How to update my MacBook Pro (Retina, 13-inch, Early 2015) Sierra to IOS 11

That is a security update for Catalina MacOS 10.15.x (to be installed on a Mac already running Catalina) and it won't install on your Mac running Sierra. It has nothing to do with disk space (and note there is no mention of disk space in your screenshot).

Note that is is macOS 11, not iOS11. See instructions in: How to get old versions of macOS - Apple Support

Also note that an early 2015 or later can be upgraded to the current version of Monterey macOS 12. See: How to upgrade to macOS Monterey - Apple Support

Gautam Biswas wrote:

How to update my MacBook Pro (Retina, 13-inch, Early 2015) Sierra to IOS 11

Your old Sierra uses the HFS+ file format...

you are woefully behind.

There is insightful information included here—

 Installing macOS on a separate APFS volume - Apple Support see this part:

What you need

Your Mac must already be using macOS High Sierra or later on an APFS-formatted startup disk. Find out which format your startup disk is using.

You are much better off stair stepping your way up to avoid issues— at least to High Sierra

High Sierra uses APFS (Apple File System format)

Big Sur requires the APFS

File system formats available in Disk Utility on Mac - Apple ...

Gautam Biswas wrote:

Thanks. I am facing issues on disk space, system is reporting space not enough, though has 145GB available. What to do?

https://discussions.apple.com/content/attachment/8a03a3c9-a35b-4377-8b0b-d426dac26df7

Makes no difference if it is not formatted as APFS...

Find out which format your startup disk is using.

See the following from my previous reply:

See instructions in: How to get old versions of macOS - Apple Support