Not least of these are the structural strains on existing power-generation, transmission, and distribution infrastructure created by new flows of electricity and by the inherent variability of renewables, including potential imbalances in supply and demand, changes in transmission flow patterns, and the potential for greater system instability. However, the rising share of renewables in the power mix brings with it new challenges. And the good news is that the global power industry is making giant strides toward reducing emissions by switching from fossil-fuel-fired power generation to predominantly wind and solar photovoltaic (PV) power. Most projections suggest that in order for the world’s climate goals to be attained, the power sector needs to decarbonize fully by 2040. This article is a collaborative effort by Alberto Bettoli, Martin Linder, Tomas Nauclér, Jesse Noffsinger, Suvojoy Sengupta, Humayun Tai, and Godart van Gendt, representing views from McKinsey’s Electric Power & Natural Gas and Sustainability Practices.

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