoragethatflexibilityandintelligencetocontinuouslybalanceEngineering,andMedicineintheUScalculatedthat03canfillthegapswhenwindandsolargenerationissupplyanddemandandmaximizepowersystemittakesaboutadecadetomovefromidentifyingtheBarrierlow.Marketdesignsinsomeregions,liketheUK,areefficiencyandutilization.Gridinvestmentsthatenableneedfortransmissioninfrastructuretolinestransporting04consideringevolutiontoaccommodatethegrowthofrapidintegrationofrenewablesshouldfacilitatecleanelectrons.8AcceleratingnecessarypermittingBarrierrenewablesbyexploringemissionslimitsincapacitythedemand-sideflexibilityelectricitycustomersandplanningapprovalsrequiresensuringthatofficials05markets.Othermeasures,likemoresignificantusecanprovide.TheyshouldalsoadvanceinnovativeresponsibleformakingdecisionshavesufficientBarrierofdemand-sideresponsemeasures,strongercarbontechnologieslikeartificialintelligence(AI)andmachineknowledgeofrenewablesandtheirimpactsand06pricesignals,andincentivesforlong-durationstorage,learningandseektomaximizethemyriadofexpectedthatdevelopersprovidecommunitybenefitsthatareBarriercanhelpspeedthetransitiontorenewables.benefitsenergystoragecandelivertoadistributedgridtangibleandclear.Designatinggeographicareaswhere07withlargeamountsofrenewables.renewableplanningandpermittingarestreamlinedcanBarrierBarrierAccesstocapitalbeaneffectiveaccelerator.Planningandpermitting08practicesthatleadtorobustdeploymentsofrenewablesBarrier02Fundingtheenergytransitionrequirescanserveasmodelsforrenewabledevelopersand09anenormousamountofcapital.TheInternationalRenewableEnergyAgencyregulatorswhoseektomovefaster.Barrier(IRENA)estimatesthatcumulativeglobalinvestments10requiredtoachievetheParisAgreement’sclimatetargetsareUSD5trillionannuallyover30years.7High-interestratesandsupplychaininflationrecentlyhavemadeattractinginvestmentsinsomerenewableprojectsandcompaniesmoredifficult.Incontrast,otherrenewablecompaniesandprojectshaveampleaccesstocapital.Stepsnecessarytoensureadequatesuppliesofcapitalareavailabletosupportthescalingofrenewablesincludeincreasinglyintegratingrenewableswithfirmpowerandtradedpropositionstoscalingfloatingoffshorewindtodrivedownthelevelizedcostofcapital.9Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.BarrierAcceleratingstorageBarrierAccesstocriticalrawBarrierSociallicensetooperatesolutionsmaterials050709RenewableswillbescaledmorequicklyBarrierTheimportanceofenergystorageScalingrenewablesrequirescost-ifrenewabledevelopersestablishasocialinacceleratingthedeploymentofcompetitiveaccesstoavastvolumeoflicensetooperate.Developersneedto01renewablesisevident.Becausethesundoesn’trawmaterials,likecobalt,nickel,graphite,copper,andsecurelicensestooperateintheformofpermitsBarrieralwaysshineandthewinddoesn’talwaysblow,lithium.TheIEAestimatesthatmineralrequirementsandgovernmentapprovals,buttheywillalsoneed02energystorageisneededtohelpfillthegapsandforcleanenergytechnologieswillneedtoquadrupletolicensethelevelofacceptanceofaprojectamongBarrierkeepreliableelectricityflowing.Toplaythatimportantby2040tomeettheParisAgreement’stargets.9Tocommunities,stakeholders,andthepublic.While03role,energystoragemustachievescale,andstoragemakethispossible,alotwillhavetohappen,includingrenewabledevelopersoftenviewthecommunityBarriertechnologiesmustprovideelectricityandothergridexpandingminingcapacityanddiversifyingwhereengagementnecessarytoestablishasociallicense04servicesforlongerdurations.Justasimportant,criticalrawmaterialsaresourced.Otherstepsshouldasabarrier,renewableswillscalemorerapidlyandBarrierenergystorageneedstobefinanciallyviable.Thisalsobepursued,includingdevelopingsupplychainsequitablywhencommunitiesareengagedearlyas05canbeaccomplishedthroughlong-termcontractsandbusinessmodelsthatpromoteacirculareconomy,projectco-creators.Barrierthatensurepredictablerevenuestreamsthatattractdesigningproductstolastlongerandberecycledand06financing,state-backedcapacitypayments,incomereused,andinnovatingtobuildrenewableproductsBarrierEmergingmarketsBarrierguarantees,gridcodesandancillaryservicerulesthatusingmorereadilyavailablematerials.07incentivizestorage.10Theworld’sabilitytomeetboththeParisBarrierAgreement’sclimatetargetsandindividualBarrierSupplychainissuesBarrierNatureandbiodiversitynet-zerocommitmentsheavilyreliesonthe0808Earth’sgrowingpopulationdependsonrapiddeploymentofrenewablesinemergingmarkets.Barrierhealthyecosystemsandbiodiversity.06TheCOVID-19pandemiclaidbaretheClimatechangeisalreadyacceleratingWithoutsuchaccelerateddeployment,theglobal09challengestoscalingrenewablesthatarisewhensupplychainsaredisrupted.HighercommunitymightfinditselfrelyingonfossilfuelsBarrierhabitatlossandtherateofspeciesextinction.10forlongerthananticipated,giventheimperativesof10pricesandlackofaccesstoequipmentandnecessaryButwhilenatureandbiodiversitydependonaenergysecurityandaffordability.skillshavedelayedorcanceledmanyplannedprojects.stabilizedclimate,and,therefore,arapidexpansionofAccordingtotheGlobalEnergyAllianceforPeopleandPlanet(GEAPP),ifemergingeconomiesremainTherefore,ensuringresilientandreliablesupplychainstechnologiessuchasrenewablestolimittemperaturereliantonfossilfuelsanddevelopedeconomieshittheirnet-zerogoalsby2050,theworldwillbeonisoneofthefoundationsofscalingrenewablesincreases,wealsomustacknowledgethepotentialcoursetowarmby2.5degreesCelsius.11Catalyzinginvestmentsinemergingmarketsiscriticaltoquickly.Solutionstoensurerenewableprojectshavenegativeimpactsofrenewabledevelopmentonacceleratingrenewabledevelopmentandprovidingmillionsofpeoplewithlife-transformingaccesstowhattheyneedtobedevelopedincludegeographicnatureandbiodiversityandtakestepstoalleviateorenergy.Thiscanbeaccomplishedbyfacilitatingprivateinvestmentthroughinnovativefinancingdiversityofsuppliers—criticalmineralsandequipmentavoidthem.Thiscanbeaccomplishedbyproactivelyinstruments,expandingtheroleofmultilateralmanufacturingiscurrentlyconcentratedintoofewenlistingtheguidanceofenvironmentalexpertsincountries—butalsolow-costfinancingtoencouragesitingprojects,leveragingtechnologiesthatmitigateadditionalmanufacturingcapacity,askilledworkforce,impactsonhabitatandspecies,andintegratingnatureandsupplychaintraceabilityandtransparency.andbiodiversityconsiderationsattheearliestpossiblestagesinallrenewabledevelopments.10Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.developmentbanks,andworkingwithlocalpartnerswhichrepresentsafundamentalreorderingofhowThepastfewyears’eventshaveeraseddoubtsaboutBarrierabletomitigateprojectrisks.Emergingmarketscancompanies,governments,regulators,communities,theneedfortherenewableenergyindustrytomaturealsohelpbyestablishingclearrenewabletargetsandindividualsinteract.quickly.Whileit’struethattheenergysectorisrapidly01intheirParisAgreementNationallyDeterminedtransforming,threeimperativeswillremainunchanged.Contributions(NDCs)anddevelopingpoliciesandTheimportanceofcollaborationacrosssectors,AllstakeholderswithintheenergyindustryshouldBarrierregulationsthatsupporttheirgoals.includingindustry,academia,andgovernment,isworktogethertowardsensuringenergysecurity,becomingincreasinglyevident.Suchcollaborationsaffordability,andsustainabilityinthesocietiesthey02Renewabledeveloperswillneedtoactdecisivelytomayinvolveunderstandingpolicies,promotingserve.Evenassustainabilityanddecarbonizationovercomethesebarriers.Inthisreport,weprovidedresearch,andworkingtowardssharedstandards.becomemoreimportant,citizensareunwillingtoBarrierdetailedinsightsoneachofthesepressuresandshareTheenergytransitionisasprawlofinterconnectedsacrificeaffordabilityandsecurity.Untilrenewablepotentialwaysorganizationscantakeaction.Thechallengesandopportunitiesthatlookdifferenttosourcescansatisfymoreenergydemand,existing03importanceofcollaborationiscommonacrossmanydifferentstakeholders.Onlybycollaboratingandfossilfuelenergysourceswillcontinuetoplayamoreoftheserecommendations.Itisanimperativethatpartneringcanrenewablesreachthescaletheworldcriticalroleintheenergymix.Barrierwilldeterminethesuccessoftheenergytransition,needs.Buildingthosepartnershipsshouldstartnow.04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier1011Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.ThiswasapparentintheaftermathofRussia’sinvasionItdoesn’thavetoplayoutthisway.ThereareThebarriersidentifiedinthisreportarenotalwaysBarrierofUkraine,whichledtosomenationsincreasingopportunitiesforrenewablestoofferaffordable,secure,uniformlychallengingtoallrenewabletechnologies.Forconsumptionofcoalandotherfossilfuelstokeepanddecarbonizedenergy,buttheirscaleandmaturityexample,accesstocapitalisanacutebarriertooffshore01thelightson.However,scalinguptomeettheParisfallshorttoday.WehavealreadyseenhowconsistentlywindprojectsandsomewhatlesssoforsolarandClimateAccordambitionswillrequiremuchmorerenewablescandefyeventhemostoptimisticgrowthonshorewind.Advancesinenergystorage,however,areBarriersignificantandconcertedactiononseveralactionexpectations.TheIEArecentlyreiteratedthatapathwaylesssignificanttooffshorewindprojectsthanforsolartheatres,includingsettingappropriatepolicybyvarioustoachievetheambitionsintheParisAgreementandonshorewind.Specificbarriers,likesupplychain02countriesandenablingimplementation,easingbarriersremainsviable,albeitnarrow.9Thepathwayisfeasibleissues,areequallyvexingtosolar,onshoreandoffshoretoprojectdevelopment,creatingenablingtransmissionduetotheongoingrecordgrowthofcleanenergy.wind,andbioenergy.Barrierinfrastructure,aligningsupplychains,scalingupfinanceavailability(includingforhigherrisklocationsAccordingtotheIEA,achievingthetargetsnecessitatesGraspingthescaleofthechallengesandidentifying03andtechnologies)andalsorampinguphumantriplingglobalrenewablecapacityby2030.AtKPMG,solutionstoovercomethemisanimportantstart.resourcecapabilitiesacrosstheever-expandingcleanweunderstandthedynamicnatureoftherenewableManyrespondentsoftheKPMGsurveyholdthisBarrierenergyvaluechain.energyindustry.Thisreportisanembodimentofourview.Whiletheyrecognizethestepsrequiredtodedicationtohelpingorganizationsnavigatetheever-scalerenewablestoaddressglobalclimategoals,04evolvingrenewablemarketlandscape.only36percentareoptimisticthatrenewableenergygenerationwillsurpassthatoffossilfuelsby2050.BarrierBarrierintensityacrossrenewableenergytechnologies05Criticalscalingrequiredby2030PrioritizetechnologydevelopmentandecosystemFutureresources:BarriercreationforthenextwaveoftechnologyConcentratingondrivingBarrier06SolarWindOffshorewindBioenergyinnovationBarrier1:PlanningandpermittingBarrierBarrier2:InvestmentingridinfrastructureGeothermalBarrier3:Criticalminerals07Barrier4:StoragesolutionsBarrier5:SociallicensetooperateBarrierBarrier6:NatureandBiodiversityBarrier7:Supplychainissues08Barrier8:AccesstocapitalBarrier9:EmergingmarketsrisksBarrierBarrier10:Marketstructures09LowMediumHighBarrier109InternationalEnergyAgency(IEA),“NetZeroRoadmap:AGlobalPathwaytoKeepthe1.5°CGoalinReach,”202312Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.BarrierBarrier0101MarketBarrierstructures0213TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.03Barrier04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier10OnthemorningofJune6,2023,thewinddidnotAsthatwindlessearlyJunemorningintheUSmadeMarketsaren’tdesignedtorewardBarrierblowacrossasectionoftheUSstretchingfromNorthclear,oneistherisktogridreliabilityastheinfluxofflexibilityDakotadowntoTexas.Accordingtotheindependentrenewablesaccelerates.Thisismorethanatechnical01systemoperatorwhichrunsthewholesalemarketchallengebecauseoftheintermittentnatureofmostManypowermarketsweredesignedforconventionalintheUSMidwest,the32,000megawattsofwindrenewablesandthefactthatsocietiesincreasinglypowergeneration,basedoncoalorgas,ratherthanBarriercapacityinstalledacrossthatregionproducedjustrelyonelectricitytofueltransportation,heatandintermittentrenewables,likewindandsolar.Asmore110megawattsofelectricity.10coolbuildings,andpowermanufacturing.Thatrisingrenewableshavebeenbuiltaroundtheworld,thejob02dependenceonelectrificationmakesgridoutagesoffillingthegapswhenwindandsolarproducelittleorFortunately,gridoperatorswereabletodispatchlessandlesstolerable,andiftheyincrease,outagesnoelectricityhashistoricallybeenhandledbycoalandBarrierenoughelectricitytomeetthedemandofthisthreatentheenergytransition.naturalgaspowerplants.increasinglywind-dependentregionoftheworld.But03thosewindlesslatespringhoursalsohighlightedaGlobally,windandsolaraccountedWiththeincreasingemphasisonnet-zerotargets,thestructuralchallengethatmustbeaddressedtoscaleforarecord12%roleoffossilfuelsinmaintaininggridreliabilityisaBarrierrenewablesrapidly.Electricitymarketsaroundtheofpowergeneration,withsolartopicofdiscussion,especiallyinthepowersector.Forglobewerenotdesignedwiththeenergytransitioningenerationincreasingexample,fossilfuel-poweredpeakerplantsthatramp04mind.Adaptingthesestructuresmightbenecessaryupquicklytomeetdemandwhenrenewablegenerationtoaccommodatetheincreasingintegrationof25%wanesproduceexpensiveenergyandheavyemissions.Barrierrenewables.AccordingtoareportbytheNGOCleanEnergyGroup,andwindrisingpeakerplantsemitnotonlysubstantialamountsof05Atfirstglance,itmayseemasthoughthegrowthcarbondioxideoverashortperiodofoperatingtime,ofrenewablesismovingalongjustfine.According14%buttheiremissionsalsoincludesulfurdioxide,nitrogenBarriertotheEnergyInstitute’s2023StatisticalReviewofoxides,andfineparticulatematterthatcancontributetoWorldEnergy,whichwasproducedincollaborationcomparedto2021.heartdisease,asthma,andotherillnesses.11IntheUS,06withKPMGandKearney,ourextensiveresearchpeakerplantsalsotendtobelocatedindisadvantagedshowed2022sawrecorddeploymentsofrenewablescommunities,exacerbatingthenegativesocialimpactsBarrierworldwide,includingdouble-digitgrowthinnearlyoftheircontinuedoperationandunderscoringtheeveryregionoftheglobe.Globally,windandsolarimportanceofasociallicense.1207accountedforarecord12percentofpowergeneration,withsolargenerationincreasing25percentandwindThegoalofmarketdesignistobalancethegrowthBarrierrising14percentcomparedto2021.Thisrobustofrenewablesdeploymentwithgridreliability,anditsgrowthbenefitsthemillionsofconsumerswhonoweffectivenesscandifferacrossregions.Seventy-five08haveaccesstocheaperrenewablepower.ButdiggingpercentofrenewableenergystakeholderssurveyedabitdeeperrevealsseveralsignificantchallengestosaidthatmarketstructuresanddesignwereahighlyBarrierthecontinuedrapidscalingofrenewables,manyofsignificantobstacletoscalingrenewables.themrelatedtoinadequatemarketstructures.0910Flatland,“WindNearlyStoppedBlowingThroughMidwestTurbinesinJune,“2023Barrier11CleanEnergyandStrategen,“ThePeakerProblem:AnOverviewofPeakerPowerPlantFactsandImpactsinBoston,Philadelphia,andDetroit,“202212CleanEnergyGroup.“PhaseoutPeakers.”CleanEnergyGroup,CleanEnergyGroup.20211014Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Wecanconsiderincentivizingaddingflexiblecapacitycarbonsupportmechanismsinto‘firmpowerauctions,’businesses,andindustrialcustomerstoreducetheirBarriertodeliverlow-carbonorcarbon-freepowerwhenit’swhichhavedeliveredcheap,reliablelow-carbonpower,consumptionwhenthegridisstrained.Accordingtocloudyandwindlesstohelpensuregridreliabilityanddrawingonthecountry’svastwindandsolarresources.theIEA’sNetZeroScenario,500gigawattsofdemand01scalerenewables.Thisisnotstraightforward,butresponseneedtobeaddedtomarketsby2030.14solutionsdoexist.TheinfluxofintermittentrenewableOneideatodrivethattransitionisintroducingBarriergenerationhasresultedinsuchanoversupplyofcleanemissionslimitstocapacitymarkets.Inearly2023,theFixingthebrokeninterconnectionenergyinEuropeanelectricitymarketsthatpriceshaveUKgovernmentproposedintroducingemissionslimitsprocess02sometimesfallenintonegativeterritory.13Investmentsintothecapacitymarketinthefuture.Anotherideaisinflexiblecapacityarenotattractivewhenpricesaretosettargetsfordeploymentsoflow-carbonflexibleAnotherstepgridandmarketoperatorscantaketoBarrierlowornegative,andloadfactorsarefalling.generationandtosubsidizenewformsoflow-carbonassuregridreliabilityandpropelfargreaterrenewablegeneration,likehydrogen.deploymentsimultaneouslyistoreforminterconnection03Reimagininghowtousemarketprocessestodiversifygenerationsuppliesandspreadforcestorewardlow-carbonAdemand-sideresponsecanalsohelpensurethegridrisk.Lookingatthenumbers,thereseemtobeareasinBarrierflexibilitystaysbalancedwhendemandspikesandrenewablesaretheinterconnectionprocessthatcouldbeimproved.thedominantgenerationresource.Butthiswillrequire04Historically,capacitypayments,strategicreserves,andmorepowerfulmarketsignalstoencouragehouseholds,capacitymarketshaverewardedplantsfueledbycoalBarrierorgas.Atransitiontonetzerowouldrequireinnovativemarketdesignsthatresultinamplelow-carbonflexible05capacity.BarrierSeveralcapacitymarketdesignsaimtobolstertheavailabilityofloworlow-carbonflexiblecapacity.06Thesemarketsusedifferentdesignstoencouragetheconstructionofflexiblegenerators.IntheUK,Barrierforexample,thegridoperator,ESO,runsauctionstoprocuresufficientcapacitytomeetfuturepeakdemand.07InGermany,Sweden,andFinland,generatorsarekeptBarrierinreservetomeetdemandduringemergencies,likeextremeheatorcoldorwidespreadoutages.Greece08andItalyprovidecapacitypaymentstogeneratorstobeavailablewhendemandpeaks.ThepaymentsdependBarrierontheamountofcapacitygeneratorscansupplyatapricedictatedbythesystemoperator.InChile,wehave09seenthefullintegrationofcapacitymarketsandlow-Barrier13PVMagazine,“NewepisodesofnegativeorzeropricesinEuropeanelectricitymarkets,“202314InternationalEnergyAgency(IEA),“TrackingCleanEnergyProgress2023,”20231015Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.IntheUS,theLawrenceBerkeleyNationalLabInitiativesfromaroundtheglobeprovideideasGenerationandstorageprojectBarrierreportedthatinterconnectionbacklogsgrewbyabouthowinterconnectiontimescanbeslashed.developersoftensubmit40percentin2022,totaling1,350gigawattsofForexample,aconnectandmanagephilosophyhasinterconnectionapplications01generationand680gigawattsofstorage.ThishelpedspeedrenewablegridconnectionsintheUKforfarmoreprojectsthantranslatesintoyears-longwaittimesforthenewandGermany.Inthisapproach,interconnectionstudiestheycouldrealisticallyBarriergenerationtoconnecttothegrid.15GridconnectionarelimitedtotheinfrastructureupgradesneededcompletebecausetheywantdelaysarealsocommonplaceinAustralia.16toconnectagenerationassettothegridphysically.toincreasethelikelihoodof02BecausestudiesthatexaminepowerdeliverytakesecuringenoughpreciousThisdelayalsoproducesunhelpfulandunintendedplacelater,renewablescanconnecttothegridinterconnectionagreements.Barrierconsequences.Forexample,generationandstoragefasteriftheyarewillingtoacceptthehigherriskofprojectdevelopersoftensubmitinterconnectiongridcongestionandcurtailment.AfteradoptingtheMarketstructuresneedtobeinformedbythe03applicationsforfarmoreprojectsthantheycouldapproachintheUKin2011,interconnectiontimeslatestcommercialinsightsfromrenewablerealisticallycompletebecausetheywanttoincreasethewerereducedby17percent.17developers.CompaniesneedtoengageBarrierlikelihoodofsecuringenoughpreciousinterconnectionproactivelywithpolicymakers,supportedagreements.ThevolumeofunviablephantomprojectsThiswasnotaquickandsustainablefixforUKbyrobustevidence,tohelpdelivermarket04slowsthelengthyinterconnectionprocessfurther.interconnectionwoes,giventhatgridconnectionsfordesignsthatacceleratethedeploymentrenewablesremainexcessivelylong.18Indeed,theofrenewableswhilestrivingtoensuretheBarrierWithoutsignificantchange,interconnectionqueuesUKisnowmovingtoanewapproachof‘InvestandsecurityofsupplyandminimizingcoststointheUSmayincreasebecauseofthefeverishConnect’toaddresscontinuingdelays.InGermany,consumers.05developmenttriggeredbyIRAincentives.UtilitiesconnectandmanageispartofamorecomprehensiveSimonVirley,CBFEIinchargeofinterconnectionareinanunenviableinterconnectionprocessthathasallowedrenewablesPartnerandUKHeadofEnergyBarrierspot.TheymustbalanceandnavigateasurgeofEVtoconnecttothegridinaslittleasoneortwoyears.19KPMGintheUKinterconnectionrequestsandincreasesincustomer-Germanyalsorequiresrenewabledeveloperstosecure06owneddistributedenergyresource(DER)ownership.planningandsitingapprovalsbeforetheyapplyforDERscanreducedemandandrevenuesatatimewheninterconnectionandmandatesthatrenewablesbeBarriernewinvestmentsareneededtoreinforcethegridforprioritizedintheinterconnectionprocess.20increasingnumbersofEVsandadditionalelectrification.0715LawrenceBerkeleyNationalLaboratory(LBNL),“QueuedUp:CharacteristicsofPowerPlantsSeekingTransmissionInterconnectionBarrierAsoftheEndof2022,”20230816FinancialReview,“Slashgriddelaystogettheenergytransitionbackontrack,”202317OfficeofGasandElectricityMarkets(OFGEM),“Monitoringthe‘ConnectandManage’ElectricityGridAccessRegime,“2013Barrier18TheGuardian,“‘Lackofvision’:UKgreenenergyprojectsinlimboasgridstrugglestokeeppace,”202319BloombergNEF,“Germany’sGridHoldsUpAgainstRenewablesInfluxSoFar,”20230920EnergyPolicy,“TheGridAccessofEnergyCommunities:AComparisonofPowerGridGovernanceinFranceandGermany,“2022Barrier1016Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.OurrecommendationsBarrierThoughtheproblemofslowandbacked-upinterconnectionqueuesisnotablyacuteintheUS,itisanissuethatutilitiesandrenewabledevelopersgrapplewitharoundtheworld.01Buttherearealsopromisingreformsandadvancesworldwidethatcanprovideguidanceandinspirationtoacceleratedeploymentsofrenewables.Recommendationsinclude:Barrier1.Introducingemissionslimitsintocapacitymarkets.02Thiscanhelpdrivethelow-carbonflexibilityofapowersystemwithalargepercentageofrenewableneeds.Ratherthancontinuedrelianceonunabatedgas,Barrierwhichisinconsistentwithanet-zeropowersystem,emissionslimitsencouragegaspluscarboncaptureutilizationandstorage(CCUS)andhydrogenpower03generation.TheUKhasproposedintroducingcarbonemissionslimitsinthecapacitymarket.21Barrier2.Greateruseofdemand-sideresponse.Demand-sideresponsecanpotentiallyreducepeakdemand,loweringconsumercostsandreducinggreenhousegasemissions.PJM,America’slargestgrid04operator,hasimplementedmeasurestoleveragethevalueofdemand-sideresponse.22Barrier3.Utilizefirmpowermarkets.05Thedeploymentofrenewablesplusstorageisencouragedwhenauctionsarerunforfirm,reliable,andlow-carbonpower.ThisapproachisafeatureofChile’selectricitymarkets.23Barrier4.Greaterinterconnection.06TheEUhassetatargetofatleast15percentofitsgenerationfrominterconnection.ThishelpsprovidegreaterresilienceanddiversityofsupplyincasesofBarrierdisruptioninanysinglecountry.24075.Pursuegridaccessandconnectionreform.BarrierAccesstothepowergridremainsasignificantbarriertotherapiddeploymentofrenewables.ReformingregulationstospeedgridaccessisneededandishappeninginplaceslikeGermany.25086.Strongercarbonpricesignals.BarrierStrongercarbonpricesignalswillencouragethedeploymentoflow-carbonflexibilityratherthanunabatedfossilfuels.TheEUandCaliforniahaveembracedthis09approachwiththeiremissionstradingschemes.26Barrier7.Introduceincentivesforlong-durationstorage.TheUKrecentlyproposedaregimetostimulateinvestmentsinlong-durationstorage,includinghydrogenstorage,likethoseusedforinterconnectors.Thiswillbe10essentialtohelpcomplementthegrowthofintermittentrenewables.2721DepartmentforBusiness,Energy&IndustrialStrategy,“CarbonEmissionsLimitsintheCapacityMarketGuidance,“202222PJMDemandSideResponseOperations,“2022DistributedEnergyResources(DER)thatparticipateinPJMMarketsasDemandResponse,”202323EnergyStrategyReviews,“Chile’selectricitymarkets:Fourdecadesonfromtheiroriginaldesign,”202224EuropeanCommission:Energy,ClimateChange,Environment,“Electricityinterconnectiontargets,”2023energy.ec.europa.eu/topics/infrastructure/electricity-interconnection-targets_en,Accessed4Oct.202325Reuters,“Germanregulatoridentifies5,000kmtoaidgreenpowerswitch,“202326EuropeanCommission:ClimateAction,“EUEmissionsTradingSystem(EUETS),”2023,climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets_en,Accessed23Oct.202327DepartmentforEnergySecurity&NetZero,“Hydrogentransportandstorageinfrastructure:mindedtopositions,”202317Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.BarrierBarrier0201AccesstoBarriercapital0218TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.03Barrier04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier10ScalingupthedeploymentofrenewablesrequiresSuchsignificantyear-on-yearrecordinvestmentfiguresInthepast,capital-intensiverenewablesbenefittedBarrieranenormousamountofinvestment.IRENArecentlyarenotasurprise.Therenewableindustryisdrivingfromlow-interestrates,whichkeptthecostofcapitalreleasedareportoutliningapathwaytolimittheriseawiderangeofnewdealvolumesacrosstheenergyrelativelylow.Butoverthepastfewyears,interest01inaverageglobaltemperaturestoachievetheambitiontransitionspace.Afewexamplesinclude:ratehikeshavesignificantlyraisedthecostofcapitaloftheParisAgreement.28IRENAestimatesthattheforrenewableprojects.Forexample,theInternationalBarrierrequiredcumulativeglobalinvestmenttoaccomplish•ProjectsfocusedonflexibleenergygenerationMonetaryFund(IMF)recentlyreportedthatcentralthisgoalisUSD150trillion.Thisequatestoanaveragethatcanensuregridsystemsareadaptedtobankersinadvancedeconomieshaveincreased02ofUSD5trillionannuallyover30years.Thetotalglobalvariabledemandneeds.interestratesbyanaverageof400basispointssincegrossdomesticproduct(GDP)in2022wasjustoverlate2021;inemergingeconomies,theaverageinterestBarrierUSD100trillion.29•Increasinginterestinhydrogenasapowersourceratehikehasbeen650basispoints.31andacrossitssupplychain,fromproductionto03It’simportanttonotethatrenewableinvestmentscandistribution,storage,andotherindustryapplications.Theaggressiveinterestrateincreasesacrosstheworldtakeseveralforms.Themostcommoninclude:havebeentocounteractincreasinginflation.IntheEU,Barrier•Technologydevelopmentisneededtoexploreforexample,theIMFreportsthattheinflationratein•Equityinvestmentsviacapitalmarketsintoalternativerenewablesources.2021was2.9percent.By2022,theinflationrateroseto04renewabledevelopers,knownasstrategic,andover9percentandfellto6.5percentinOctober2023.32directlyintorenewableassets,knownasyieldcos.•WiderservicesandsupplychainslinkedtotheBarrierexpandingrenewableindustry.Thetransitiontorenewable•Privateequitycapitalfrominstitutionsandfundsenergyrequiresanenormous05investingdirectlyintorenewablecompaniesandDespitethatsuccess,thegapbetweenthenecessaryamountofcapital.Upgradingassets.investmentstoadequatelyscalerenewablesandthethegridtointegratemoreBarriermoneydeployedisvast.Atatimewhenwind,solar,renewables,investingin•Bankandinstitutionalinvestmentsintorenewableandothercleanenergydevelopersneedaccesstobuildingstobemoreenergy06assetsusingdebtinstruments.unprecedentedamountsofcapital,therearedauntingefficient,andelectrifyingchallengesthatneedtobeovercometoacceleratethetransportcanonlyhappenBarrier•Majorrenewabledevelopersalsoraisecapitalbypaceandscaleoftheenergytransition.whenamplesuppliesofcapitalissuingbonds.areavailable.07Challengestorenewablefinancing2022wasarecordyearforrenewablesinvestments;BarrierIRENAestimatesthatwind,solar,andothercleanThetransitiontorenewableenergyrequiresanenormousenergyprojectsattractedaboutUSD1.5trillion.amountofcapital.Upgradingthegridtointegratemore08AccordingtotheIEA,2023issettobeanotherrecordrenewables,investinginbuildingstobemoreenergyyearforcleanenergyinvestments,withoverUSDefficient,andelectrifyingtransportcanonlyhappenBarrier1.7trillionexpected.30TheIEAalsoforecaststhatwhenamplesuppliesofcapitalareavailable.investmentsinsolarprojectswillsurpassthoseforoil09productionforthefirsttimein2023.Barrier28InternationalRenewableEnergyAgency(IRENA),“WorldEnergyTransitionsOutlook2023,Volume1,”20231029WorldBank,“WorldDevelopmentIndicatorsdatabase,”2023,databank.worldbank.org/source/world-development-indicators,Accessed3Oct.202330WorldEnergyInvestment2023,InternationalEnergyAgency(IEA),May202331InternationalMonetaryFund(IMF),“Higher-for-LongerInterestRateEnvironmentisSqueezingMoreBorrowers,”202332InternationalMonetaryFund(IMF),“Inflationrate,averageconsumerprices:Annualpercentchange,”2023,imf.org/external/datamapper/PCPIPCH@WEO/OEMDC/ADVEC/WEOWORLDAccessed10Oct.202319Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.HighinflationhasinfluencedthecostdynamicsofAdditionally,thesesamecompanies’averageenterpriseActionsstakeholderscantakeBarrierrenewableenergyprojects.Forexample,steel,thevalue/EBITDAdeclinedfrom13.75XinSeptember2022toprovidetheinvestmentsprimarymaterialusedinutility-scalesolarandonshoreto12.75XinSeptember2023.Thesemyriadfactorsrenewablesneedtoscalequickly:01windprojects,rose160percentintheUSand270helpexplainwhy48percentofrenewableenergypercentinEuropebetweenthebeginningof2020andstakeholderssurveyedsaidaccesstocapitalwasahighly1.IntegratewithfirmpowerandBarrierthehighpointofcommoditypricesin2022.33significantobstacletoscalingrenewables.tradedpropositionstodrivemorevaluefromelectrons02Similarincreasesincopper,polysilicon,aluminum,Stepstoexpandaccesstocapitalandothercommoditiesessentialtorenewables2.FocusonscalingfloatingoffshoreBarrierhavealsorisenandcontributedtocommoditiesandAlthoughrenewablesasanunderlyinginfrastructurewindtransportationcostsaccountingforanestimated30toinvestmentischallenged,alotofcapitalisfocused0335percentofthecapitalcostsofutility-scalewindandontheareasthatspinoutofrenewables,likesupply3.Openmoremarketsforsolarprojects—whichistwiceasmuchas2020.34chains,energyservices,andtechnology-orientedrenewablessuchashydrogen,BarrierCorporatepowerpurchaseagreements(PPA)reflectedenergybusinesses.Itisadifferent,morecapitale-methanolandammoniatheseincreasedcosts.Forexample,evenaftergrowth-orientedinvestmentpropositioninmanyareas.04inflationratesbegantosubsideinearly2023,PPAInmanyways,itismorecapital-lightandseeking4.PlanstrategicallyongridpricesinNorthAmericaincreasedbyover6percentsolutionstothetechnicalandcommercialchallengesconnectionBarriercomparedto2022inthefirstquarterof2023.35ofnetzero.Thisisthespacewhereimpactandenergytransitionfundsarefocusingnow.5.Supportpoliciesandprocedures05Highwholesaleenergypricesin2021and2022tostreamlinepermittingalsobenefittedrenewableprojectsbydrivinghigherWhiletherearechallengesinrenewablesfinancing,Barriervaluationsandreducingoreliminatingtheneedfortheindustryhasdemonstratedresilience.Forexample,6.Providespecificsupplychaingovernmentsubsidies.Butinrecentmonths,astherecontinuestobestrongdemandforrenewablesupport.06inflationandinterestrateshaverisen,wholesaleprojectsinmanyregionsoftheworld.Severalregionsenergypriceshavedecreased,puttingevenmoreglobally,suchastheMiddleEast,havedisplayedaBarrierpressureontheeconomicsofrenewableprojects.strongcommitmenttotheenergytransition.Forexample,internationalpowerpricespeaked07inAugust2022atbetweenUSDc.420-600perInaddition,severalEastAsianstrategicsandfinancialsmegawatt-hourandhavesincedeclinedsteadily.areseekingtoexpandtheircapacitytoservetheirBarrierboomingdomesticmarketsbypursuingmergersThismixofhigh-interestrates,inflation,anddecliningandacquisitions(M&A)inEuropeacrossrenewable08powerpriceshashadreal-worldimpactsonthevaluationplatformsandinfrastructureproviders.Anotherofrenewabledevelopers.Forexample,theaverageexampleinthisspaceisthestrategicpartnershipBarrierpipelinevalueofthebiggestrenewableEuropeanannouncedinDecember2020betweenOctopusdevelopersdecreasedfromUSDc.660kpermegawatt09inSeptember2022toUSDc.295kinSeptember2023.Barrier33InternationalEnergyAgency(IEA),“WillsolarPVandwindcostsfinallybegintofallagainin2023and2024?”202334InternationalEnergyAgency(IEA),“WillsolarPVandwindcostsfinallybegintofallagainin2023and2024?”20231035UtilityDive,“RenewableenergyPPApricescontinuetorisedespiteInflationReductionActrelief:LevelTen,”202320Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.EnergyandTokyoGastopenetratetheJapanese•TargetedsupporttoopeningmoremarketsforBarrierrenewablemarket,36whichwasfurthersupportedbyrenewables,includingspecificgreenhydrogentherecentlicensingofOctopus’platforminOctoberforthegrid,e-methanol,andammonia,which012023.37Likewise,OctopusEnergyinvestedinsolar-createsgreatercommercialoptionalityforfocusedYotsuyaCapitalinApril2023,aimedatrenewables.BarriersupportingJapan’stransitiontorenewableenergy.38•Strategicplanningongridconnectionto02Manyrenewablestrategicshaveamplecashsuppliesreducedelays.andarepursuingvalueopportunities,whilerenewableBarrierfundsandfinancialinstitutionsalikearemakingAsanM&Aadvisor,thelast18monthssignificantinvestments.havebeenperhapsthetoughesttodateto03mobilizeappetite,marryupbuyerandsellerMarketdynamicssuggestthatenergypricetrendsexpectations,andgetdealsdone.Barriermayinfluenceaccesstocapitalforrenewables.However,relyingsolelyonincreasingenergypricesDevelopersareplayingtheirparttodrive04isnotaviablesolutiontoadequatelyaddressthecapitalback.Integratedsolutionsacrossclimatecrisis.FororganizationsthatareexploringthedifferenttechnologiesandassetscombiningBarrierrenewablesector,we’veidentifiedafewstrategiesgrowingtradingsophisticationdrivesmuchthathavebeeneffectiveinsecuringinvestmentstomorevaluefromgreenelectrons.Alignment05scaleoperationsquickly.andpartnershipswithmajorenergyusersandhardtoabatesectorsenablelongertermBarrierOurrecommendationsinvestmentdecisionstogether.Combiningtheseapproachesprovidesabigopportunity06•Renewablesneedtointegratemorewithfirmtodecouplerenewables,atleastoperationally,powerandtradedpropositionstodrivemorevaluefromlargelyunconnectedcommoditycyclesBarrierfromelectrons.andgeo-politicalenvironment;andtowardsthetruevalueofreliablelowcarbonenergyon07•Developersmustconceptualizeprojectsbyamassscale.takingthewidergreeneconomyintoaccount,Barrierincludingsupplychainintegration.AdrianScholtzPartnerandUKHeadofRenewables08•GovernmentsareunlikelytoreturntountargetedKPMGintheUKsubsidiesandinsteadshouldfocusonspecificareasBarrierwherethereareobviousmarketfailures,including:09•Scalingfloatingoffshorewindsothelevelizedcostofcapitalcomesdown.Barrier36OctopusEnergyGroup,“OctopusEnergyGroupEntersAsiawithlandmarkpartnershipwithTokyoGas,”20201037OctopusEnergyGroup,“KonnichiwaKraken!TechplatformlicensedbyTokyoGastomanage3millionJapanesehomes,”202338OctopusEnergyGroup,“OctopusEnergykicksoffAsianrenewablespushwithfirstJapanesesolardeal,”202321Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Barrier03Barrier01BarrierInvestment02Barrier03Barrier04ingridBarrier05infrastructureBarrier06Barrier07Barrier08Barrier09Barrier1022Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Severalyearsago,theNationalAcademyofSciencesAccordingtoasurveyofrenewableBarrierintheUSreleasedalistofwhatitconsideredtheenergyprofessionals,topengineeringachievementsofthe20thcentury.01Attheverytop,abovetheInternet,automobiles,and74%saidalackspacecraft,waselectricity.39ofnewgridBarrierinvestmentsTheaccoladewasarecognitionofthemarvelthatisisabarrier02theelectricgrid;peopleandbusinessesassumethattoscalingtheelectricityneededtoswitchtheirlightsonortorenewables.Barrierpowertheiroperationswillbethere.Anditalmostalwaysis.ButthegridemergingastheengineforThisrenewables-dominated,decentralizedgridwill03today’smodern,net-zeroworldwilllittleresemblethealsobehighlydigitized,enablingtheuseofmachinepowersystemofthe20thcentury,whichreliedonlearning,artificialintelligence(AI),andtheInternetofBarrierlarge,fossilfuelpowerplantssendingelectricitylongThings(IoT)tobalancesupplyanddemand,identifydistancesinonedirectiontohomesandbusinesses.gridinfrastructurethatneedstobefixedbefore04causinganoutage,andoptimizetheoverallefficiencyInstead,atrulynet-zerogridwillneedtointegrateandreliabilityofthepowersystem.AdvancesingridBarrierlargeamountsofintermittentrenewablegeneration.technologiesareessentialtodrivemomentuminItwillalsobefarmoredecentralizedthanbefore,thetrendtowarddecarbonizedelectrification.But05withcustomer-owneddistributedenergyresourcestheyaren’thappeningquicklyenough.Accordingtoa(DERs)likerooftopsolarandbatterystorageoftensurveyofrenewableenergyprofessionals,74percentBarrierlocatedwherepowerisconsumed.DERsenableansaidalackofnewgridinvestmentsisabarrierto“energydemocracy,”wherelocalcommunitieshavescalingrenewables.06anunprecedentedsayinhowenergyisgeneratedanddistributed.ThisistrueinanycommunitywhereBarrierindividualscanleverageDERstomakedecisionsaboutenergyproductionandconsumption.Butitis07especiallytrueindevelopingnationswheregridpowerdoesn’treachmanycommunitiesandDERscanplayBarrieratransformativeroleinenergyaccess.TheriseofDERscouldrepresentamovementtowardsamore08democratizedenergylandscape.Barrier39TheNationalAcademyofEngineering,“ACenturyofInnovation:TwentyEngineeringAchievementsThatTransformedOurLives,”20030923TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.10Whatshouldgridinvestmentsaccomplish?BarrierAdecarbonized,decentralized,anddigitizedgridcanbeeverybitthemarvelits20th-centurypredecessorwas.Howeveritwillbenefitfromsmartandstrategicpoliciesand01regulationstoincentivizetransformativegridinvestments.Torealizethatpotential,policies,rules,andinvestmentsingridinfrastructurecanbedesignedtoachievethesefouroutcomes:BarrierEnablerenewableenergySupportdistributedenergyFacilitateenergyEnable02integrationresourcesstoragedigitalizationBarrierTheIEANet-ZeroRoadmaphasclarifiedTheenergytransitiondependsinpartEnergystoragetechnologiescanAnonslaughtofsensors,smartthatlimitingaverageglobaltemperaturesonmillionsofindividualsandcompaniesprovidemuchoftheflexibilitythatmeters,anddataanalyticscapabilities03inlinewiththeParisAgreementacrosstheglobecontinuingtopurchaseagridwithsignificantamountsisalreadytransformingthegrid.dependsontriplingrenewableenergyrooftopsolarpanels,energystorage,andofintermittentrenewableenergyAccordingtotheIEA,thenumberofBarriercapacityby2030.40AcceleratingtheotherDERs.IntheUSalone,theDERdemands.Whileenergystoragesmartmetersdeployedworldwideintegrationofunprecedentedvolumesofmarketisforecasttodoublebetweentechnologiesthemselvescanbesurpassedonebillionin2022.4204intermittentwindandsolargeneration2022and2027.41Whileaddingsomanyimproved,investmentsandpoliciesLeveragingdigitaltoolstocollectrequiresagridwithenormousflexibilityDERsnearwhereelectricityisconsumedcanbegearedtopreparethegridandanalyzedatacanmakethegridBarrierandintelligencetobalancesupplyandhasmanybenefits—suchaseliminatingandincentivizeadditionsofthismoreefficient,reliable,andsecure.demandconsistentlybyroutingexcessenergylossesfromtransmittingandimportantsourceofflexibility.WithPoliciesandinvestmentscansupport05energytowhereitisneededmost.distributingelectricitylongdistancesenoughenergystorage—includinganincreasinglydigitalizedgridwhileThisabilitytoefficientlymanagesupplyandmakingcommunitiesmoreenergyshort-durationandseasonalensuringarobustdefenseagainsttheBarrieranddemandbolstersgridutilizationindependent—italsocomeswithstoragetechnologies—thegridgrowingthreatofcyberattacks.whileenhancingsystemreliability.Thischallenges.Unliketraditionalpowerplants,canbecomeaplatformforstoring06becomesincreasinglyimportantasforexample,DERsintroducebi-directionalexcessrenewableenergyforpeakmoretransportation,buildingheatingpowerflows,which,ifunmanaged,candemandandtosupportgreaterBarrierandcooling,andindustrialusesdependresultingridvoltageandfrequencyissueselectrification.onelectricity.thatthreatengridequipmentandtrigger07outages.Barrier40InternationalEnergyAgency(IEA),“Triplingrenewablepowercapacityby2030isvitaltokeepthe1.5Cgoalwithinreach,”202341WoodMackenzie,“TransformationintheUSdistributedenergyresourcemarket,”20230842InternationalEnergyAgency(IEA),“Unleashingthebenefitsofdataforenergysystems,”2023Barrier24Turningthetideinscalingrenewables09©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Barrier10ChallengestogridinfrastructureTosupportthetransportofsomuchcleanenergy,weneedbothalarge-scaletransmissionsystemBarrierinvestments,butsignsofchangeandmoremodernpowernetworks,withthecapacitytointegratethegrowingvolumeofrenewablesources.Theseincreasinglymodernanddigitalizednetworkscanhelpguaranteethereliability,01Becausethegridhasoperatedinessentiallythesameefficiency,andflexibilityofelectricalsystems.Thesenew,morecomplex,moretechnologicalandmannerforwelloveracentury,thepolicies,rules,andinnovativenetworksrequireanadaptationinthedesignandstructuresofmarkets.Barrierparadigmsguidinginvestmentshavenotneededtoevolve,andbecauseelectricityissofundamentaltoFranceliJodas02thefunctioningofglobalsocieties,theriskofchangeGlobalLeader,Power&Utilities,KPMGInternationalcanfeelacute.BarrierEuropeAstheenergysectorevolves,reconsideringregulatoryUS03barriersmaybettersupportgridinfrastructureinvestmentsandthebroaderincorporationofChinaBarrierrenewables.Aroundtheworld,thereareencouragingPhilippinesstepsinthisdirection,including:04Australia•TheFederalEnergyRegulatoryCommissionBarrier(FERC)intheUShasimplementedaseriesofregulationstoincentivizethedevelopmentofa05moremodernandresilientgridinfrastructure.FERCOrder841,forexample,requiresregionalBarriertransmissionorganizations(RTOs)andindependentsystemoperators(ISOs)toestablishrulesfor06energystoragesystemstoparticipateinwholesaleenergymarkets.43Separately,FERCOrder2222BarrierrequiresRTOsandISOstodeveloprulesallowingaggregationsofDERstoparticipateinwholesale07marketsforenergyandgridservices.44Barrier•TheConnectingEuropeFacility(CEF)establishedbytheEUprovidesfundingforcross-border08infrastructureprojects.TheCEFawardsgrantsandloanstosupportsmartgrids,energystorage,Barrierandinterconnectionsbetweennationalenergysystems—creatinganewlevelofinterregional09connectionthatcanlinkexcesssuppliesofrenewablestodemandratherthancurtailingBarriercarbon-freegeneration.451043FederalEnergyRegulatoryCommission(FERC),“OrderNo.841,”201844FederalEnergyRegulatoryCommission(FERC),“FERCOrderNo.2222:FactSheet,”202045ConnectingEuropeFacility(CEF),“AboutConnectingEuropeFacility,”EuropeanCommission,2022,cinea.ec.euopra.eu.Accessed12Oct.2023.25Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.•TheAustralianEnergyRegulator(AER)hasHowtodrivenecessarygridRegulatoryframeworkscanBarrierimplementedaregulatoryframeworkthatinvestments:Fostercollaborationplayaroleinthegrowthofincentivizeselectricitydistributioncompaniesandinnovation01toinvestingridimprovements.TheframeworkBarrierincentivizescompaniesthatdeliverservicesAcommoncomplaintamonggridoperatorsisrenewablesandotherenergyefficiently,reducegridcosts,andimposepenaltiesthatregulatoryconstraintspreventthemfromtransitiontechnologies02forthosenotmeetingperformancetargets.makingproactiveinvestmentsthatcouldacceleratedecarbonization.Forexample,gridoperatorsintheBarrier•Similarly,thePhilippines’EnergyRegulatory03Commission(ERC)hasembracedaperformance-USoftencan’tgettheapprovalneededtoupgradebyconsideringincentivesbasedregulation(PBR)frameworkthatincentivizessubstationsandothergridinfrastructurerequiredtoBarrierelectricitydistributioncompaniestoimprovethesupportelectricvehicle(EV)charging.Thisistrueeventhatencouragerenewable04qualityandreliabilityoftheirservices.ThePBRwhentheoperatorknowsthatalargefleetofEVsisBarrierframeworksetsperformancetargetsfordistributionscheduledtoarriveinthenextfewyears.developmentandthetechnologiesandgrid05companiesandprovidesfinancialincentivesforRegulatoryframeworkscanplayaroleintheinfrastructureneededtothosethatmeetorexceedtheirtargets.growthofrenewablesandotherenergytransitionBarrier•Chinahasenactedabroadsuiteofreformstechnologiesbyconsideringincentivesthatencourage06designedtoreachpeakemissionsby2030andrenewabledevelopmentandthetechnologiesandgridcarbonneutralityby2060.Accordingtoananalysisinfrastructureneededtointegratethem.ThiscanbeBarrierbyKPMGChina,thatnationhasmadesignificantdonetoensurethegrid’ssafety,reliability,andsecurityintegratethem.07progressindevelopingsmartgridtechnologytowhilepromotingcompetitionandinnovation.WorkcanBarrierenhancedemandsidemanagement(DSM)andalsobeaccomplishedintandemwithurbanplanners08energyefficiency.46Thishasincludedcreatingandcityofficials.Citiesproduce60percentoftheadatabasepowersystemthatconnectspowerworld’sgreenhousegasemissions.47IntegratingurbanBarriersupplyinformationtogrid,load,andenergystorageandgridplanningcanbeapowerfulforceforachieving09data.Transmissionanddistributioninfrastructureurbannet-zerotargets.ThistypeofLocalAreaEnergyBarrierinvestmentshaveimprovedrenewableenergyPlanning(LAEP)canbenefitfromleadershipbylocal10deliveryacrossregionsandprovinces.Investmentsgoverningbodies.ThiscouldenhanceaccountabilityinsmartgridsarevitaltoachievingChina’sgoalofandavoidperceptionsofconflictofinterestifgridreducingenergyconsumptionbynearly14percentcompaniesleadthem.perunitofGDPby2025.Aholisticandforward-lookingdevelopmentprocessthatdoesn’tlosesightofthedecarbonizationgoalisrecommended.46KPMGChina,“SmarterGrids:PoweringDecarbonisationThroughTechnologyInvestment,”202347UnitedNations,ClimateAction,“GeneratingPower,”202326Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Principlestoguidegridinvestmentrules,policiesandregulatoryactivitiesBarrierThefollowingprinciplescanguidegridinvestmentrules,policies,andregulatoryactivities:011.Committocollaboration.BarrierGridoperatorscanworkcollaborativelywithotherstakeholdersintheenergysystem,includingenergyproducers,regulators,consumers,andpolicymakers,to02createanenergysystemabletoscalerenewablesrapidly.ThiscanincludeweighingthedifferentinterdependenciesandregionsoftheenergysystemtoplanBarrierimpactfulgridinvestmentsandrulesthatefficientlyintegraterenewablesandaccountfortheirvariabilityandintermittency.Byprovidingfunding,establishing03regulations,andimplementingperformance-basedframeworks,regulatorsplayacrucialroleinencouragingenergycompaniestoinvestingridinfrastructuretoBarriersupportthetransitiontoalow-carbonenergysystem.042.Fosterinnovationandnewtechnologies.BarrierWiththedeploymentofsmartgridtechnology,energystoragesystems,sensors,andflexibletransmissionanddistributionnetworks,themodernizationofgrid05infrastructureisunderway.Gridoperatorsandregulatorscangeartheirworktoencouragethedeploymentoftechnologiessupportingrenewableintegrationandgridreliability,includingvehicle-to-gridtechnologyandthelarge-scalebuildoutofpublicandresidentialEVchargingstations.GridoperatorsandregulatorsBarriercanalsotapthepotentialofbehavioralpsychologytopredictenergyconsumptionpatternsbetter.Thiscanresultinproactivegridinvestmentsthatenablegreaterrenewableenergyconsumption.Innovationoftengoeshandinhandwithregulatoryevolution,whichisalreadyhappeninginsomenations.Forexample,06innovationenablementintheUKincludesElectricityNorthWest’sCLASS(CustomerLoadActiveSystemServices)initiative,whichdeploysvoltagecontrollersinsubstationstomanagepeakelectricitydemand.Barrier3.Enlistcustomersinflexibledemandresponse.07Energyconsumershaveadirectroleindrivingdecarbonizationandensuringgridreliability.ThegrowingnumbersofDERownershaveearnedthenameBarrier“prosumers”fortheirabilitytoactasbothminipowerplantsandtraditionalenergyconsumers.Plannerscanconsiderleveragingtheroleofdemandresponseanddemandflexibilitytoacceleratetheadoptionofrenewables.Thisincludesunderstandinghowconsumerscancontributetobalancingelectricitysupplyand08demandinreal-timeanddesigninggridinfrastructuretosupportdemandresponseprograms.Italsomeansfindinginnovativewaystoensurethatpeoplewhodon’towntheirownhomesorliveinmulti-familyhousinghaveopportunitiestoparticipateandbenefitfromdemandresponseandtheproliferationofDERs.Barrier4.Doubledownonenergyefficiency.09Itcanbeeasytooverlookthevalueofenergyefficiencyinsupportingrenewablesintegrationandgridreliability.Thisisamistake.GridoperatorsandregulatorsBarrierhaveanopportunitytoincentivizethepotentialforenergyefficiencyimprovementsinbuildings,appliances,andindustrialprocessesanddesigninfrastructuretosupportenergy-efficienttechnologiesbetter.105.Embraceeducation.Theemergenceofprosumershasexpandedindividuals’awarenessofhowmuchenergytheyuseandhowitisproduced.However,adecentralizedanddecarbonizedenergysystemrequiresthatenergyliteracybecomethenormratherthantheexception.Whenpeopleunderstandhowenergyisproducedanddistributed,theycanvoicetheirpreferenceforrenewablestoutilities,regulators,andpolicymakers.Itcouldbecomeastandardcomponentinschoolcurriculatoadvanceenergyliteracy.Whilesomeenergyliteracyinitiativesexist,there’sroomforamorecomprehensiveapproach.Forexample,theElectricPowerResearchInstitute(EPRI)developedacurriculumandactivitiestoteachUShighschoolstudentsaboutbasicenergyandelectricityconcepts,differentgenerationtypes,andhowtodecideaboutenergyportfolios.Similarcourseshavebeenofferedinothercountries,includingNigeria,butmuchmorecouldbedonetoimproveenergyliteracy.48TheuptakeofEVspresentsaneducationalopportunitybecauseitchangeshowthepublicengageswithenergy.48ElectricPowerResearchInstitute(EPRI),“ElevatingEnergyLiteracyinNigeria,”202327Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.BarrierBarrier0401PlanningandBarrierpermitting0228TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.03Barrier04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier10Astheworldseekstoaddressclimatechange,asufficientlytomeet2030greenhousegasemissionsandpermittingapprovals.ThisisproblematicformanyBarriertransitiontoanenergysystemprimarilypoweredbyreductiontargetsand,eventually,anet-zeroworld.Butinreasons.Alreadyslowandrigidpermissionprocesses,renewableshasbecomepivotal.Acrosstheworld,anyreformtoexistingplanningandpermittingprocesses,forinstance,canbedelayedevenmorewhenthose01however,theplanningandpermittingprocessesacknowledgingandrespectingcitizensandcommunities’responsibleforguidingdiscussions,evaluatingfeedback,requiredtobuildwind,solar,energystorage,roleintheapprovalprocessiscritical.andultimatelymakingdecisionsmustfirsteducateBarriertransmission,andotherprojectsessentialtodeepthemselvesaboutthebasicsofrenewables.decarbonizationshouldbemovingfaster.Speedyapprovalsthatdon’tconsiderlocalcommunities’02inputarenotthebestwaytofosterenduringsupportFinally,manyexistingplanningandpermittingForexample,intheUS,oneanalysisfoundthatittakesanfortheenergytransition.Stakeholdersshouldconsidermechanismsdon’tincludetoolsandincentivestoBarrieraverageoffouryearstopermit,site,anddevelopautility-maintainingthetransparencyandduediligenceofmitigatepublicandstakeholderoppositiontoproposedscalewindorsolarpowerplant.49AreportbytheNationalexistingplanningandpermittingprocesses.Buttheprojects.Whethertheoppositioniswell-intentioned03AcademiesofSciences,Engineering,andMedicineintheprocessescanbereimaginedtoalignwiththepressingorself-serving,theresultsarelegalchallengesandUScalculatedthatittakesaboutadecadetomovefromsocietalgoalofbuildinganet-zeroeconomy.ThereisaproceduraldelaysthatsloworhaltoftenworthwhileandBarrieridentifyingtheneedfortransmissioninfrastructuretobalancetobestruck.Whileavenuesforlocalcommunitynecessaryprojects.linestransportingcleanelectrons.50involvementcanbepreserved,KPMGprofessionalscan04alsorecognizethattherapiddeploymentofrenewablePlanningandpermittingissuesarebeingThepaceofplanningandpermittingisnofasterinenergyisanoverridingpublicinterest.increasinglyrecognizedasbottleneckstoBarrierothercountries.InCroatia,Sweden,andmanyotherrenewablesdeploymentacrossjurisdictionsnations,itcantakeovertenyearstocompletetheDiagnosingtheproblemandaddressedinrecentpoliciessuchas05developmentofanonshorewindfarm.OffshorewindREPowerEU.Fromspeakingwithawiderangeprojectsareevenmoretime-consuming.Forexample,Effectiveplanningandpermittingreformsareessentialofinfluentialstakeholders,KPMGprofessionalsBarrierintheUnitedKingdom(UK),ittakesanaverageoftoidentifyandrectifycurrentinefficiencies.Thoughhavefoundthatseveralkeyplanningand12yearstoplan,permit,anddevelopanocean-basedjurisdictionsworldwidevaryandhavestrengthsandpermittingimprovementareasarecommon06windpowerplant.51Thischallengingrealityhelpsweaknesses,severalcommondeficienciesexist,acrossjurisdictions,mostnotablyadequateexplainwhynearlyhalfoftherenewableenergyresultinginmostsurveyrespondentsfeelingneutralresourcingofstatutorybodies,strongstrategicBarrierindustryprofessionalssurveyedbyKPMGInternationaloruncertainabouttheeffectivenessofcurrentdirectioninpolicy,streamlinedandsimplifiedsaidthatplanningandpermittingbottlenecksaregovernmentalpolicies.Onechallengeobservedisplanningprocedures,increasedcollaboration,and07significantobstaclestoscalingrenewables.Anothertheneedforaclearerlong-termstrategyinpolicyclearprioritizationofrenewableenergyprojects.30percentsaidtheyareamoderateobstacle.andregulationthatalignswithnet-zeroobjectives.BarrierEstablishingaparadigminwhichtheplanningandJamesDelahuntSpeedierapprovalsthatstillpermittingofrenewableprojectsisviewedthroughthePartner,CorporateFinance,08encouragepublicinputprismofadvancingnet-zeroprogresscouldaccelerateKPMGinIrelandapprovals.BarrierShorteningthetimeneededtomoveprojectsthroughmandatoryapprovalprocessesisseenbyindustryAnothershortcomingisaneedformorebasicknowledge09leadersasanessentialsteptowardsscalingrenewablesabouttheoperationandimpactsofrenewabletechnologiesamongthoseresponsibleforplanningBarrier49Worley,PrincetonUniversity,andAndlingerCenterforEnergy+theEnvironment,“Fromambitiontoreality:Weavingthethreadsofnet-zerodelivery,”20211050TheNationalAcademiesofSciencesEngineeringMedicine,“AcceleratingDecarbonizationoftheUSEnergySystem,”202151EnergyTransitionsCommission,“Streamliningplanningandpermittingtoacceleratewindandsolardeployment,”202329Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.ThreecommondeficienciesinBuildingonhopefulmomentumemerges.GovernmentsoftensetasidespecificblocksBarrierplanningandpermittingreform:fordrillingbasedonpotentialhydrocarbonreserves.InThereisagrowingawarenessandactionaboutasimilarvein,RenewableEnergyBlocks(REBs)canbe01Lackoflong-termtheneedtoreformrenewablesplanninganddesignated,highlightingareaswithoptimalrenewabledirectionpermitting.Forexample,intheaftermathofRussia’senergypotential.TheseREBs,akintonationalparks,Barrier2022invasionofUkraine,theEuropeanUnionprotectandprioritizetheirinherentvalue,inthiscase,inpolicyandregulation(EU)committedtoacceleratingrenewableenergyrenewableresources.Justasdrillingblocksexpedite02deploymentstodecreasedependencyonimportedtheoilandgasexplorationprocess,REBswouldLackofbasicgas,enhanceenergysecurity,andaccelerateprogressstreamlinetheplanning,permitting,anddevelopmentBarrierknowledgetowardstheEU’s2050net-zerotarget.52ofrenewableprojects,addressingkeybarrierstoscalingrenewables.03abouttheoperationandRePowerEUisthecontinent-widesetofenergy-impactsofrenewablerelatedactionsrespondingtoRussia’sinvasionandInTexas,theheartlandofAmerica’soilandgasBarriertechnologiestheenergycrisisitspawned.Spearheadedbytheproduction,theintroductionofREBshasbeenEuropeanCommission(EC),REPowerEUincludesinstrumentalinsparkingasignificantupswingin04Lackoftoolsandspecificrecommendationstosimplifyandspeedwindandsolarenergyprojectsbystreamliningandincentivesupthecomplexandtime-consumingpermittingprioritizingpermitting.TheNetherlandsandDenmarkBarrierprocessesthatpreventprojectsfrombeingbuilthavealsoembracedaone-stopapproachtopermittomitigatepublicandquickly.53andbuildnewrenewablesquickly.Atthesame05stakeholderoppositiontotime,GermanyrecentlypassedalawthatrequiresproposedprojectsAmongREPowerEU’srecommendationsarefor1.7percentofitslandmasstobesetasideforwindBarrierplanningandpermittingbodiestorecognizethatdevelopmentby2027and2percentby2032.54renewableenergyisanoverridingpublicinterest.This06recognitionwouldhelpaddressthecurrentimbalanceIntheUK,severalrecommendationstostreamlinethatallowsrenewableprojectstostallwhenpriorityispermittinghavebeenproposedtothenation’sNationalBarriergiventoothersocietalinterests.AnotherREPowerEUGridElectricityOperator(ESO),OfficeofGasandproposalwouldestablishdedicatedgo-toareasforElectricityMarkets(Ofgem),andothergovernment07renewabledevelopmentwithshortandstraightforwardagencies.Theseincludereformingtheinterconnectionpermittingprocessesandacaponthetimeallowedtoqueuetoprioritizethe330gigawattsofrenewablesBarrierdebatepermittingdecisions.currentlyawaitingagridconnectiontomoveforward.AnotherproposalwouldamendtheUK’sNational08DrawinginspirationfromboththeallocationofPlanningPolicyFramework(NPPF)toallowonshoredrillingblocksintheoilandgasindustryandthewindandsolarprojectsthathavegarnered“sufficient”Barrierestablishmentofnationalparks,acompellingapproachlocalsupporttomoveahead.0952RePowerEU,“RePowerEUataglance,”EuropeanCommission,2022,commission.europa.eu.Accessed5Oct.2023.53RePowerEU,“RePowerEUataglance,”EuropeanCommission,2022,commission.europa.eu.Accessed5Oct.2023.Barrier54DW,“Germany’sScholzpledgesrapidonshorewindpowerexpansion,”20231030Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Threeprinciplestoimproverulescanalsohelp.Collaborationbetweenregulators,consensusthatacceleratingrenewablesisthevehicleBarrierplanning:Collaboration,simplicity,renewabledevelopers,andcommunitiesbenefitstoreduceemissionsrapidly.andprioritizationeveryone.01Newformsofincentive.RenewableprojectspresentWhileexamplesofimprovedplanningandpermittingPromoteclarityandequipdecision-makerswitharangeofadvantageswithpotentialsocietalimpacts.Barrierareencouraging,theyremaintheexceptionratherthanthenecessaryknowledge.It’snolongerviableforButsometimes,thosebenefitsneedtobeunderstoodthenorm.Asmorenationsandpermittingjurisdictionsknowledgeaboutrenewablestobescarceinthemorepersonallytoconvincecommunitiestosupport02considerreforms,theireffortscanbeguidedandofficeswherepermittingdecisionsaremade.Devotingnewprojects.Planningandpermittingcanmovefasterimprovedbytheseprinciples:resourcestohireknowledgeablestaffersisworthwhen,forexample,newwindandsolarprojectslowerBarriertheinvestment;thelearningcurveforinexperiencedtheenergybillsofsurroundingcommunities,andthatPromotecollaborationtowardsachievingsharedstaffcanbeshortenedbysolicitingindustryexpertise.benefitisclearlycommunicatedtothem.Thebenefits03objectives.TheworldknowshowtosetclearandAnyreformtopermittingandplanningprocessescanneedtobeobviousandwell-understoodbycommunityambitiousnet-zerotargets.Over150countriesandseektomakerulesmorestreamlined,simplified,andmembers.BesideslowerbillsforthoselivingnearBarrierhundredsofcorporationsintendtobecomecarbon-repeatable.Designedproperly,permittingandplanningrenewableprojects,improvedinfrastructurelikeroadsneutralorpoweredby100percentrenewablecanbeatooltopromoteratherthaninhibitthescalingandschoolscanresultfromrenewabledevelopment.04energy.55,56Thoseresponsibleforplanningandofrenewables.TechnologycanalsoplayanimportantRenewablecompaniescanalsoconsiderofferingpermittingapprovalscancommunicatetheclearroleinmodelingandvisualizingthepotentialimpactsoftrainingandtheopportunityforhigh-qualitycareerstoBarrierconnectionbetweentherapidgrowthofrenewablesrenewableprojects,whichcanhelpinformdecisions.peopleinthecommunitieswheretheywork.andtheachievementofclimategoals.Theycanalso05integratetheobjectiveofquicklyscalingrenewablesEnhancetheprioritizationofrenewableenergy55ClimateGroupRE100,“RE100Members,”2023,there100.org/re100-intotheirpolicyandregulatoryactivitythroughreducedprojectsinplanninganddecision-making.members.Accessed15Sept.2023Barriercomplexity.IncreasedengagementbetweentheStakeholderscanbevocalintheirsupportofcleanenergyindustryandpolicymakersinformulatingrenewables.Thesubjectofthedebatecanevolve56NetZeroTracker,“DataExplorer,”2023,zerotracker.net,Accessed2606fromnet-zerogoals,andallstakeholderscanseekOct.2023BarrierPrinciplestoimproveplanningandpermitting07WorktogetherEnsuresimplicityLoudlyClearlyBarriertowardsaclearandgivedecisionmakersprioritizerenewablescommunicatetargettheexpertisetheyneed08newformsofincentivesBarrier09Barrier1031Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.BarrierBarrier0501AcceleratingBarrierstoragesolutions0232TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.03Barrier04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier10ForninehoursinMayof2023,Spain’selectricgridRenewables:Renewablepowergenerationranentirelyonrenewableenergy.57Itwasn’tthefirsttimealargeelectricitymarkethadbeensuppliedby25%0.3%Barrier100-percentrenewablegeneration.InMarchof2023,BrazilbrokearecordforrenewableenergyproductionEuropeCIS01whenrenewablesrepresented90percentofallenergygeneratedinthecountry.Ayearearlier,Californiabriefly0.6%47.6%BarrierproducedmorerenewableenergythantheUSstate(andfourth-largesteconomyintheworld)required.58MiddleEastAsiaPaciﬁc02SmallernationslikePortugalhavealsoachievedthesamefeatformuchlongerperiodsoftime.5919.1%BarrierThereasonthesemilestonesattractheadlinesisNorthAmerica03becausetheyaresorare.Over60percentofglobalelectricitygenerationisproducedwithfossilfuels—6.2%1.2%BarrieranamounttheIEAsayswillhavetofallbelow30percentby2030fortheworldtoreachnet-zeroSouth&CentralAmericaAfrica04carbonemissions.60However,tremendousadvancesinenergystoragearenecessaryfordeploymentsofExajoules(input-equivalent)(2022)Barrierrenewableenergytoreachthescalerequiredtomakeperiodsof100-percentrenewableelectricityproduction05morethenormthantheexception.BarrierThereasonenergystorageissovitaltorapidlyscalingrenewablesisobvious.Becausewindandsolar06areintermittentanddependonfavorableweatherconditions,powergridswithabundantrenewablesBarrierneedresourcestohelpmeetdemandwhenthesunisbehindthecloudsandthewindiscalm.Inthecontext07ofrenewables,flexibilityistheabilitytoimmediatelyfillgapsinsupplyaswindandsolargenerationebbandBarrierflow.Powergridswithlargeamountsofrenewablesneedtheflexibilitythatenergystoragecanprovide.0857ElPaís,“TheninehoursinwhichSpainmadethe100%renewabledreamareality,”2023Barrier58Bloomberg,“CaliforniaPoisedtoOvertakeGermanyasWorld’sNo.4Economy,”202259TheGuardian,“Portugalrunsforfourdaysstraightonrenewableenergyalone,”20160960ElectricityMarketReport2023,InternationalEnergyAgency(IEA),February2023Barrier33Turningthetideinscalingrenewables10©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Withoutflexibilityprovidedbyenergystorage,Momentumbuildsforenergyfornetzeroby2050,accordingtotheIEA.BytheBarrierachievinghigherlevelsofrenewableintegrationstorage,butthereismoretoIEA’sestimates,grid-scalebatterystoragealonemustbecomeschallenging.Powersystemswithlargeachievereach970GWby2030,nearlydoublewhatBNEF01amountsofrenewablesalsoneedtoreplacethegridprojectsforallenergystoragecapacitybythen.64balancingservices,suchasfrequencyandvoltageThepastfewyearshaveseensignificantdeploymentsEnergystoragechallengesextendbeyondtheneedBarrierregulation,thattraditionalgeneratorshavehistoricallyofenergystorage.AccordingtoBloombergNewtoexpandcapacitymassively.Energystoragemustsuppliedtomaintaingridreliability.EnergystoragecanEnergyFinance(BNEF),2022sawtheinstallationof02enhancegridreliabilitybyprovidingvoltagestability,16gigawatts(GW)/35gigawatt-hours(GWh)ofenergyDriversofthegrowthinenergyfrequencyregulation,andpeakingcapacity.Storagestoragecapacityglobally,anincreaseofnearlystorage:Barrierpairedwithrenewablescanalsoreducetheneed70percentfrom2021.61tobuildadditionalgridinfrastructurebylowering1.Flexibilitytobalancegridswith03gridcongestionandmaximizingtheuseofexistingThepaceofdeploymentisacceleratingquickly.increasingamountsofrenewablecapacity.ThisispossiblebecauseenergystorageInOctober2022,BNEFprojectedthatcumulativeenergyBarrierco-locatedwithrenewablegenerationhashigherenergystorageinstallationswouldreachutilizationpotentialthanwindorsolargenerationalone.411GW/1,194GWhbytheendof2030.62However,2.Opportunitytoearnrevenue04sixmonthslater,thatforecasthadtoberevisedfromgridservicesandwholesaleAccordingtoBloombergNewEnergyupwardto508GW/1,432GWh.63MyriaddriversaremarketsBarrierFinance(BNEF),2022sawthepropellingthegrowthofenergystorage,whichtodayinstallationof16gigawatts(GW)/35ispredominantlyprovidedbypumpedhydropower3.Applicationinmicrogrids05gigawatt-hours(GWh)ofenergyandgrowingamountsoflithium-ionbatterystorage.4.Optimizationofvaluablegridstoragecapacityglobally,anincreaseofBarriernearly70percentfrom2021.Onedriverofstoragegrowthistheabilitytoconnectionsprovidethenecessaryflexibilitytobalancegrids5.Uninterruptedbackuppower0670%2022withincreasingamountsofrenewables.AnotheristheopportunityforenergystorageownerstoearnsupplyatC&IfacilitiesBarrier2021revenuebydeliveringgridservicesandparticipatinginwholesalemarkets.Otherusesspurringdemand07forstorageincludeitsapplicationinmicrogrids,co-locationwithrenewablestooptimizevaluablegridBarrierconnections,anduninterruptedbackuppowersupplyatcommercialandindustrialfacilities.08However,thecurrentgrowthrateofenergystorageBarriermightnotmatchtheanticipatedriseinrenewableenergycapacity.Grid-scalebatterystorage,for09example,mustgrow35-foldby2030tobeoncourseBarrier61BloombergNewEnergyFinance(BNEF),“1HEnergyStorageMarketOutlook,”202362BNEF,“GlobalEnergyStorageMarkettoGrow15-Foldby2030,”20221063BNEF,“1HEnergyStorageMarketOutlook,”202364InternationalEnergyAgency(IEA),“TrackingCleanEnergyProgress2023,”202334Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.alsodeliverelectricityandotherservicestothegridlargeparttocompetitionfromtheproducersofEVEnergystoragedeploymentsBarrierforincreasinglylongdurations.Currently,utility-scalebatteries.Pressuresonmining,processing,andcellwillonlyacceleratetothebatterieshavedurationsrangingbetweentwoandmanufacturingcanbeexpectedtoincreaseandarelevelarenewables-dominated0110hours,withthevastmajorityatthebottomendoflikelytoslowprojectdeliverytimesandputupwardgridrequireswhenprojectsthatrange.65Storagesolutionscapableofprovidingpressureonprices.WhilemostapparentforbatteryarefinanciallyattractivetoBarrierextendedorseasonaldurationswillbeneededforenergystorage,othertypesofenergystorageinvestorsanddevelopers.timesoftheyear,likeinwinterwhensolarproductionarenotimmune.Forexample,pumpedhydro02islowandduringtimeswhenwindisinsufficienttoneedssignificantengineeringexpertiseandskilledproducemuchenergy.Eventually,seasonalstorageconstructionlabortobuildprojects.TheirgeographicBarriersolutionscouldreplaceshort-durationstorage,butconcentrationalsothreatensaccesstomineralsinbothneedsubstantialdevelopmentandimprovement.relativelyfewcountriesandexposuretogeopolitical03Theselonger-durationstorageoptionswilllikelyrequirerisks.Therearealsochallengestoconvertinggasdifferenttechnologies,includinghydrogenstoragestoragetohydrogenstoragethatmustbeovercome.BarrierFinancialviabilityisthefirstof•Gridaccess.Energystoragecanplayasignificant04manychallengestosolveroleinsupportingarapidscalingofrenewablesonlyifitcanconnecttothegrid.ButthewaittimesandBarrierEnergystoragedeploymentswillonlyacceleratetocostsofgettingmoreenergystorageonthegridChallengespreventingrapid05thelevelarenewables-dominatedgridrequireswhenaregrowing,especiallyintheUS.Forexample,aenergystoragedeployment:projectsarefinanciallyattractivetoinvestorsandreportbytheLawrenceBerkeleyNationalLaboratoryBarrierdevelopers.Thatisnotcurrentlythecasebecause(LBNL)foundthattransmissionqueuesintheUS1.Supplychainconstraintsmostenergystorageprojectslacksufficientcontractedhadabout670GWofstorageprojectsawaiting2.Gridaccess06revenuetofacilitateaccesstofinancing.Currentpowerconnection.66TheUSDepartmentofEnergy3.Talentshortagemarketdesigns,whichareheavilydependentonfossil(DOE)hasalsofoundthatlongdelaystranslateintoBarrierfuels,haveresultedinalackofrevenuecertaintyballooningprojectcosts.6707forotherenergysolutionslikerenewables.Thisisa•Talentshortage.It’snotdifficulttofindnewschallengeforallenergystoragetechnologiesbutisarticlesandanalyseslamentingtheshortageBarrieraparticularproblemforlarge-scaletechnologieslikeofskilledworkersinthesolarandwindpumpedhydrothattakealongtimetobuild.industries.68,69Thiscoveragehastriggered08Otherchallengespreventingrapidenergystorageactiontobeginclosingthegap.EnergystorageBarrierdeploymentsinclude:facesanequallywidegapbetweenthesupplyofskilledemployeesandgrowingdemand,yet09•Supplychainconstraints.Thedemandforthepolicymakersandotherstakeholdershavenotcriticalmineralsnecessarytoproduceenergyprioritizedadequatelystaffingtheindustry.Barrierstorageisunprecedentedandgrowing,thanksin1065NationalRenewableEnergyLaboratory(NREL),“AnnualTechnologyBaseline,”202366LawrenceBerkeleyNationalLaboratory(LBNL),“Gridconnectionrequestsgrowby40%in2022ascleanenergysurges,despitebacklogsanduncertainty,”202367USDepartmentofEnergy’sOfficeofEnergyEfficiency&RenewableEnergy,“TacklingHighCostsandLongDelaysforCleanEnergyInterconnection,”202368TheWashingtonPost,“Thenextlaborsecretarywillfaceabigshortageofclean-energyworkers,”202369S&PGlobal,“Skillsshortageimperilsglobalenergytransition,”202235Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Innovativemarketdesigncaninothermarkets.Thesepaymentscangoalong•Transmission:Ensurewholesalemarkets,ancillaryBarrierenhanceenergystoragefeasibilitywaytowardsmakingprojectsfinanciallyviableandservices,andcapacityschemesareaccessibletoencouragingthedeploymentoflargerprojects.Andthevariousstoragetechnologies.01Akeyimmediatesteptoenhanceenergystoragedevelopmentoflargeprojectshelpstodriveeconomiescapacityisensuringlong-termrevenuepredictabilityofscaleandsubsequenttechnologycostreductions,•Distribution:EnsureconstraintmanagementBarrierforpotentialinvestors.Marketdynamicsandpowerwhichspeedsdeployment.andvoltagesupportschemesareaccessibleandsystemneedsvaryconsiderablyaroundtheglobe,attractivetostorageassets.02meaningnosinglesolutionapplieseverywhere.AndIncomeguarantees.Capandfloorcontractsareit’svitalforanyproposedchangestoencourageexcellentexamplesofincomeguaranteesthathave•Behind-the-meter:InnovativetariffscanBarrierinvestmentthatdoesn’tdistorttherestofthemarket.successfullyenabledprivatesectorinvestmentinincentivizetheuseofstoragetominimizehigher-riskenergyinfrastructure.Thiscontractstructurecustomerexposuretohighpricesandenable03Stakeholderscanachievemultipleobjectivesatonceguaranteeslong-termminimumandmaximumaggregatingstorageassetsintoVirtualPowerthroughwell-designedpoliciesonenergystorage.revenuesfornewprojects,providingrevenuecertaintyPlants(VPPs)thatprovidegridservices.BarrierThoughtfulpoliciescanunlockthebenefitsofenergytomitigateagainstvolatileenergyprices.ThishasbeenstoragebycatalyzingprivatesectorinvestmentandhighlysuccessfulatbringingforwardinvestmentinThereisanincreasingdemandfornotonly04minimizingtheneedforsubsidies.interconnectorsintheUKandiscurrentlyproposedashigherrenewablespenetrationandproductsthemechanismforbringingforwardlarge-scale,long-suchasroundtheclockpowerbutalsoforBarrierDecision-makerscanharnessthepowerofdurationstoragesuchaspumped-hydro.flexibleandschedulablegreenenergy.Hence,appropriatelydesignedmarketsignalsthatrewardstoragehasbecomethekeyingredienton05theuniquesystembenefitsthatenergystoragecanContractsfordifference.Theseagreementswhichclimateambitionsaroundtheworldprovide.Oneexampleistherecentlyimplementedguaranteeafixedpaymentforeachmegawatt-hourcloselydepend.ThekeywouldbetoleverageallBarriersuiteoffrequencyresponseproductsintheUK.Theseofpoweroutput.Allocatedviaauction,theguaranteetechnologiesavailablewhetherthisisbatteries,aredominatedbybatterystoragebecausemarketensuresthatstorageassetownersreceiveatop-uppumpedhydro,hydrogenandotherinnovative06requirementsdemandrapid,sometimessub-secondpaymentifmarketpricesfallbelowthecontractedtechnologiestomeetvariedrequirements.responsetimesandbuildontherevenuestreamsrate.ThisprotectsthemagainstlowpricesandWhilerenewablesarecheaperthanfossilfuelsBarrieralreadyavailabletobatterydevelopersandowners.improvesinvestorconfidence.inmostpartsoftheworld,addingstoragecanaffecteconomicadverselytoday.Hence,07AdditionalinnovativemarketdesigncanincludeStateequity/grantfunding.Statefundingcanthekeyimperativeistomassivelyfocusonstrategiessuchas:alleviatetheinitialcapitaloutlayrequiredforenergybringingdowncoststhroughscale,partnerships,BarrierstorageprojectsandencourageprivateinvestmentbysupplychaintransformationaswellasrevenueLong-termsystemoperatorcontracts.Theseprovidereducingrisk.Anexcellentexampleofthisapproachoptimizationthroughvaluestackingenabled08storageassetswithapredictablerevenuestreamoveraistheUSIRA,whichprovidesupto30percenttaxbysmartmarketdesignandcommerciallongerperiod,whichmakesiteasiertoattractfinancingcreditstosupportenergystorageprojects.frameworks.Barriertofundstoragedevelopment.Forexample,theUK’sShort-TermOperatingReserve(STOR)allowsforfixed-Incentivizegridservices.GridcodesandancillaryAnveshaThakker09pricecontractsofuptotwoyearsandhasbeenwidelyservicerulescanbeformulatedtoincentivizethePartner&NationalLead—CleanEnergyutilizedbypumpedhydroprojects.selectionofthelow-carbonflexibilityenergystorageKPMGinIndiaBarrierprovidesoverfossilfuel-basedbalancingservices.State-backedcapacitypaymentsthatcompensateSmartmarketdesigncanalsoensurestorageassets10storageassetsjustforbeingavailablebenefitnewercanparticipateinabroadrangeofwholesalemarketorlessestablishedstoragetechnologiesbecausetheyandgridservices,including:mitigatetheriskthattheassetswillbeunderutilized36Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Government-industrycollaborationStepsgovernmentandindustryBarrierandinvestmenttotacklestoragecantaketoscalestoragechallengesdeployment:01ThereareotherimmediatestepsthatstakeholdersshouldPrioritizingBarrierpursuetohelpscalestoragedeployment.Approachestoeliminatebarrierspreventingarapidincreaseinenergyspeedygridconnection02storagecapacityinclude:InvestingBarrierPrioritizespeedygridconnection.Itmightbebeneficialforauthoritiestoconsiderrevisingapprovalprocessestototacklesupplychain03facilitatequickerconnectionofstoragefacilities.CurrentconstraintsprocessesslowprojectprogressanddisincentivizenewBarrierprojects.Collaborating04Investintacklingsupplychainconstraints.toclosetheGovernmentsandindustryshouldinvestinbroadeningtalentgapBarrierthesupplychain,reducingdependencyonsingleregionsorsuppliers,andlimitingexposuretogeopoliticalrisk.Providing05Favorablepoliciessuchasgrants,taxbreaksorlow-interestfinancingcanhelpincentivizeabuild-outoflocalresourcesBarriersupplychaincapabilities.toadvancestorage06Collaboratetoclosethetalentgap.EnergystoragetechnologiescompaniescanproactivelyengagewithacademicBarrierinstitutionstodevelopprogramsfocusedonenergystorage.Theseprogramscanprovidetheskillsandeducation07studentsneedtoinstallenergystoragesystemsandpursueresearchtoimprovetheperformanceofstorageBarriertechnologies.Governmenteducationcampaignshighlightingtheimportanceofenergystorageinadecarbonizedenergy08systemcanraiseawarenessandencouragestudentsandworkerstopursueacareerintheindustry.BarrierProvideresourcestoadvancestoragetechnologies.09Considerationcouldbegiventothepotentialbenefitsofincreasedresearchanddevelopment(R&D)fundingBarrierinreducingthecostsofstoragetechnologies.R&Dcanimproveexistingstorageoptions’performanceanddrive10theinnovationnecessaryfornewtechnologiestoemerge.37Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.BarrierBarrier0601SupplychainBarrierissues0238TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.03Barrier04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier10TheconnectionbetweenresilientsupplychainssurveyedbyKPMGInternationalcitedsupplychainFurthermore,Barrierandrenewableenergydeploymentcameintosharprisksasasignificantobstacletoscalingrenewables.focusduringtheCOVID-19pandemic.Ready-to-build61%01renewableenergyprojectsstoppedwhenCOVID-19Alackofequipmentneededtodevelopprojectsisn’tthelockdownsledcleanenergymanufacturingfacilitiestoonlynegativeimpactofsnarledsupplychains.PricesofrenewableenergyindustryBarrierstoporslowproduction.alsorisewhensupplychainsaren’tfunctioningcorrectly.stakeholderssurveyedbyKPMGLevelTenEnergytracksrenewablepowerpurchaseInternationalcitedsupplychainrisks02IntheUS,theSolarEnergyIndustriesAssociationagreement(PPA)pricesinEuropeandNorthAmerica.asasignificantobstacletoscaling(SEIA)calculatedthatone-thirdofsolarcapacityThroughoutthepandemic,LevelTen’sPPAIndexroserenewables.Barrierscheduledtobecompletedinthefourthquarterof2021steadilybeforemoderatingrecently.73Themainreason:wasdelayedduetotransportationbacklogsandlackBetween2020and2022,pricesofsolarcellsand03ofequipment.SEIAalsofoundthatsolardevelopersmodulesincreasedbyover40percent,mainlyduetoacanceled5percentanddelayednearly10percentofthesix-foldriseinpolysiliconpricesandothersupplychainBarrierprojectstheyhadplannedfor2022and2023.70problems.04Morerecently,supplychainproblemshavebeenaOptimizingsupplychainprocessesmayplayaprimarycauseofdelaysinoffshorewindprojects.significantroleinscalingrenewablestoreachtheBarrierInAugustof2023,forexample,thedeveloperofworld’stargetsrapidly.TheIEAprojectsthatgloballargeoffshorewindprojectsofftheeasterncoastrenewablepowercapacitymustexceed10,00005oftheUScitedsupplychainissuesinannouncinggigawattstoachievenet-zerocarbondioxideemissionsdelaysofthreeprojectsandthepotentialslowdownby2050.74Underthatscenario,theworldmustaddBarrierofmore.71ChallengesareevidentbeyondtheUSasbetween800and900gigawattsofsolarandwindwell.TheGlobalWindEnergyCouncil(GWEC)recentlyeachyear,asignificantincreasefromthenearly30006downgradeditsnear-termoffshorewindforecastgigawattsinstalledin2022.BrokenanddisruptedforNorthAmericaandEuropeby17percent,partlysupplychainsthreatentoputthatpaceofdeploymentBarrierbecauseofsupplychainchallenges.72Furthermore,outofreach.61percentofrenewableenergyindustrystakeholders0770SolarEnergyIndustriesAssociation(SEIA”andWoodMackenzie,“USSolarMarketInsight,”2022Barrier71Reuters,“CostcrunchpromptsmassrethinkofUSoffshorewindcontracts,”202372GlobalWindEnergyCouncil,“GlobalOffshoreWindReport2023,”20230873LevelTenEnergy,“LevelTen’sPPAPriceIndexQ2,”202374InternationalEnergyAgency(IEA),“NetZeroby2050:ARoadmapfortheGlobalEnergySector,”2021Barrier39Turningthetideinscalingrenewables09©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Barrier10TherisksofageographicallyconcentratedsupplychainBarrierItwouldbeamistaketobelievethechallengeofbuildingreliablesupplychainsislimitedtotheuniquedisruptionsspawnedbyaglobalpandemic.Whilethedemand01forrenewablesisgrowingglobally,therawmaterialsandmanufacturingcapacityneededtoproducesolarpanels,windturbines,energystorage,andothercleanenergycomponentsareconcentratedinafewcountries.BarrierSolarEnergyThegeographicconcentrationofglobalrenewablesupplychainscarriessignificantrisks02•Chinaproducesmostofthesiliconusedtomakesolarpanels.75Polysiliconmanufacturingisspearheadedbyjusttencompanies,sevenbasedinBarrierChina.7603•In2020,floodsforcedtheclosureoftheChinesefactoryofTongwei,theworld’slargestpolysiliconproducer,resultinginasharpriseinglobalpolysiliconandsolarmoduleprices.77BarrierWindEnergy•Chinaproducesabout60percentoftheworld’swindblades.7804•Thewindindustryreliesoncommoditieslikesteel,copper,andaluminum,allofwhichhaveexperiencedhighpricevolatilityduetoCOVID-19andBarrierRussia’sinvasionofUkraine.7905Batteries•Batterystorageproductiondependsonreliableaccesstomineralslikenickel,lithium,cobalt,manganese,andgraphite,thesuppliesofwhichareinahandfulofcountries,suchasAustralia,China,Chile,andtheDemocraticRepublicofCongo.80BarrierEvenwithsignificantincreasesinproductioncapacityacrosstheworldby2030,Chinaisforecasttocontinuetodominatesolar,wind,andbatterymanufacturing.TheUS,06India,andtheEUallhaveambitiousplanstogrowtheirrenewablesupplychains.BarrierWhenthematerialsandproductioncapacityforrenewabletechnologiesareinafewcountries,theavailabilityoflow-pricedshippingtotransportgoodsaroundtheglobebecomesparamount.Recentexperiencedemonstratesthiscan’tbetakenforgranted,giventhesignificantincreaseinshippingcostsduringandafterCOVID-19.Dramatic07increasesinpricesforinternationalshippinginrecentyearscontributedtoalargeuptickinthecostofallrenewableenergycomponents.81Barrier75StatistaResearchServices,“Majorcountriesinsiliconproductionworldwidein2022,”202376PVMagazine,“Tongweiledglobalpolysiliconcapacityin2022,saysBernreuterResearch,”20230877PVMagazine,“Tongweiledglobalpolysiliconcapacityin2022,saysBernreuterResearch,”202378NikkeiAsia,“Chinesemanufacturersdominatewindpower,taking60%ofglobalmarket,”2023Barrier79JournalofEconomicandFinancialSciences,“Metalpricebehaviorduringrecentcrises:COVID-19andtheRussia-Ukraineconflict,”202380StatistaResearchServices,“Majorcountriesinworldwidelithiummineproductionin2022,”20230981InternationalMonetaryFund(IMF),“HowSoaringShippingCostsRaisePricesAroundtheWorld,”2022Barrier40Turningthetideinscalingrenewables10©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Auxiliaryequipmentandsocialandenergystorage.84ANaturalResourcesDefenseDevelopedanddevelopingnationsareprioritizingBarrierimpactchallengesCouncil(NRDC)reportfoundthatlithiummininginensuringreliable,cleanenergysupplychains.ThisChilethreatensaccesstopreciouswaterresourcesforcanoftentranslateintogovernmentinvestmentsin01EncouragingprogresshasbeenmadetoexpandtheIndigenouscommunities.85domesticmanufacturingorpreferentialtreatmentofproductionofrenewableenergytechnologiestomeetimportsfromcountriesviewedasallies.ThedomesticBarrierrisingdemand.Forexample,announcedcapacityAhigherstandardandlegislativeandglobaldemandforrenewableproductswillbeadditionscanexpandpolysiliconproductionbythree-mandatesdeterminedbyamixoffactors,includingissueslike02and-a-halftimesanddoublethemanufacturingofsolarhumanrightsandenvironmentalimpact,aswellascellsandmodules.82Renewableenergysupplychainsareheldtohigherstrategicandgeopoliticalconcerns.BarrierhumanrightsandenvironmentalprotectionstandardsTheseannouncementshaveyettobecomereality,thanthefossilfuelindustry.MediastoriesandreportsConcentratedsupplychainsexposethe03ofcourse,butaless-recognizedchallengethatcouldfromadvocacygroupsaboutecologicaldegradationglobalambitionsoncleanenergytodeepderailtherapidexpansionofrenewablesisinsufficientandhumanrightsabusesintherenewableenergyvulnerabilitieswhichcanhavefarreachingBarrierproductionoftheothercomponentsthatgointosupplychaincanhaveanegativereputationalimpactconsequencestoclimatetargets.Addressingmakingcleanenergyequipment.Solarpanels,forthatcanslowcleanenergydeployments.thisthroughdiversifyingsupplychainsisnot04example,needhigh-qualityglassandgelsandmustonlyanimperativebutalsopresentsanattractiveeventuallybeinstalledonmountingsystemsonroofs,Besidessimplybeingtherightthingtodo,severalopportunityforequitablegrowth.GlobalenergyBarrierinthegroundand,increasingly,floatingonthewater.otherdriverscanspurtherenewableenergyindustrytransitionissettoevolvetoaUSD4.5trillionThemanufacturingcapacityofthisoftenoverlookedtoproactivelytacklethechallengesofbuildinganannualopportunityby2050whichwilllikely05butessentialauxiliaryequipmenthasnotkeptupwithequitable,sustainable,andhigh-capacitysupplychain.requirecountriesstronginmanufacturingandthepaceofdemand,leadingtopredictableresults.AEarlierthisyear,forexample,theEuropeanUnion’swithasupplyofskillstostepup,collaborateBarriershortageofsolar-gradeglassin2020resultedinprice(EU)CorporateSustainabilityReportingDirectivegloballyandinnovatetoemergeascrediblehikesof70percent,raisingthepriceofpanels.83(CSRD)wentintoeffect.TheCSRDrequiresaboutalternatesupplychainhubsforcleanenergy.0650,000companiestoreportinformationabouttheSupplychainrisksalsoincludethesocialimpactsthatenvironmentalimpactsoftheiroperations,includingAnveshaThakkerBarrierresultfromtheextractionofcriticalmineralsvitaltothesupplychain,humanrights,diversity,andotherPartner&NationalLead—CleanEnergyenergytransition.Forexample,the2022bookCobaltsocialmetrics.86TheEUalsorecentlyrolledoutaKPMGinIndia07ReddetailedchildlaborandwhatmanyobserversnewBatteryDirectiveaimedataddressinghumanhavedescribedas“modernslavery”inminingtherightsandloweringtheenvironmentalimpactoftheBarriercobaltneededforlithium-ionbatteriesusedinEVsproductionofbatteries.870882InternationalEnergyAgency(IEA),“Renewables2022:AnalysisandForecastto2027,”202383Bloomberg,“GlassShortageThreatensSolarPanelsNeededforClimateFix,”2020Barrier84St.Martin’sPress,“CobaltRed:HowtheBloodoftheCongoPowersOurLives,”202285NaturalResourcesDefenseCouncil(NRDC),“LithiumMiningIsLeavingChile’sIndigenousCommunitiesHighandDry(Literally),”20220986EuropeanCommissionBusiness,Economy,Euro,“Corporatesustainabilityreporting,”202387EuropeanCommission:Energy,ClimateChange,Environment,“Batteries,”2023Barrier41Turningthetideinscalingrenewables10©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.RecommendationstoovercomesupplychainissuesDiversity,technologyimprovements,andtransparencycanovercomechallengesBarrierTherenewableenergyindustryhasanopportunitytothinkexpansivelyandactdecisivelytoovercomesupplychainchallengesproactively.KPMGprofessionals’01recommendationsinclude:Barrier1.Diversify,diversify,diversify.2.023.Relianceonafewcountriestoproducerenewableequipmentthreatensthelarge-scaledeploymentofcleanBarrierenergytheworldneeds.Today,thereareonly15gigawattsofsolarmodulecapacityoutsideChina.88Policies03seektobringproductioncapacityclosertodemand.ButmuchmorecanbedonetoscaleanddiversifyBarriermanufacturing.Somenationshaveconsideredmobilizinglow-costfinancingtoaidmanufacturingcapacityin04specificdevelopingregions.89AfocusonproducingnecessaryauxiliaryequipmentcanaccompanycapacityBarrierexpansionsofsolar,wind,andbatterystoragetechnologies.Individualnationscanalsotakeadvantageof05inherentadvantagestheyholdacrossspecificpartsofthesupplychain.BarrierAvoidtechnologyobsolescence.KPMGrecommendationstoproactivelyovercomesupply06Itisthenatureofrapidtechnologyinnovationthattheequipmentinrenewableenergymanufacturingchainchallenges:facilitiesbecomesoutdatedquickly.Factoriesthatlackdigitalization,automation,andotheradvancesareBarrieratadistinctdisadvantageagainstcompetitorsandcan’tdrivethecostimprovementsthatencouragerapid07renewableadoption.Insomesectors,financialinstrumentsarebeingconsideredtohelpmanufacturers1.Diversify,diversify,diversifyaddresstechnologyobsolescencechallenges,pairedwithcapacity-buildingefforts.AlternatematerialsBarrierresearchanddevelopment(R&D)andinitiativestoimprovethedevelopmentoflow-costmanufacturing2.Avoidtechnologyobsolescence08facilitiesthatpromisefasterpaybackscanalsospurcapacityexpansion.BarrierEnsureaskilledworkforce.3.Ensureaskilledworkforce09In2022,theglobalrenewableenergyindustryemployednearly13millionpeople.By2030,thenumberof4.Committotransparencypeoplewithjobsinrenewablescouldreach38million.90Insomenations,alargepercentageofthejobsBarrierareinmanufacturing.Forexample,1.6millionofthe2.7millionjobsinChina’ssolarindustryareinthe10productionofproductslikepolysiliconandsolarcellsandmodules.Today,agapexistsbetweenthedemandforworkersneededtomanufactureandinstallrenewablesandtheavailabletalentpool.Thismakesattractingandretainingworkersmoreexpensive,makingrenewablespricier.Tohelpensureanampleandskilledworkforce,nationscandomoretosupporttechnicaltrainingcourses,apprenticeships,andothereducationalresources.Theseeffortsmustalsoemphasizegenderandsocialinclusiontofosterdiversityinthinking,approach,andaninclusiveandjustenergytransition.4.Commitmenttotransparency.Traceabilityandtransparencyarevitaltoavoidingsupplychain-relatedenvironmentalandhumanrightsabuses.Alsosignificantisthemorewidespreadadoptionofsustainableproduction,includinggreateruseofrenewableenergytopowermanufacturingandagreaterembraceofcirculareconomypracticestoreducewaste.Already,somenewgloballegislationrequirescompaniestobeabletotracethesupplyofthefinishedequipmentusedforrenewableprojectsbacktoindividualminesites.Somerenewablecompaniesworkdirectlywithminingsupplierstoobtainanddocumentassurancesthattheirenvironmentalandsocialpracticesmeetlegalstandards.Thisalsoaddressescustomerconcernsandincreasesdemandforcleanenergyproducts.AdherencetoreportingrequirementslikethosedevelopedbyTNFD,theTaskForceonClimate-RelatedFinancialDisclosures(TFCD),andtheInternationalSustainabilityStandardsBoard(ISSB)canalsobuildconsumerandinvestorconfidence.88RenewableEnergyWorld,“NewtoolshowcasessolarmanufacturingoutsideofChina,“202289WorldEconomicForum,“Thesedevelopingcountriesareleadingthewayonrenewableenergy,“202290InternationalRenewableEnergyAgency(IRENA),“RenewableEnergyandJobsAnnualReview2022,”202242Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.BarrierBarrier0701CriticalrawBarriermaterials0243TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.03Barrier04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier10Itseemscounterintuitive,buttriplingthescaleofTheIEArecentlyreportedBarrierrenewabledeploymentsdependsonthesuccessofthatthemarketfortheoneoftheworld’smostextractiveindustries:mining.materialsrequiredforthe01Anextensiveanalysisfoundthatthevolumeofsolarenergytransitiondoubledpanels,windturbines,energystoragesystems,andoverthepastfiveyears,Barrierothercleanenergytechnologiesthatneedtoberapidlyandinvestmentsincriticalmanufacturedandinstalleddemandsanunprecedentedmineraldevelopment02supplyofrawmaterials,likecopper,lithium,cobalt,increasedbynickel,andgraphite.BarrierTheyareindispensabletoalow-carboneconomy,and30%asaresult,demandforthemisestimatedtoincrease03four-foldby2040.Demandfortherawmaterialsneededin2022alone.tomanufacturecleanenergytechnologiesissoaring.BarrierTheIEArecentlyreportedthatthemarketfortheOneoftheencouragingpointsaboutsourcingthesupplyofcriticalmineralsisthat,byandlarge,wematerialsrequiredfortheenergytransitiondoubledoverknowwheretheyexistaroundtheplanet.Globalskillsandtechniquesarealsolargelyavailableto04thepastfiveyears,andinvestmentsincriticalmineralextractthem.Thedifficultyisintheglobalcollaborationofeffortneededtobringthemtomarketindevelopmentincreasedby30percentin2022alone.91anaffordablemanner.Increasingly,weseegovernmentsestablishfundswiththeexpresspurposeofBarrierWedonot,however,havethecurrentcapacitytomeetacceleratingdevelopments.thisdemandandmustscaleupproduction,exploreTrevorHart05alternativesupplychainsandlookatwaystheycanstayGlobalMiningLeader,inlifeforlonger.KPMGInternationalBarrierForexample,thequantityofcopperrequiredtoreplacetheglobalfleetof1.4billioninternalcombustion06vehicleswithEVsfaroutstripsthetotalamounteverproduced.TheavailabilityofothermetalsandmaterialsBarrierisequallydire,particularlywithintheshorttimeframeinwhichmanyrenewableprojectsneedtobecompleted.0791InternationalEnergyAgency(IEA),“CriticalMineralsMarketReviewBarrier2023,”202308Barrier09Barrier1044Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.ThecomplexlandscapeofrawGlobalshareofmineralproductionandreservesatendof2022materialacquisition3%4%2%5%3%7%17%BarrierAvailablequantitiesofrawmaterialsandthecapacityCanadaUkraineIndiaRussianFederationofminingcompaniestoextractthemarenottheonly01challenges.Geopoliticalandsupplychainrisksalso4%2%25%2%9%15%35%abound.USTurkeyChinaBarrierAustralia,Chile,China,theDemocraticRepublicof1%3%02Congo,andSouthAfricaallholddominantpositionsMexicoPhilippinesinminingmaterialslikelithium,copper,graphite,Barriernickel,platinum,iridium,andrareearthminerals.926%1%ChinadominatestheEVbatterysupplychainand,CubaPapua03toalesserextent,theproductionofsolarpanels.93ANewGuineafewcountrieshavethebulkofcriticalmaterialsand40%1%7%BarriertheprocessingcapacitytotransformthemintocleanChileMadagascar1%energyproducts.NewCaledonia0412%47%7%SupplychainchallengesmayarisewhenafewnationsArgentinaDRCongoMozambique18%27%3%BarrierpredominantlycontrolrawmaterialsandprocessingAustraliacapacity.Tradedisputeslikethetariffsimposedonsolar1%21%17%3%1%05panels,conflictslikeRussia’sinvasionofUkraine,andBrazilZambiaZimbabwetheincreasingfrequencyofextremeweathereventsBarriercanallreduceorcutoffsuppliesofthematerialsandCobaltLithiumNaturalGraphiteRareEarthmetalsproductsneededtoadequatelyscalerenewables.06OtherapproachesbeyondminingshouldalsobeexploredBarriertosecuresufficientsuppliesofcriticalmaterials.Forexample,recyclingexistingmaterialsforreuseholdslong-07termpromiseforexpandingthevolumeneededtoscalerenewablesadequatelyandreducingthegreenhouseBarriergasemissionsproducedbyextractingvirginminerals.Unfortunately,theabilitytorecyclemetalsislimitedto08over40percentforaluminumandcopperandaslittleas0.5percentforlithium.94BarrierSource:EnergyInstitute,inassociationwithKPMGInternationalandKearney.“2023StatisticalReviewofWorldEnergy.”2023.0992InternationalRenewableEnergyAgency(IRENA),“GeopoliticsoftheEnergyTransition:CriticalMaterials,”2023Barrier93RockyMountainInstitute(RMI),“TheEVBatterySupplyChainExplained,”202394InternationalEnergyAgency(IEA),“End-of-liferecyclingratesforselectedmetals,”1045Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Globalshareofmineralproductionandreservesatendof20223%3%4%<1%BarrierPortugalCanadaRussianFederation2%US9%01ChinaChinaBarrier6%<1%3%1%02CubaMoroccoBrazilPhilippinesBarrier<1%47%1%SouthAfricaDRCongo03Papua40%Cobalt25%NewGuineaChileBarrier100%Turkey1%Lithium04<1%Madagascar100%12%1%27%Canada18%ArgentinaZimbabweAustraliaBarrier2%3%Australia1%US05ZambiaNewCaledoniaBarrier4%2%7%5%17%06UkraineIndiaRussianFederationIndiaRussianFederationBarrier<1%15%35%NorwayChinaChina07<1%1%SriLanka<1%BarrierMexicoThailand7%0821%Madagascar17%<1%BrazilBrazilMadagascarBarrier7%Mozambique3%09AustraliaBarrierNaturalGraphiteRareEarthmetals100%100%10Note:‘Restoftheworld’accountsfortheremaining10%ofrecordedreservesacrossothergeographies.Source:EnergyInstitute,inassociationwithKPMGInternationalandKearney.“2023StatisticalReviewofWorldEnergy.”2023.46Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.MiningcompaniesareoptimisticpercentofexecutivesreportedhighconfidencethatKPMGInternationalrecentlyBarrieraboutsupplybutwilllikelybetheirindustrycanmeettheincreaseddemandforsurveyedover400C-levelexecutivesconstrainedbyfiniteresourcesenergytransitionmaterials,whileonly7percentwererepresentingvariousminingandmetal01notconfident.Thatdecreaseswhenthequestionisproductioncompanies.Investmentsandnewformsofcollaborationarelimitedtoexecutivesinthebusinessofminingnet-Barrierflowingintoexpandingminingcapacity.Forexample,zero-specificmaterials,likelithiumandcopper.ButbyNearlyCanadahasreservesofmineralsneededintheenergyaratioof6-to-1,theminingexecutivessurveyedby02transition,includingcobalt,graphite,lithium,andKPMGInternationalwereconfidenttheycoulddeliver.80%nickel,andvariousstrategies,includingexploration,Barriermining,andrecycling,arebeingconsideredtooptimizeOnereasontheindustryhassomuchconfidenceinofexecutivesreportedhighconfidencethesereserves.95There’sagrowingemphasisonitsabilitytoservetheneedsofaquicklyexpandingthattheirindustrycanmeetthe03supportingresearchandimprovingthecriticalmineralsrenewablesindustryisbecauseoftechnologicalincreaseddemandforenergytransitionsupplychain.96innovations.Notonlyareminingcompaniesleaningmaterials,whileBarrierheavilyonnewtechnologiestoreducethecarbonNevertheless,companiesthatextractcriticalmineralsfootprintoftheiroperations,buttheyalsoviewonly04fromthegroundacknowledgetheyarefarfromreliablyinnovativetechnologieslikeartificialintelligencedeliveringthematerialsneededtoproduceenough(AI),dataanalytics,5Gnetworks,andIoTaskeyto7%Barriersolarpanels,windturbines,andbatteries.increasingmineralsuppliesoverthenextfiveyears.werenot05KPMGInternationalrecentlysurveyedover400Whilethelong-termoptimismofminingindustryconfident.C-levelexecutivesrepresentingvariousminingandleadersisencouraging,itshouldbetemperedbytheBarriermetalproductioncompanies.97Amanagingdirectoreventuallimitsoffiniteresources.ThismaynotposeanandchiefexecutiveofficerofoneAustralianminingimmediatechallengeinsignificantlyscalingrenewables.06firmtoldKPMGthatheexpectedthatsuppliesoftheButeventually,innovationwillneedtoovercomethedysprosiumandterbiumhiscompanyminesforuserealityofalimitedsupplyofrawmaterials.BarrierinEVswon’tbesufficientintheshort-term.“TheexpectationiswidelyacknowledgedintheindustryForexample,accordingtoKPMGInternational07thatthereisgoingtobeashortfallinglobalsupplyintoanalysis,itwouldtakenearly10,000yearstoproducetheearly2030s,though,andwe’llbelookingtomeettheamountoflithiumrequiredtophaseoutfossilfuelsBarriersomeofthatshortfall,”hesaid.at2019productionlevels.Similarly,dauntinggapsbetweencurrentproductioncapacityandthecritical08Overthelongerterm,however,theminingexecutivesmetalsneededtodrivetheenergytransitionexistsurveyedbyKPMGareanythingbutdowncastaboutforcobalt,graphite,nickel,andothermetals.UnlessBarriertheirindustry’sabilitytoprovidetherawmaterialsthischallengeisaddressedquickly,itwillimpactneededtobuildacarbon-freeworld.Nearly80commoditypricesanddelaytheenergytransitionas09EVsandrenewableassetsarebuiltatscale.Barrier95GovernmentofCanada,“TheCanadianCriticalMineralsStrategy,”202296S&PGlobal,“Canadaboostscriticalmineralsprojectswithlatestinvestments,”20231097KPMG.“2023GlobalMiningandMetalsOutlook,”2023.https://kpmg.com/xx/en/home/insights/2023/05/2023-global-mining-and-metals-outlook.html47Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.TherearealreadyindicationsofloomingmaterialSustainableapproachestohelpBarrierbottlenecks.InAustralia,forexample,EVcompaniesensuretheavailabilityofrawarestartingtoinvestinminingprojects,especiallymaterialstosupporttheenergy01thosethatincludebatteryandelectricmotortransition:components.ThismovetowardsverticalintegrationBarrierisbeingdrivenbyarecognitionthataccesstocriticalDevelopsupplychainsandmineralsisarisktocompanygrowth.businessmodelsacircular02economyneedsOtherchallengestotheexpandedproductioncapacityBarrierofcriticalmineralsincludetheamountoftimerequiredDesignproductstolasttoapproveprojectsandinconsistentgovernmentlongerandberecycledand03supportforadditionalcapacity.IncreasingthereusedproductioncapacityforcriticalmineralsfaceshurdlesBarriersuchastime-intensiveprojectapprovalsanddifferingTakeadvantageoflevelsofgovernmentincentivesacrosscountries.existingcirculareconomy04frameworksandresourcesForexample,accordingtoKPMGBarrierInternationalanalysis,itwouldInvestineverythingtakenearly10,000yearsto05producetheamountoflithiumrequiredtophaseoutfossilBarrierfuelsat2019productionlevels.06Barrier07Barrier08Barrier09Barrier1048Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.AmoresustainableapproachtocriticalmineralproductionInvestinacirculareconomyandnewproductionBarrierBeyondinnovationsandimprovementsinminingoperationstoincreaseproduction,othersolutionscanhelpensurethattheenergytransitionhastherawmaterialsitrequires.01Oneistomoveawayfromthetraditionalmake-take-disposemodelinwhichnaturalresourcesareturnedintoproductsthatareusedonceandthenthrownaway.Amoresustainableapproachwouldincludethefollowing:Barrier1.Developsupplychainsandbusinessmodelsacirculareconomyneeds.02Thebenefitsofacirculareconomyaremany.Amoreambitiousmovetowardscirculareconomieswhereproductsaredesignedtobereused,recycled,andBarrierrepurposedcanreducepressureoncommoditypricesandsupplieswhilealsogeneratingrevenueacrosssupplychainsthatdon’trequirenewrawmaterials.03Forexample,theUSNationalRenewableEnergyLaboratory(NREL)estimatesthatthetotalvalueofrecyclablematerialsinsolarpanelswillbeapproximatelyBarrierUSD15billionby2050.It’senoughrawmaterialtomanufactureabout2billionnewsolarmodulesorabout630gigawattsofnewcapacity.98Forthistobepossible,entirelynewsupplychainsandbusinessmodelswillneedtoemergededicatedtoprofitablykeepinglimitednaturalresourcesandmaterialsincirculation04foraslongaspossiblewithoutproducingfurtherwaste.Barrier2.CommittoJustEnergyTransitionPractices.05Miningtheresourcesneededfortheenergytransitionisalreadyhavinganimpactonnatureandbiodiversityaswellasthecommunitiesthatlivenearminingoperations(seenatureandbiodiversity,supplychainissues,andsociallicensetooperatechapters).RenewableenergycompaniescanconsiderensuringthatBarriertheirsuppliesofnecessaryresourceswon’tharmcommunities—whichareoftenIndigenouscommunities—theenvironmentcommunitiesdependonorinvolvetheuseofchildlabor.ItwouldbeidealforpledgestoactinaccordancewithJustEnergyTransitionprinciplestobeeasilyverifiable.063.Designproductstolastlongerandberecycledandreused.BarrierOtherwaystoeasethedemandforrawmaterialstosupporttheenergytransitionincludedesigningproductstolastlongerandmakingiteasyandaffordableto07repairandrefurbishproductstoextendtheirproductivelifetimes.Productscanalsobedesignedtomakerecyclingandreusetheirmostvaluablecomponentslessexpensive.Forinstance,EVbatterymodulesrequireamulti-stepandlabor-intensivedisassemblyandsortingprocessbeforerecycling.AlackofstandardBarriersizedEVsandstationarystoragebatterypacksandmodulesalsodiscouragesrecyclingandreuse.Astandardizedbatterymoduleandpacksizecouldsimplifyandincentivizerecyclingandreusebyallowingforgreaterautomationandimprovedeconomics.EVbatteryrecyclingisinitsinfancy.TheFrenchgovernmentrecently08investedoverUSD40milliontosupportanEVbatteryrecyclingeffortaimedatyielding50tonsannuallyoflithium,cobalt,manganese,nickel,andothermetalsfromend-of-lifebatteries.99Barrier98NationalRenewableEnergyLaboratory(NREL),“EnvironmentalandCircularEconomyofSolarEnergyinaDecarbonizedUSGrid,”20220999InnovationNewsNetwork,MECAWAREsecures€40minvestmentforEVbatteryrecyclingproject,2023Barrier49Turningthetideinscalingrenewables10©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.4.Takeadvantageofexistingcirculareconomyframeworksandresources.Barrier5.EU,100theOrganizationforEconomicCooperationandDevelopment(OECD),101andtheElectricPowerResearchInstitute(EPRI)102havealldevelopedframeworks,01plans,andmetricsforenhancingcirculareconomies.Butrampingupcircularmodelsinareaslikemetalproductionwilltakedecadesandrequiremoresignificantinvestmentandglobalcollaboration.It’sworkthatisworththeeffortandshouldtakeplacealongsidecollaborativeinitiativestosupportincreasedproductionofBarrierrawmaterials.02Investineverything.BarrierSupplyingenoughrawmaterialstospurarapidbuildoutofrenewablesisnotachoicebetweenrecyclingandnewproduction.Itdemandsboth.Acceleratingprogressinbothdomainsisachallengetherenewableenergyindustry—andsocietyatlarge—shouldnolongerignore.03100EuropeanUnion(EU),“Circulareconomyactionplan,”2020Barrier101TheOrganisationforEconomicCo-operationandDevelopment(OECD),“TheOECDInventoryofCircularEconomyIndicators,”2021102ElectricPowerResearchInstitute(EPRI),“AFrameworkfortheApplicationofGlobalCircularEconomyPrinciplesfortheElectricPowerIndustry,”20210450TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.05Barrier06Barrier07Barrier08Barrier09Barrier10BarrierBarrier0801NatureandBarrierbiodiversity0251TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.03Barrier04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier10ClimatechangehassignificanteffectsonnatureandAgrowinglistoftoolsforAccordingtotheBarrierbiodiversity.WarmerairandseatemperaturesdegraderenewabledevelopmentinUnitedNations(UN),vitalecosystemslikecoralreefs,forceshiftswhereharmonywithnature01plantsandanimalscansurvive,andcontributetorapidlyanincreaseinaverageglobalacceleratingspeciesextinction.ClimatechangealsoFortunately,thereisawidespreadacknowledgmenttemperaturesof1.5degreesBarrierfuelsextremeweatherlikedroughtsandwildfiresoftheimportanceofpreservingbiodiversitytotackleCelsiuswillresultinthatdestroyforestsandothercriticalhabitat.Asclimatechangeandagrowingmenuofoptionsfor02temperaturesrise,researchindicatesthattheimpactsscalingrenewablesinwaysthatminimizetheimpact4%ofmammalsonnatureandbiodiversitycouldintensify.Accordingtoonthenaturalworld.InDecemberof2022,188losinghalftheirBarriertheUnitedNations(UN),anincreaseinaverageglobalcountriesadoptedtheKunming-MontrealGlobalhabitattemperaturesof1.5degreesCelsiuswillresultin4BiodiversityFramework(GBF),whichaimstoprotect03percentofmammalslosinghalftheirhabitat;ariseof330percentoftheworld’sland,oceans,coastalareas,ariseof3degreesCelsiusdegreesCelsiuscouldleadto41percentlosinghalfofandinlandwaters.105Twooftheframework’stargetscouldleadtoBarriertheirhabitat.103areespeciallyrelevanttorenewablesdevelopment,includingatargetaroundtheimportanceofensuring41%04Scalinguprenewablescouldhelpinmitigatingsometheintegrationofbiodiversity’svalueintoplanningandoftheeffectsofclimatechangeonthenaturalworld,developmentandatargetthatrequestsbusinessesBarrierwhichiscloselylinkedtohumanwell-beingandtoassessmeasurestomonitoranddisclosetheireconomicprosperity.Whileit’simportanttoconsiderbiodiversitydependencies,impactsandrisksand05thedeploymentofrenewables,it’salsoessentialtoreducetheirnegativeimpact.106Nearly60percentacknowledgethatcleanenergydevelopmentcanofrenewableenergystakeholderssurveyedagreedBarriersometimesnegativelyimpactnatureandbiodiversitythataddressingcleanenergyprojects’natureandandevenbecounterproductiveinlimitingwarming.Forbiodiversityimpactsisnecessarytoscalerenewables.06example,conservingandrestoringforests,peatlands,andothernaturalresourcesthatsequestercarbonBarrieremissionscouldachieveone-thirdofthecarbonemissionsreductionsneededinthenextdecade.10407Clearinglargetractsofforestsandotherclimate-supportingecosystemstobuildsolarandwindpowerBarrierplantscanharmnatureandbiodiversitywhiledoinglittletoreducegreenhousegasemissions.08103UnitedNations,“Biodiversity—ourstrongestnaturaldefenseagainstclimatechange,”2022,un.org/en/climatechange/science/climate-issues/biodiversity,losinghalfofBarrierAccessed20Oct.2023theirhabitat.09104UnitedNationsEnvironmentProgramme,“NatureforClimateAction,”2021105ConventiononBiologicalDiversity,“NationsAdoptFourGoals,23Targetsfor2030InLandmarkUNBiodiversityAgreement,”2022Barrier106Kunming-MontrealGlobalBiodiversityFramework,“2030Targets(WithGuidanceNotes),”20231052Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Variousstakeholders,includingrenewableenergyCollaborationdriveslow-impactoffshorewindgasemissions.SmartsitingofsolarprojectscanBarrierdevelopers,canleverageinsightsandguidancefromdevelopment.Scalingoffshorewindisacriticaltoolmaximizetheclimatebenefitsofsolarwhileminimizingsolutionsbeingimplementedaroundtheworldthatincombattingclimatechange.Attheendof2022,negativeimpactsonnature.IntheUnitedStates,one01demonstratehowrenewablescanscaleinharmonytherewereabout59GWofoperatingwindcapacityenvironmentalorganizationdevelopedaframeworkwithwithnatureandbiodiversity.Forexample:aroundtheglobeandanadditional427GWinthesixprinciplestoguidesolarsitinganddesigntoreduceBarrierdevelopmentpipeline.109impactsonnature,includingavoidingareasofhighWinddevelopmentinconcertwithmigratingbirds.nativebiodiversity,preferencingtheuseofdegraded02MillionsofbirdsjourneytoandfrombreedinggroundsThedevelopmentofsuchalargevolumeofoffshorelands,protectingwaterqualityandavoidingerosion.112inEuropeandCentralAsiaandtheirwinteringhomeswindhasthepotentialtoimpactbirdsandmarineBarrierinAfricaeachyear.Theirroutetakesthebirdsalongecosystemsnegatively.ThedesiretomitigateorNearlytheRedSeaandRiftValley,anareathathasattractedeliminateharmtonatureandbiodiversityspawnedthe03significantinterestfromwindenergydevelopers.creationoftheOffshoreCoalitionforEnergyandNature,60%WhenwindturbinesareconstructedinthepathwayoforOCEaN.ThegroupismadeupofenvironmentalBarriermigratingbirds,thereisthepotentialfordeathandinjuryNGOs,windenergydevelopers,andtransmissionofrenewableenergystakeholdersfromcollisions,displacement,andfragmentationofsystemsoperators(TSOs)andwasestablishedasasurveyedagreedthataddressing04criticalhabitats.TheMigratorySoaringBirdsProjectisforumforsharinginformationandexperienceinplanningcleanenergyprojects’natureandacollaborationbetweentheNGOBirdLifeInternational,anddevelopingoffshorewindinamannerthatprotectsbiodiversityimpactsisnecessarytoBarriertheGlobalEnvironmentFacility(GEF),andtheUnitednatureandbiodiversityandidentifiestopicsinneedscalerenewables.NationsDevelopmentProgramme(UNDP)thatseeksofadditionalresearch.110Thegroupmaintainsapublic05toreducethenegativeimpactsonbirdsfollowingthisdatabaseofresearchandbestpracticestopromotecriticalflywayduetonotonlywinddevelopmentbutnature-friendlyoffshoredevelopment.OCEaNalsoBarrieralsohunting,agriculture,andtourism.107sharesinsightsfrommembersliketheWorldWildlifeFund(WWF),includingWWFguidanceonapplying06Theprojectproducedguidanceforgovernments,spatialplanning—ascience-basedplanningapproachwinddevelopers,andotherstakeholdersaboutthethatconsidersalleconomicandecologicalfactors—inBarrierimportanceofsitingwindfarmsinlocationsthataren’tsitingoffshorewind.111alongroutesheavilytraffickedbymigratingbirds.07TheprojectalsodevelopedguidanceontheuseofInnovationandwildlife-friendlydesignbolstershutdown-on-demand,whereturbinesstopspinningsolarandnature.Utility-scalesolarprojectsrequireBarrierwhenbirdsareeithersightedonradarorcamerasoralotofland.Whendevelopinglargesolarpowerduringseasonsandweatherconditionswhenbirdshaveplantsnecessitatesclearingforestlandordisrupting08beenactiveinthepast.108delicateecosystems,theresultcanbeharmfultonatureandcounterproductiveinreducinggreenhouseBarrier107GlobalEnvironmentFacility(GEF),“GoodPracticeBrief:StrengtheningRegionalCooperationtoMainstreamMigratorySoaringBirdsSafeguards,”202209108BirdLifeInternational,“Reviewandguidanceonuseof“shutdown-on-demand”forwindturbinestoconservemigratorysoaringbirdsintheRiftValley/RedSeaFlyway,”2023109USDepartmentofEnergy,OfficeofEnergyEfficiency&RenewableEnergy,“OffshoreWindMarketReport:2023Edition,U.S,“2023Barrier110OffshoreCoalitionforEnergyandNature,“Whoweare,”https://offshore-coalition.eu/who-we-areAccessed25Sept.2023111WorldWildlifeFund(WWF),“Ecosystem-basedMaritimeSpatialPlanninginEuropeandhowtoassessit,”March202110112TheNatureConservancy,“MakingSolarWildlife-Friendly,”202353Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.ThegroupalsoworkscloselywithstateregulatorsandNatureandclimatechangearetwoofthebiggestinterlinkedchallengesthattheplanetfaces.Barriersolardeveloperstolocateprojectsonlandsthataren’tRenewableshaveaclearroletoplayintermsoflimitingglobaltemperaturesandtherebytacklingcriticaltobiodiversity.oneofthekeydriversofnatureandbiodiversitydeclines.Upfrontplanningtohelpensurethatnature01andbiodiversityconsiderationsareproperlybuiltintonewrenewablesprojects,aswellasfocusingThereareanincreasingnumberofexamplesofsolarspecificallyonrenewabletechnologiesthatofferwin-winsolutionsforclimatechangeandnatureBarrierprojectsimprovingbiodiversity.InKentucky,forgoals,areourtwokeyrecommendationsforhelpingensurethatwemeetbothnaturepositiveandexample,grazingsheepcancost-effectivelymanagenetzerogoals.02vegetationaroundsolarpanelsthatwouldotherwiseneedtobemowedbyutilityworkersorcontractors.SarahNelsonBarrierBesidesbeingeffectiveweedeaters,sheepfollowingNature&BiodiversityLead,asustainablegrazingplanreducewaterrunoffandKPMGInternational03bolstersoilhealth,whichenhancesbiodiversity.113AttheFrankfurtairportinGermany,anovelsolarBarrierprojectdesignapproachaimstoeliminatenegativebiodiversityimpacts.Developersmountedthepanels04verticallyinsteadofhorizontallyorslightlytiltedinrelationtotheground.ThiswasdoneintentionallytoBarrierallowprecipitationtoreachvegetationontheground.11405Stepstoprotectnatureandscalerenewables:Barrier1.Prioritizenatureandbiodiversityat06thebeginningofprojectsBarrier2.Publiclydeclareacommitmenttonatureandbiodiversity07113ElectricPowerResearchInstitute(EPRI),“SolarSheep,”2023Barrier114PVMagazine,“VerticalPVtoprotectbiodiversityatGermanairport,“20220854TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.09Barrier10StepstoprotectnatureandbiodiversityandscalerenewablesThenaturalworldplaysacrucialrole,andathoughtfulenergytransitioncanbenefitboththeenvironmentandthepeople.However,deployingrenewablesinwaysthatprotectBarriernatureandfullyleverageitscarbon-sequesteringpotentialtakesthoughtfulplanningandcollaboration.Aswehaveseeninthischapter,thereisabundantknowledgeandagrowinglistoftoolstoenablerapidrenewabledevelopmentandconservationtoprogressinharmony.Tomakethemostofexistingknowledgeandresources,it’srecommendedto:011.Considernatureandbiodiversityatthebeginningofprojects.BarrierTheoptimaltimetoseektheinputofnatureandbiodiversityexpertsiswhensolarandwindprojectsareintheirinfancy.Earlycollaborationcantranslateinto02siteselectionthatreducesoreliminatesnegativeimpactsandpositionsaprojecttoavoidtime-consumingdelaysduetooppositionfromregulatorsorthepublic.BarrierCollaboratingearlywithbiodiversityandnatureexpertscanalsouncoveropportunitiesforrenewableprojectstobenefitthenaturalworld.03Beingproactiveaboutbiodiversityandnaturecanalsopositionrenewabledeveloperstonavigatecallsforgreaterdisclosure.Atagloballevel,theTaskforceonBarrierNature-relatedFinancialDisclosures(TNFD)includesgovernmentsandbusinessesrecognizingthatnaturemustbeafactorinfinancialandbusinessdecisions.TNFDisdevelopingaframeworkforcompaniesandorganizationstoreportonnature-relatedrisksandimpactsandidentifyopportunitiestodrivenature-positive04outcomes.115Barrier2.Organizationscouldconsidermakingtheircommitmenttonatureandbiodiversityknown.05Limitingoreliminatingnegativeimpactsonnatureandbiodiversityshouldbecentraltohowrenewablecompaniesdobusiness.PubliclyannouncingtheprotectionofnatureasanobjectiveandquantifyingwhatthatmeansholdscompaniesaccountablefortheirprogressandallowssuccessfulcompaniestoBarrierdifferentiatefromcompetitors.Thisisalreadyhappening.TheSpanishrenewableenergydeveloperIberdrolacommittedthatallitsfutureprojectswillhaveanet-positiveeffectonbiodiversityby2030andenteredastrategicalliancewithBirdLifetoinformitsdecisionsbetter.11606115TaskforceonNature-relatedFinancialDisclosures(TNFD),“TheTNFDNature-relatedRiskandOpportunityandDisclosureFrameworkbetav0.4,”2023Barrier116CarbonPulse,“Iberdrolacommitstonetpositiveimpactonnatureby2030,”20220755TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.08Barrier09Barrier10BarrierBarrier0901SocialBarrierlicensetooperate0256TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.03Barrier04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier10Whilemanyexpertsandstudieslaudtheback.PushbackcanbefiercewhencommunitiesdoIntheUS,researchersfromBarrierenvironmental,health,andfinancialbenefitsofscalingnothaveopportunitiestomeaningfullyco-createwhattheMassachusettsInstituteofrenewableenergy,fewdigdeeperintothesocio-asustainablefuturewilllooklike.ThisisespeciallytrueTechnology(MIT)trackedsignificant01culturalimpacts.Overlookingordismissingimpactswhentheyperceivethatprojectsarebeingimposedpublicoppositiontorenewableonland,acommunity’straditionalwayoflife,andtheonthembyoutsiders.Newwind,solar,transmission,projects.TheyfoundnearlyBarriersenseofpowerlessnessthatsomefeelwhentheyandothercleanenergyprojectsareencounteringfiercehavenosayaboutthecleanenergyprojectsbuiltnearopposition,resultingindelaysoroutrightcancellations.300stalledorstopped02theirhomesandbusinessesmayslowthevitalpaceIntheUS,researchersfromtheMassachusettsInstituteandscaleofrenewabledevelopmentandnegativelyofTechnology(MIT)trackedsignificantpublicoppositionintheUSbetween2008and2021.Barrierimpacthumanrights.torenewableprojects.Theyfoundnearly300stalledorstoppedintheUSbetween2008and2021.11703Toenablecleanenergytobebuiltatthepacerequired,buildingasociallicensetooperate(SLO)byproactivelyCommunityengagementisoftenviewedasabarrierBarrierengagingcommunitiesiscriticaltoensuretheyreceivetorenewableenergyprojectsandasourceofprojecttheirfairshareofbenefitsandhavetheagencytorisk.However,aSLOpromisesthattheproactive04mitigateoreliminatethenegativeimpactsofrenewableandmeaningfulcommunityengagementitdrivesisdevelopment.Todothat,aSLOensuresaprocessthatanopportunitytorealizeprojectbenefits,enhanceBarriermaximizesopportunitiesforallpeople,particularlythetheoverallvalueofrenewables,andmitigateriskstomostvulnerable,andminimizesthenegativeimpactsasthoseimpacted.TheJustEnergyTransitioncanalso05weevolvetowardsalow-carbon,circular,ecologicallybeseeninalargercontext:oneaddressesquestionssustainable,andequitableeconomy.Notably,theaboutwhoultimatelypaysforprojects—taxpayersorBarrieropportunitiesandimpactsoftheenergytransitionmustenergyconsumers—andtheevenlargerdistributionalbedistributedfairlytoeveryone.questionabouthownationsshouldbalancethecostsof06theenergytransition.Thisisnotalwaysastraightforwardtask.Risks,Barrierimpacts,andopportunitiesexistonallsidesoftheAtalllevels,thisischallengingwork.It’sespeciallyenergytransition.Forexample,communitieswherechallengingonthelocallevelwhenrenewable07generationsofcitizenshaveworkedincoalmines,developmentschangeacommunity’ssenseofidentity.willbeunderstandablyanxiouswhenminescloseandUnravelingoldidentitiestomakeroomfornewonesBarrierdevelopersseektobuildrenewables.Butthereareisworkthatrequirespatienceandempathy.Thiscanalsoopportunitiesforemploymentandsustainableseemlikeanunnecessaryindulgence,giventhepace08developmentthatcanbeenhancedwhenrenewableandscaleofrenewabledeploymentneeded.However,projectsproceedwithcommunitysupport.committingtoaJustEnergyTransitionisboththeBarrierethicallycorrectapproachandabusinessimperativeOften,peoplewhofeeltheirculture,economictoacceleratedeploymenttothelevelrequiredtoreach09livelihoods,localecosystems,identities,andwayoflifenet-zerotargets.arethreatenedbyrenewableenergyprojectswillpushBarrier117EnergyPolicy,“SourcesofoppositiontorenewableenergyprojectsintheUnitedStates,”20221057Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Layingthegroundwork:PrinciplesTheplanningphaseofprojectscanalsocauseorAsociallicensetooperatecanBarrierofasociallicensetooperatecontributetoimpacts.Toavoidandmitigatethese,beframedaroundtwocriticalengagingwithcommunitiestolistenandgainadeeperobjectives:01Asociallicensetooperatecanbeframedaroundtwounderstandingoftheirpriorities,attitudes,andpastcriticalobjectives:Mitigatingoravoidinganyadverseexperienceswithenergyiscrucial.Thesecanbe1.MitigatingoravoidinganyBarriereffectsoftheshifttoadecarbonizedenergysystemcomplicatedtountangle.Theenvironmentaljusticeadverseeffectsoftheshifttoaandworkingtomakesurethebenefitsoftheenergymovementwasbornfromtheunderstandingthatdecarbonizedenergysystem.02transitionaremaximizedandequitablydistributed.traditionallyunderservedcommunitieshavehadtoenduremostofthenegativeconsequencesoffossilfuel2.WorkingtomakesuretheBarrierTosuccessfullynavigatethesocialrisksanddevelopment.TheUSIRAcreatedanEnvironmentalbenefitsoftheenergytransitionopportunitiesoftheenergytransition,ithelpstoJusticeandClimateJusticeProgramtoensure,asonearemaximizedandequitably03understandthattheyexistthroughouttheentireofitsgoals,thatunderservedcommunitiesreceivetheirdistributed.lifecycleofallprojects—fromprocurementoffairshareofthebenefitsoftheenergytransition.118Barrierequipmenttoinitialplanninganddevelopmenttoconstructionthroughoperationsandend-of-life.ThereThisinitialprojectplanningphasecanuncover04areopportunitiestobuildtrustandengagementineachviewsthatcanbebarriersorcatalystsforscalingupofthesephases.Still,therearealsorisksofmisstepsrenewables.Forexample,communitiesthathavelongBarrierthatcanhardenoppositionandpotentiallyincreasethereliedonfossilfuelextractionandgenerationasariskofharmtoindividualsandcommunities.sourceofemploymentandrevenuemayworryabout05theimpactofrenewablesonlivelihoodsandservicesForexample,theprocurementphaseofrenewableprovidedtocommunities.Barrierenergytechnologiesincludespotentialsocialimpactsfromtheextractionofminerals.ThiscouldincludeEvenwhenthedevelopersandownersofrenewable06theuseofchildlabortominecobaltandimpacttheprojectsproactivelysolicitcommunityinputandrightsofIndigenouscommunitiesfromtheextractioncollaborationearly,therearerarelysimplesolutionsBarrieroflithiumlocatedintheirtraditionalterritory.Impactstotheseworries.Renewableenergyprojectscreatecanalsooccurintheprocessing,transporting,andthebulkoftheirjobsduringtheconstructionphase07manufacturingofrenewabletechnologies,includingandofferfarfeweremploymentopportunitiesonceallegationsofusingslavelaborinproducingsolaroperational,especiallycomparedtomining.Bycontrast,Barrierpanels.Thekeytoidentifyingandaddressingsocialcommunitiesthathavebornethebruntofpollution-risksandimpactsisalsotounderstandhowintertwinedrelatedhealthproblemsresultingfromfossilfuel08environmentalandsocialimpactsare.extractionmaybeeageradvocatestoenlisttobuildsupportandmoveprojectsforwardquickly.Barrier118USEnvironmentalProtectionAgency(EPA),“InflationReductionActEnvironmentalJusticeandClimateJusticeProgram,“epa.gov/inflation-reduction-act/inflation-reduction-act-environmental-and-climate-justice-program09Accessed10Sept.2023Barrier58Turningthetideinscalingrenewables10©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Theimperativeofearlycommunityover200allegationsofabuseagainstrenewableenergyFrankfurtworkedwithgovernmentofficialsandBarrierengagement:Lessonsfromacrosscompaniesinthepastdecade,andasignificantnumberrenewableenergydeveloperstobuildsolar,wind,theglobewerefromIndigenouscommunities.122andothercleanenergyprojectsthatroutinelyattract01executives,policymakers,andeventouristsinterestedPre-projectoutreachandengagementwithIndigenousConflictanddelayarenotinevitable.Tounderstandinlessonsaboutadoptingmorerenewables.WhatBarrierpopulationshavebeenparticularlyinadequate.Australiahowtoworkcollaborativelywithcommunities,madetherenewabledevelopmentinMorbachsoishometoalargepercentageofthecriticalmineralsconsiderthesuccessfulexampleofMorbach,successfulisthatitsdetailswereco-createdwiththe02neededfortheenergytransition,andmostoftheGermany,whererenewableenergyprojectswerecommunity,whichfounddemocraticwaystofundandreservesarelocatedonFirstNationslands.welcomed.Oncethesiteofamilitarybaseandexecuteprojects.Barriermunitionsdump,thecommunitysouthwestofIntheUS,NativeAmericantriballandsrepresent036.5percentoftheentirecountry’sutility-scaleUSSwedenrenewablepotential.IntheiranalysisofcommonBarrieroppositionsourcestorenewableprojects,MIT’sNorwayresearcherssaidthatafailuretorespecttribalrights,Germany04particularlyaroundself-determination,wasatopreasonnativecommunitiespushedbackagainstKenyaBarrierproposedrenewabledevelopments.119Australia05DeveloperswhohavefailedtoengageIndigenouscommunitiesandseekfree,prior,andinformedBarrierconsent(FPIC)haverunintoproblemsacrosstheglobe.Forexample,theHighCourtinKenyarecently06nullifiedlandtitledealsfortheLakeTurkanaWindPowerproject.ThecourtruledthatthelandwasBarrieracquiredwithoutproperconsultationorcompensationofIndigenouscommunitymembers.12007TheNorwegiangovernmentapologizedtotheBarrierIndigenousSamipeopleforthedevelopmentofwindfarmsonreindeerpastures,whichthreatenedboththe08economicwell-beingandcultureandidentityoftheSami.ThegovernmentcalledthewinddevelopmentaBarrier“humanrightsviolation.”121AccordingtotheBusiness&HumanRightsResourceCentre(BHRRC),therewere09119NationalRenewableEnergyLaboratory(NREL),“Techno-EconomicRenewableEnergyPotentialonTribalLands,”2018Barrier120Reuters,“Whysolarandwinddevelopersignoreindigenouslandclaimsattheirperil,”2023121Reuters,“NorwaywindfarmsatheartofSamiprotestviolatehumanrights,ministersays,“202310122Business&HumanRightsResourceCentre(BHRC),“RenewableEnergy&HumanRightsBenchmark,”202159Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.InSweden,tenwomenestablishedaco-operative,ManysolardevelopersusesheeptocontrolvegetationBarrierQvinnovindar,withtheaimofsupportingrenewableunderneathelevatedground-mountedsolararrays.energyandprovidingopportunitiestoruralwomen.Withpropergrazingtechniques,thesheepcanimprove01Sinceitslaunchin2007,Qvinnovidnarhasgrowntosoilqualityandmaintaintheagriculturallegacysome80membersandinvestedoverUSD1.5millionincommunitiescareabout.123Barrierwindprojects.Thoughindividualco-opmembersinvestdifferingamounts,eachhasanequalvoteinhowtheAnotherkeytoidentifyingandaddressingsocial02companyisrun.risksandimpactsisunderstandinghowintertwinedenvironmentalandsocialimpactsare.TheUnitedBarrierTheprimarylessonfrombothsuccessfulandstrugglingNationsrecentlyconfirmedthataclean,healthy,renewableprojectsisthatcommunityengagementatandsustainableenvironmentisahumanrightand03theearliestpointpossibledramaticallyimprovestheemphasizedtheconnectionbetweenhumanrightsandchancesthatcommunitieswillbecomeadvocatestheenvironment.Barrierratherthanopponents.Deliberationsaboutnewrenewableenergyprojectscan’t04Embracinginnovationandlosesightoftheimpactofclimatechangethatrenewableencouragingahealthyclimateisenergyseekstoultimatelyaddress—includingextremeBarrieressentialforthewell-beingofallweatherandbiodiversityloss—arehumanrightsissues.Leveraginguniqueexpertise,KPMGBanarra,05ThereisagrowingmenuoftoolstointegrateHumanRights&SocialImpact,collaboratedwiththecommunityprioritiesintoprojectdesignswithoutResponsibleInvestmentAssociationAustralasiatocreateBarrierslowingdownordiminishingthegenerationpotentialofaguideforinstitutionalinvestors.Thisguideenablesanrenewableprojects.Forexample,acommonrationaleinnovativeapproachtoassessingclimaterisksthrough06foropposingrenewableprojectsinruralcommunitiesthelensofhumanrights,therebyofferinginvaluableisthebeliefthattheywillnegativelyimpactagriculturalinsightsforthesociallicensetooperatestrategy.Barrierproductionor,insomecases,martheculturalaestheticsoftraditionalfarmingcommunities.07TheprimarylessonfrombothsuccessfulandstrugglingBarrierrenewableprojectsisthatcommunityengagementattheearliestpointpossibledramaticallyimprovesthechancesthat08communitieswillbecomeadvocatesratherthanopponents.Barrier123ElectricPowerResearchInstitute(EPRI),“SolarSheep,”20230960TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.10Asociallicensetooperaterequiresbenefitsofrenewableenergyprojectsreapedby•Facilitatecommunityengagement.DevelopersBarrierearlyengagementandclearnon-communitymembersandalltheimpactsborneshouldallowtheparticipationandrepresentationcommunitybenefitsbylocals.Thisincludesacommitmenttodistributiveofpeoplewithdifferentperspectivesateach01justice,whichistheconceptofequitablydistributingstageofarenewableproject’sdevelopmentandSomeoftheprinciplesoutlinedintheguidearethebenefitsofarenewableproject.construction.Forexample,beyondcommunityBarrierapplicabletosociallicense-to-operatediscussions.involvementandthroughoutdevelopment,Perhapsnoneismoreimportantthanconsidering•Proactivelymanageexpectations.Manyoperations,andend-of-life,communitiesneed02renewableenergyprojectsusingabalancedviewthatcommunities,particularlythosehometominesavoiceinreviewingprojectmilestonesandaccountsforcurrentclimate-relatedhumanrightsrisksandotherfossilfuelpowerplants,expectnewidentifyingmetricstomeasureandrespondtoBarrierandtherisksfacedbychildrentodayandthosewhoarerenewableenergydevelopmenttocreatemanyunintendednegativecommunityimpacts.Inotheryettobeborn.jobs.Whileit’struethatsignificantnumbersofwords,thesupplyofcleanenergycan’tbetheonly03workersareneededtodevelopwindandsolarsuccessmetric.Differentrenewableenergystakeholdershavevaryingplants,permanentjobsarefarlowerthaninaBarrierresponsibilitiestohelpbuildasociallicensetooperate.mine.Communitiesthatloseoilandgasjobs•Makecommunitypartnershipthegoal.Thefollowingprinciplesshouldguidetheworkofoftenaren’tinlocationswhererenewableswillNegotiatingagreementswithlocalcommunities04everyoneseekingtorapidlyscalerenewables:requireameaningfulnumberofnewworkers.canensurelocalbuy-inandsupportandremoveTheseexpectationsneedtobemanagedearly,significantbarrierstoprogress.AbestpracticeisBarrier•Ensurebenefitsareshared.It’shardlysurprisingandrenewabledevelopersandownersshouldtoco-designaprojectwithcommunitiestoprovidethatcommunitiesprotestwhentheyseealltheworkcollaborativelywithcommunitiestoexpandmaximumbenefitsandminimumimpacts.05educationalandemploymentopportunitiesasProposedactionsmuchaspossible.BarrierKeystakeholdersAction06Developers•Engageearlywithaffectedcommunities,includingconsultationonthedesignofprojectsBarrierGovernment•EngageearlywithIndigenouscommunitiestooperationalizefree,priorandinformedconsent(FPIC)Finance(providers/lenders)•Embraceanexpansiveviewofcommunitybenefits07•MitigatesupplychainrisksBarrier•Guidecompaniesonexpectationsforengagementandconsultation•Coordinateacrosssectorsforcommunityengagementinrenewableenergyzones08•FacilitatetheupliftofcommunitycapabilityandcapacityBarrier•Incorporaterisk-to-peopleconsiderationsintothefinancingoftransitionprojects•Incorporatesocialduediligenceintolendingcriteria09•IncorporatesocialcriteriaindevelopercreditriskratingsBarrier•Monitorsocialimpactsinfundedprojects1061Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.BarrierBarrier1001EmergingBarriermarkets0262TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.03Barrier04Barrier05Barrier06Barrier07Barrier08Barrier09Barrier10TheglobalaimtoaddressclimatetargetshingesonAcceleratingrenewables580millionin2019.127Inmanyemergingmarkets,Barriertheadoptionofrenewablesinemergingmarkets.acrossemergingmarketsexpandingaccesstoelectricitybyextendingthereachConsiderthis:AccordingtotheGlobalEnergyAllianceisalsoanopportunitytoofthetraditionalpowergridisprohibitivelyexpensive.01forPeopleandPlanet(GEAPP),ifalltheworld’sdramaticallyexpandaccessdevelopedeconomiesreachtheirnet-zerogoalsbytolow-carbonenergyandWhilestrategicgridextensionremainsavitaltooltoBarrier2050,whileemergingeconomiescontinuetorelyoneconomicopportunitiesforexpandaccesstoelectricity,thedistributednatureoffossilfuels,three-quartersofallemissionswillcomemillionsofpeople.renewablescandeliverthesamebenefitsmorecost-02fromemergingnations.Inthatscenario,theworldwilleffectivelyandinashorterperiod.Off-gridsolutions,beoncoursetowarmby2.5degreesCelsius.124fromlimitedenergyaccesstoderivingeconomic,likemini-gridsutilizingsolarandenergystorageBarrierhealth,andeducationalbenefitsfromconsistent,cleanandstand-alonehomepowersystems,candriveTheIEA’srecentWorldEnergyOutlook2023notenergysupplies.Withoutaccelerateddeploymentindustrializationandgreengrowthinareasthegrid03onlyemphasizedthecentralityofemergingmarketsofrenewables,theseeconomiesmightdefaulttodoesn’treach.Withmini-gridsandotherrenewables-intheenergytransitionbutalsosubtlyhintedatthefossilfuelsfortheirimmediateenergyneeds,givenbasedsolutions,businessesthatdependonelectricityBarrierrepercussionsofdelayedaction.Adelayedtransitionaffordabilityandsecurityconcerns.TheWorlddon’tfacetheriskthatcomesfromfrequentandlong-couldimplyanextendedrelianceonfossilfuels,Bankarguesthataccesstoenergyisattheheartoflastingblackouts.Gridreliabilityandexpansionscan04affectingbothglobalclimatetargetsandnet-zerodevelopment.alsobebolsteredinemergingeconomiesbyfocusingaspirations.“Theurgentchallengeistoincreasetheinvestmentsonrenewables.Barrierpaceofnewcleanenergyprojects,especiallyinmanyAccordingtotheIEA,770millionpeoplearoundemerginganddevelopingeconomiesoutsideChina.”125theglobelackedaccesstoelectricityin2022.126Whilethestandardnarrativeisaboutthechallenges05Putsimply,adramaticgrowthinrenewablescouldbeTheCOVID-19pandemicstalledandevenreversedofscalingrenewablesinemergingmarkets,manybeneficialforemergingcountriesandtheentireworld.consistentprogressinexpandingelectricityaccess.overlookthatmanyofthesemarketsharborsomeBarrierInSub-SaharanAfrica,forexample,600millionoftherichestrenewablespotentialglobally.128ForAcceleratingrenewablesacrossemergingmarketspeoplelackedaccesstoelectricityin2022,upfromexample,Africa’sampleandconsistentsunshine06isalsoanopportunitytodramaticallyexpandaccessmeansithas60percentoftheworld’sbestsolartolow-carbonenergyandeconomicopportunitiesresources,accordingtotheIEA.129DespitethatBarrierformillionsofpeople.Thisisespeciallyimportantinpotential,thecontinentonlyhasaroundonepercentofemergingmarketsinAfricabecausepopulationsareglobalinstalledsolarcapacity.07growingquickly,andtheneedforreliableenergytofueleconomicgrowthisacute.AccordingtotheIEA,BarrierTheenergytransitionindevelopedeconomiesmainly770million08describesashiftfromfossilfuelstorenewables.Yet,inmanyemergingeconomies,it’saboutmovingpeoplearoundtheBarrierglobelackedaccessto124GlobalEnergyAllianceforPeopleandPlanet,“PoweringPeopleandPlanet2022,”2022electricityin2022.09125InternationalEnergyAgency(IEA),WorldEnergyOutlooks2023,2023126InternationalEnergyAgency(IEA),“Accesstoelectricity,”2023,iea.org/reports/sdg7-data-and-projections/access-to-electricity,Accessed6Sept.2023Barrier127InternationalEnergyAgency(IEA),“Accesstoelectricity,”2023,iea.org/reports/sdg7-data-and-projections/access-to-electricity,Accessed6Sept.2023128TheWorldBank,“GlobalPhotovoltaicPowerPotentialByCountry,”2020.ThedatasetisgeneratedbySolargis(https://solargis.com)withfunding10providedbytheEnergySectorManagementAssistanceProgram(ESMAP).129InternationalEnergyAgency(IEA),“AfricaEnergyOutlook2022,”202263Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Barrierstorenewabledeploymentwhocansecurecorporateandprivateoff-takersUpfrontrenewablescostsremainexpensive.WhileBarrierforthecleanenergytheygenerate.Thisallowsthesolarandwindcostshavedeclinedsignificantly,theirTherearemanyreasonsrenewablesarenotscalingutilitytoconfirmthedemandforgreenenergyandupfrontcostscanbehigh.Withoutlow-costcapital,01inemergingmarketsasrapidlyastheworldneeds.thewillingnessofcustomerstopayitsincrementalthiscanbeabarriertoinvestment.Forexample,Inadequateinvestmentisasignificantenoughbarriercostincrease.thecostofsolarplusenergystoragetoreplaceaBarrierthatdemandsspecialattention(seebelow).ButbaseloadcoalplantwouldbemorethandoublethatofthereareahostofotherchallengesthatneedtobeLackofgriddataandexperiencewithrenewables.acoal-independentpowerproducertariff.Toscaleup02acknowledgedandaddressed,including:Utilitiesindevelopedmarketshavelongbeenrenewableswillrequireholisticcombinationsofwind,exposedtothechallengesofrenewables’inherentsolar,storage,andotherresourcesabletoreplaceBarrierThecentralityofcoal.Renewableshavebeenintermittency.Manyhavedevelopedasolidcapabilityfossilfuelscost-effectivelyandreliably.growingquicklyinrecentyears,butcoalremainstomanagegridintermittencyandunderstandthe03theprimarysourceofelectricitygenerationinmanydatarequiredtoassessgridreliabilityandcurtailmentMuchoffutureenergygrowthacrosstheworldnations.AccordingtotheEnergyInstitute’s2023risks.EmergingmarketshavehadfarlessrenewablewillbeinemergingmarketsanddevelopingBarrierStatisticalReviewofEnergy,coalconsumptionpenetrationandoftenlacktheexperience,knowledge,economieswhereenergydemandisgrowingincreasedtoitshighestlevelsince2014,drivenfamiliarity,comfort,anddatatoensurethedeliveryofrapidly,outpacingthatinadvancedeconomies.04largelybyincreasesinIndiaandChina.130Coal’selectricityreliablyinarenewable-heavygrid.Thescaleofcapitalrequiredismassive.Inthecontinuingdominancemeansitisentrenchedperiod2026–2030,withoutconsideringChina,Barrierinemergingnations’politicalandeconomictheannualinvestmentrequirementforglobalnetecosystems—asignificantcontributortogrosszeroemissionsby2050wouldbeoftheorder05domesticproduct(GDP),taxreceipts,andof$1tnperannum(~4Xof2022levels)andemploymentinunderprivilegedcommunities.Coaljustashadebelow$2tnperannumby2050,Barrierownershipisofteninthehandsofwealthyandfarexceedingthedeploymentsinadvancedpoliticallyinfluentialgroups.economies.Institutionalmechanismsforsuch06largecapitalflowsintotheEMDEsarecurrentlyRelianceoncentralplanning.Manyemergingabsent.ThehighcostofcapitalandcurrencyBarriermarketsrelyoncentralplanningandasinglebuyerdevaluationfurthercompoundthechallenges.frameworkcontrolledbythestateutility.ItisbeyondUnlessthesechallengesareaddressed07thecapabilityofanysingleinstitutiontocollect,proactively,thereisaninherentriskoftheanalyze,andactonalltheinformationneededEMDEsslowingdownthetransitiontrajectoryBarriertoreliablyserveconsumerswithaffordableandandplacingcontinuedrelianceonfossilfuels.sustainableenergy.Politicalrisk,includingcorruption,08alsodetersprivateinvestorsinsomeemergingAnishDemarkets.UtilitiesandregulatorscouldexploreGlobalHeadforEnergy,Natural,ResourcesBarrieroverhaulinggenerationandgridregulationstocreatea&Chemicals,moreagilepowersystemtomeetchangingconsumerKPMGInternational09needs.InIndonesia,KPMGisworkingwiththestateutilitytodeveloptendersforrenewabledevelopersBarrier130EnergyInstitute,“Energysystemstrugglesinfaceofgeopoliticaland10environmentalcrises,”202364Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.RenewableinvestmentslagfarMobilizingthenecessarycapitaltoscaleTheserisksdetertheinvestmentneededtoscaleBarrierbehindtheneedrenewablesandextendthemanypotentialrenewablesatalevelrequiredtoreachglobalnet-zerobenefitsofenergyaccessmeansthereisantargets.InAfrica,forexample,thecostofcapitalfor01Alackofsufficientinvestmentisthemainreasonopportunitytoreduceabroadspectrumofenergyprojectswasuptoseventimeshigherthaninrenewablesarenotyetscalingrapidlyenoughtorisks,someofthemrealandothersperceived.EuropeorNorthAmericain2021.Forty-eightpercentBarriermeeteithertheneedsofpeoplelivinginemergingTheyinclude:ofrenewableenergyindustrystakeholderssurveyedmarketsortheworld’sclimatetargets.AccordingtobyKPMGInternationalcitedemergingmarketrisks02theInternationalMonetaryFund(IMF),emergingand•Currencydepreciation,exchangerateasamoderatelysignificantobstacletoscalingdevelopingeconomiesneedtoinvestoverUSD1trillionvolatility,andcapitalcontrols.renewables.Incomparison,20percentsaiditwasaBarrierannuallyincleanenergyby2030toputtheworldonhighlysignificantobstacle.tracktoreachnet-zeroemissionsby2050.In2020,•Politicalrisks,policyuncertainty,03totalinvestmentswerelessthanUSD150billion.131andeconomicuncertaintyresultingHowtounlockinvestmentsAdditionally,theIMFprojectsthatUSD140billiontofromrapidpolicychangesthatimpactneededtotransformemergingBarrierUSD300billioninannualinvestmentsinadaptingtothecurrencyvaluationsorleadtochangesmarketrenewablesphysicalconsequencesofclimatechangeby2030istogovernmentprogramsdesignedto04alsoneeded.132supportrenewables.It’simportanttorecognizetherisksthatdeteremergingmarketrenewablesinvestors.ItisalsoimportanttoBarrier•Off-takerrisksduetothefinancialpointoutthatthereisasignificantupsideforinvestorsinstabilityofsomeutilitiesinemergingwhogaintheexperienceandexpertisetoinvestin05markets.Thisincreasestheriskofemergingmarkets.Forexample,theOECDsaysthatnonpaymentforpowerproducedbyexperiencedinvestorscanattainhigheraveragereturnsBarrierrenewables.inAfricathaninotherregionsacrosstheglobe.13306•Macroeconomicrisks,includinghighReforms,however,canfocusoncreatinganenvironmentinflationanddebtconstraints.wheretheincentivestoinvestinrenewablessurpassBarriertherisks.Thereareexamplesofnationswherea•Lackoftransparencyandoveralldifficultycombinationoffallingrenewableelectricitycostsand07ofdoingbusiness.easeofinvestmentmakesadifference—especiallywhenreformsaresupportedbydevelopmentfinanceBarrierinstitutions(DFIs)andmultilateraldevelopmentbanks(MDBs).Forexample,inZambia,theWorldBank’s08ScalingSolarprogramhasledtoarecord-lowtariffofjustoverUSDsixcentsperkilowatt-hour.134Barrier131InternationalMonetaryFund(IMF),“HowtoScaleUpPrivateClimateFinanceinEmergingEconomies,”202209132InternationalMonetaryFund(IMF),“HowtoScaleUpPrivateClimateFinanceinEmergingEconomies,”2022133OrganisationforEconomicCooperationandDevelopment(OECD),“Africa’sDevelopmentDynamics2023,”2023Barrier134TheWorldBank,“FinancialSolutionsBrief,ZambiaScalingSolar,”2018.https://thedocs.worldbank.org/en/doc/208821518200595153-0100022018/original/BriefsGuaranteesZambiaScalingSolar.pdf10ReportproducedbytheWorldBank,theInternationalFinanceCorporation,andtheMultilateralInvestmentGuaranteeAgency65Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.TheWorldBank’sScalingUpToPhaseDownprogramIndiaBarrierprovidesaroadmaptocatalyzecriticalinvestmentsinallemergingmarkets.India’sfirstParisAgreementIndonesia01NationallyDeterminedContribution(NDC)in2016includedhaving40percentofinstalledelectricpowerZambiapartnershipswithrenewableenergydeveloperswithBarriercapacitycomefromnon-fossilfuelsourcesby2030.atrackrecordofimplementinglarge-scaleprojectsSince2015,theWorldBankhasbeenprovidingloansandAspartofIndonesia’sefforttoacceleraterenewabletoworkwithPLNIPtobuildrenewablesandprovide02otherfinancingtosupportthedevelopmentoflargesolargeneration,KPMGservesastheleadfinancialadvisorequity.Inaddition,developerscanbringcorporatepowerplantsintheIndianstateofMadhyaPradesh.toPLNIndonesiaPower(PLNIP),astate-ownedutilitybuyerstoofftakethegreenenergyproducedtoreduceBarrierPTPLNunitfortheProyekHijaunesia2023project.Thetheneteffectivetariffpaymentburdenontheutility.Atthesametime,theIndiangovernmenthasprojectincludesaportfolioof13greenfieldrenewableKPMGandPLNIPalsoarrangedawell-priced,stable03introducedmeasurestopromoterenewables,suchasprojectstotaling1.2gigawatts,includingground-debtfacilityasanofferingtopotentialbidders.incentivesforelectricityconsumerstosourcemoremountedandfloatingsolar,wind,andbatteryhybridBarrierfromrenewablesandmodificationstotaxstructuresinstallations.ProyekHijaunesia2023isdevelopingrelatedtocoalpowerplants.Thesechangesand04WorldBankfinancingsupportedthedevelopmentofthe750-megawatt(MW)RewaSolarPark,whichBarrierattractedsignificantprivateinvestmentandnowproduceselectricityatacostofjustUSD4.4cents05perkilowatt-hour.135BarrierIndonesiaprovidesanotherexampleofanemergingmarketwherethepartnershipacceleratesrenewable06deployment.Attheendof2022,Indonesiaonlyhadaround300MWofsolarcapacity.136ButaspartoftheBarriercountry’sgoalofachievingnet-zerocarbonemissionsby2060,theIEAandIndonesia’sMinistryofEnergy07andMineralResources(MEMR)forecastthatsolarwillneedtomakeupbetween50and60percentoftheBarriercountry’sinstalledelectricitygenerationcapacityby2060.137Thegovernmentaimstodeploy6.5gigawatts08ofsolarby2025and45gigawattsby2050.138Barrier135TheWorldBank,“ScalingUpToPhaseDown,”2023.https://www.worldbank.org/en/topic/energy/publication/scaling-up-to-phase-down.136Statista,“SolarenergycapacityinIndonesia2013-2022,”202309137InternationalEnergyAgency(IEA),“AnEnergySectorRoadmaptoNetZeroEmissionsinIndonesia,“2022138PVMagazine,“IndonesianutilityPLNseeksequitypartnersforlargescalePV,windprojects,”2023Barrier66Turningthetideinscalingrenewables10©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Aseven-stepstrategytocapitalizeonemergingmarketopportunityBarrierTocapitalizeonthevastopportunityinemergingmarkets,wemustadoptacollaborativeapproach.Apossibleapproachforstakeholderscouldbeaseven-stepstrategy:011.Targetedreforms.actions:Streamlineregulatoryprocesses,offertaxincentivesforgreeninvestments,andlaunchpublicawarenesscampaignsBarrierStartwiththesethreeimmediate02aboutrenewableenergybenefits.Barrier2.Facilitateincreasedprivatefinance.anddevelopingnationsreachedarecordUSD250billionin2022.Itmustatleastdoubleby2030.AchievingPrivatesustainablefinance03inemergingmarketsBarrierthatwillrequireinnovativefinancinginstruments,broadeningtheinvestorbase,catalyzingthedevelopmentofbankableinvestmentprojects,andexpandingthe04involvementofMDBsanddevelopmentfinanceinstitutions.Barrier3.Leveragelocalpartners.partnersandadvisorscanhelpnavigatetheuncertaintiesofinvestinginemergingmarkets.Workingwithin-countryinvestment054.EnhancetheroleofMDBs.thenecessaryfinancingrequiredforclimateactioninemergingmarkets,givencleanenergytransition-relatedinvestmentBarrierMDBswillplayacriticalroleinproviding06willberequiredtoacceleratefromcurrentlevelstoaroundUSD4trillionannuallyby2030.139Barrier5.Aclearvisionandsupportivepolicies.07Policysignalsplayacriticalroleinattractinginvestmentsinrenewables.AccordingtotheIEA,40AfricancountriescurrentlyhaverenewabletargetsintheirParisAgreementNDCs.Butonly25haveastatedpolicytoreachuniversalelectrification.140Toattractnecessaryinvestmentsandinternationalsupport,nationscanBarrierdevelopaclearrenewablesobjectivethatistranslatedintosupportivepoliciesandregulations.086.Developastrategytomanagestrandedassets.isnotappealingtoemployees,owners,investors,orpolicymakers.Craftingwin-winstrategiesShuttingdownexistingfossilBarrierfueloperationsanddeclaringawrite-off09torepurposestrandedassetsforcarboncaptureandutilizationandotherpurposescangoalongwaytowardacceleratingthetransitionawayfromcoal.Barrier7.Embracethegoalofsharedprosperity.Inmuchofthedevelopedworld,theenergytransitionisviewedasavehicleforjobcreationandgrowth.Emergingmarketsmustbesupportedinwaysthatdeliver10prosperitytoasmanycommunitiesandhouseholdsaspossible.One-sidedtradewillnotbeasustainablelong-termstrategy.Fosteringbilateralandmultilateralcooperationandtraderelationshipsshouldfocusonbringingjobsandgreeneconomydevelopmentopportunitiestoemergingmarkets.Failingtodosowilldampenrenewablegrowthandencouragecountriestoconsideronerousimportbarriersandlocalcontentrequirements.139InternationalEnergyAgency(IEA),“WorldEnergyOutlook2021,”2021140InternationalEnergyAgency(IEA),“AfricaEnergyOutlook2022,”202267Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Nevertheless,Barrier36%01haveconfidencethatrenewableswillBarrierreplacefossilfuelsby2050.02ConclusionBarrierThebarriersoutlinedinthisreportaresignificantandposegenuinechallengesandriskstothecriticalprogressoftheenergytransition.Takentogether,theseobstacles03canappearinsurmountable,asdemonstratedbythe36percentofKPMGsurveyrespondentswhoarenotveryconfidentornotatallconfidentthatrenewableswillBarrierreplacefossilfuelsby2050.AtKPMG,wedrawadifferentconclusion.Theintentofclearlyoutliningthecomplexbarrierstoscalingrenewablesistoprovidebusinesses04withacomprehensiveunderstanding,enablingthemtomakeinformeddecisions.BarrierOverthepastdecadeandbeyond,theglobalcommunityhaslearnednottounderestimatethegrowthofrenewablesortheindustry’sabilitytonavigate05around,over,orthroughdifficultobstacles—fromtradewarstoanenergycrisistogeopoliticalconflicttoaglobalpandemic.KPMGprofessionalsbelievethecriticalBarriertakeawayfromthisreportisthatnowisthetimefororganizationstoseekguidanceinnavigatingthecomplexitiesoftheenergytransitionandovercomethebarriersthat06arepreventingrenewablesfromachievingtheirpotentialanddrivingeconomicvalue.BarrierFortunately,manyintherenewableenergyindustryshareKPMGprofessionals’clear-eyedrealismaboutthebarriersthatmustbeovercomeandconfidencethat07theyaretemporarychallenges.IntheKPMGsurveyaccompanyingthisreport,84percentofrespondentsagreedorstronglyagreedthatcurrentmarketchallengesBarrieraredelayingorcancelingprojects.Nevertheless,36percenthaveconfidencethatrenewableswillreplacefossilfuelsby2050.08Barrier09Barrier1068Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Asyourorganizationshapesitsfuturestrategy,contemplateintegratingthesethreeprinciples,whichcanAtKPMG,wearedeeplyBarrierenhanceoutcomesanddriveresults.committedtounderstandingtherenewableenergy01Collaborationlandscape,identifyingchallenges,andprovidingBarrierAdecarbonizedworld,bydefinition,isadeparturefromhowpeople,communities,andsocietiessolutionstailoredtoourhavefunctionedforoveracentury.Thismeansthatnewrelationshipsandalliancesmustbeclients’needs.02forgedtoensure,forexample,thatcommunitiesbecomeadvocatesforthesuccessofrenewablesbecausetheyareco-creatorsoftheenvironmentalandeconomicbenefitstheyproduce.BarrierCollaborationcanalsomeanforgingpartnershipswithschoolsandtrainingprogramstobuildtheskilledworkforcecompaniesneedtoscalerenewablesorpursueprojectsinemergingmarketswith03thehelpoflocalbusinesses.BarrierEducation04Thosewhoworkintherenewablesindustrycantakeforgrantedthatthebenefitsofsolar,wind,energystorage,andothercleanenergytechnologiesareself-evident.Theyarenot.IntakingBarrieractiontobreakdownthebarrierstoscalingrenewables,considerembracingtheroleofeducator.Educationseekstoimpartknowledgeandfostercomprehension.Itrequiresempathy,aneagerness05tohearandunderstandotherpointsofview,andacommitmenttothetruth.Thisappliestobuildingasociallicensetooperate,navigatingbiodiversityconcerns,andseekingcapitalforaproject.BarrierInnovation06ThesuccessofrenewablessofaristheresultoftheinnovationofcountlessindividualsacrossBarriertheglobe.Thisinnovationisrootedincreatingandimprovingnewtechnologies,businessmodels,financingschemes,andpublicpoliciesthatbirthedtheenergytransition.Ifanything,innovationis07evenmoreimportantnowtosurmountthebarriersthatpreventrenewablesfromrisingtoarapidscale.InnovationisessentialineverythingfromthedevelopmentofenergystoragetechnologiesBarrierabletodeliverflexibilitytorenewables-dominatedgridstoaccessingthecriticalmineralstheenergytransitionneeds.Goingforward,weplantoexaminetherolethatartificialintelligencecanplayin08helpingtomitigatetheimpactofatleastsomeofthebarriersidentifiedinthisreport.AnopenandinnovativemindsetwillrevealmanyoftheanswersneededtoTurntheTideinScalingRenewables.BarrierAtKPMG,wearedeeplycommittedtounderstandingtherenewableenergylandscape,identifyingchallenges,09andprovidingsolutionstailoredtoourclients’needs.Ourvastexperienceintheenergytransitionspaceequipsustoofferprofessionalservicesthataddressspecifichurdlesandhelppromotebusinessgrowth.IfyourBarrierorganizationisseekingguidanceonnavigatingtheenergytransition,KPMGprofessionalsareheretoassist,helpingtoensurethatyourstrategiesarenotonlyeffectivebutalsocommerciallyviable.Letushelpyoushapea10sustainablefuturegroundedinrobustcommercialprinciplesandpractices.69Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.MethodologyBarrierThesurveydataincludedinthisreportisbasedontheresultsofan01anonymizedonlinesurveyconductedbyKPMGInternationalinSeptemberandOctoberof2023.Intotal,110respondentsfromover24territoriesandBarriercountriesacrosstheglobeansweredquestionsabouttheneedtoacceleraterenewabledeployment,currentmarketchallenges,andpolicyeffectiveness.02Themajorityofrespondentsholdseniorleadershippositionsatbothpublicandprivatelyheldcompanies,includingexecutivevicepresident,managingBarrierdirector,director,andseniorvicepresident,aswellasC-Suitetitles.Surveyrespondentsrepresentstakeholdersacrosstherenewableenergyindustry,03includingdevelopers,utilities,investors,serviceproviders,government,andthepublicsector.ThetechnologyfocusofrespondentscoversaswathofBarrierrenewables,rangingfromsolar,wind,andenergystoragetohydropower,biomass,geothermal,andtidalenergy.04Surveyrespondentsarebasedinthesenations:Australia,Bolivia,Brazil,Canada,Denmark,France,Germany,India,Indonesia,Ireland,Japan,BarrierMalaysia,Mexico,Nigeria,Norway,Peru,Rwanda,Singapore,SouthAfrica,Turkey,Uganda,UnitedKingdom,UnitedStatesandVenezuela.0570TurningthetideinscalingrenewablesBarrier©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.06Barrier07Barrier08Barrier09Barrier10HowwecanhelpBarrierInanevolvingenergylandscapemarkedbysignificantchallengesandopportunities,KPMGprofessionalsaim01tobeattheforefrontasaleadertohelpprovideinsight,strategy,andactionableguidance.WeunderstandtheintricaciesoftherenewableenergysectorandthenecessityforbusinessestoadaptandthriveamidsttheseBarriercomplexities.02Localknowledge,globalexperienceBarrierAtKPMG,ourstrengthliesinharmonizinglocalexpertisewithavastglobalperspective.Weunderstandthenuancesoflocalmarkets,sowecantailorapproachesthatresonatewithspecificregionalneedswhile03drawinguponinternationalbestpracticesfromourextensiveoperationalfootprint.Thishelpsensurethattheadviceprovidedisbothlocallyrelevantandglobalinscope,allowingorganizationstonavigatetheirBarrieruniquechallengeswhilestayingontopofglobaltrends.04AwiderangeofservicesBarrierAnin-depthunderstandingoftechnical,financial,andregulatoryaspectsisnecessarytonavigatetherenewableenergylandscape.Toprovideservicesthatcapturetheentirerenewablesecosystem,KPMG05leveragesitsexpertiseacrossTax,Audit,RiskConsulting,DealAdvisory,andManagementConsulting.WeprovideapproachesthataimtoreflectthemultifacetednatureofrenewableenergychallengesandBarrieropportunitiesbystrivingtoensureclosecollaborationbetweenourspecialistsintechnologies,financing,supplychainoptimization,andregulatorycompliance.06Whetheryou’refacingobstaclestoscalingrenewablesorlookingtoexploreemergingmarkets,ourseasonedprofessionalscanprovideinsightsandstrategiesthatalignwithyourcommercialobjectives.Barrier71Turningthetideinscalingrenewables07©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.Barrier08Barrier09Barrier10AbouttheKPMGglobalAcknowledgmentKPMGenergyprofessionalsincludeoverBarrierenergytransitionpracticeWecouldnothavecreatedthisreportwithoutthe1,500partners01Theenergytransitionstandsasthedefiningchallengeofsupport,knowledgeandinsightsofcolleaguesaroundourera.EverysectorfacesmountingpressuretopowertheworldwhocontributedtheirtimeandenergytoitsandstaffinoverBarrierhumanprogressinawaythatisreliableandaffordableplanning,analysis,writingandproduction.Thankyoubutalso,critically,moresustainableandequitable.toAndrewWhite,TerenceMcGovern,JackMagill,50hubs02AdrianScholtz,ChiaraCatgiu,MattColquhuon,TracyKPMGfirmsareheretohelpguideyouthroughthisLane,SharadSomani,WenBinLim,TrevorHart,aroundtheworld,workingcloselywithBarrierincreasinglycomplexlandscape,enablingyoutoJamesColbert,AndySymington,Cle-AnneGabriel,institutionsandcompaniestohelpthemdeliveronyourambitionsforyourbusiness,peopleSarahNelson,CarolinLeeshaa,OrlaithDelargy,Woutunderstandtheebbandflowofenergy03andtheplanet.Steurs,JamesDelahunt,AnveshaThakker,Marinatransition,identifygrowthopportunitiesValls,LyndieDragomir,NicoleDuke,ErinDodds,EvelioanddevelopandexecutetheirstrategicBarrierKPMGenergyprofessionalsincludeover1,500RoblesAlejo,MariaMallinos,JeffHo,DebashishDas,plans.partnersandstaffinover50hubsaroundtheworld,SujayMohapatra,DrishtiSikka,JessicaLoSchiavo,04workingcloselywithinstitutionsandcompaniestoMehma,MayukhChowdhury,OzanCakmak,AlexhelpthemunderstandtheebbandflowofenergyChoi,SamanthaDann,RobFisher,MichellePacey,BenBarriertransition,identifygrowthopportunitiesanddevelopTwartz,NicholaWee,CatherineWhite.andexecutetheirstrategicplans.05Visitkpmg.com/energytransitionBarrier06Barrier07Barrier08Barrier09Barrier1072Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.KPMGcontactsBarrierAnishDeFranceliJodasFadiAlShihabi01GlobalHeadforEnergy,NaturalResources&ChemicalsGlobalLeader,Power&UtilitiesPartner,ESGandClimateChangeLeaderBarrierKPMGInternationalKPMGInternationalKPMGLowerGulfandKSAT:+911246691000T:+551139403171T:+96655623053202E:anishde@kpmg.comE:fjodas@kpmg.com.bE:falshihabi@kpmg.comBarrierCle-AnneGabrielAndrewMcHardyGeorgeSpakouris03AustraliaNationalLeader,HeadofDecarbonisationPartner,NationalDecarbonizationHubLeaderManagingDirector,Advisory,InfrastructureKPMGGlobalCo-Lead,JustTransitionKPMGinCanadaKPMGintheUSBarrierKPMGAustraliaE:amchardy@kpmg.caE:georgespakouris@kpmg.comE:cgabriel1@kpmg.com.au04SimonVirleyCBFEIQuentinGogaTsuneoMiyamotoBarrierPartnerandUKHeadofEnergyDirector,Infrastructure&ProjectFinance,EnergyLeadOil&GasLeaderKPMGintheUK05KPMGinFranceKPMGinJapanT:+442073115037E:qgoga@kpmg.frE:tsuneo.miyamoto@jp.kpmg.comE:simon.virley@kpmg.co.ukBarrierMikeHayesMichaelSalcher06ClimateChangeandDecarbonizationLeader,NationalSectorLeaderofEnergyandNaturalBarrierGlobalHeadofRenewableEnergyResourcesKPMGInternationalKPMGinGermany07T:+35314101656E:msalcher@kpmg.comE:mike.hayes@kpmg.ieBarrierDaisyShenWafaJafri08HeadofClimateChangeandSustainabilityPartner,EnergyDealAdvisoryKPMGChinaBarrierKPMGintheUKE:daisy.shen@kpmg.comE:wafa.jafri@kpmg.co.uk09Barrier1073Turningthetideinscalingrenewables©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.SomeoralloftheservicesdescribedhereinmaynotbepermissibleforKPMGauditclientsandtheiraffiliatesorrelatedentities.kpmg.comTheinformationcontainedhereinisofageneralnatureandisnotintendedtoaddressthecircumstancesofanyparticularindividualorentity.Althoughweendeavortoprovideaccurateandtimelyinformation,therecanbenoguaranteethatsuchinformationisaccurateasofthedateitisreceivedorthatitwillcontinuetobeaccurateinthefuture.Nooneshouldactonsuchinformationwithoutappropriateprofessionaladviceafterathoroughexaminationoftheparticularsituation.©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.KPMGreferstotheglobalorganizationortooneormoreofthememberfirmsofKPMGInternationalLimited(“KPMGInternational”),eachofwhichisaseparatelegalentity.KPMGInternationalLimitedisaprivateEnglishcompanylimitedbyguaranteeanddoesnotprovideservicestoclients.Formoredetailaboutourstructurepleasevisitkpmg.com/governance.TheKPMGnameandlogoaretrademarksusedunderlicensebytheindependentmemberfirmsoftheKPMGglobalorganization.Throughoutthisdocument,“we”,“KPMG”,“us”and“our”referstotheglobalorganizationortooneormoreofthememberfirmsofKPMGInternationalLimited(“KPMGInternational”),eachofwhichisaseparatelegalentity.DesignedbyEvalueserve.Publicationname:TurningthetideinscalingrenewablesPublicationnumber:139134-GPublicationdate:November2023

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