The global energy sector faces unprecedented uncertainty, driven by geopolitical tensions, market shifts, and climate risks. Yet several clear trends are emerging: electricity is becoming the dominant energy source, renewables—especially solar—are expanding rapidly, and nuclear power is experiencing a resurgence. Energy security risks are rising, particularly around critical minerals and infrastructure, prompting greater government intervention in markets and supply chains, reports Fatih Birol of the International Energy Agency.
Meanwhile, abundant supplies of fuels and technologies are creating a buyer’s market, and emerging economies are increasingly shaping global energy demand. Despite volatility, these trends provide decision-makers with guidance for investing in resilient, future-focused energy systems. Birol writes:
The energy sector, like many others, is contending with a blizzard of uncertainties, complicating the work of policymakers, business leaders and investors.
Geopolitical twists and turns are straining long-established relationships and upending deeply held assumptions. The World Uncertainty Index, devised by economists from the IMF and Stanford University, has hit unprecedented levels in recent months.
But in this time of flux, there are still some important trends that we can identify with some confidence. […]
Oil and gas will still be widely used for many years to come, but the use of electricity is growing twice as a fast as overall energy demand. It’s the key energy input to the most dynamic parts of the global economy – such as AI, data centres and high-tech manufacturing – and is increasing its share of major sectors like road transport and heating through technologies such as EVs and heat pumps. […]
Despite some headwinds, in many countries around the world, renewables are meeting much if not all of the rising demand for electricity, often because they are the most competitive option. […]
After a series of setbacks in the 2010s, nuclear is on the rise again, generating more electricity than ever before last year. Today, more than 70 gigawatts of new nuclear capacity is under construction, one of the highest levels in the past 30 years. […]
Amid today’s turmoil, focusing only on uncertainties can lead to indecision and paralysis. A wait-and-see approach on energy by governments, companies and investors risks storing up trouble for the future, given the world’s thirst for energy and the continuous need for investment. There are still some certainties that decision-makers can rely on: let’s not lose sight of them as we plan for the future.
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