Global Energy Perspective 2026
These are unprecedented times for the global energy system
The system is becoming more uncertain—not less. Energy demand is growing, AI is creating a new source of power demand, geopolitics is reshaping supply chains, and affordability and security have moved alongside decarbonization as defining considerations.
Security
Roughly
30%
of oil and gas production is currently blocked from complete access to global trade
The Strait of Hormuz disruption and ongoing Ukraine–Russia war are severely impacting Middle Eastern and Russian oil and gas flows
This is the largest annual increase in any energy sector
in 2026, a roughly 21% year-over-year increase
$100 billion
Global investments in electricity grids will grow by nearly
Affordability
The world breached the 1.5ºC Paris Agreement–aligned threshold several times in 2025
long-term average temperature increase above pre-industrial levels
1.4ºC
The world is currently at about a
Decarbonization
As a result, executives need to plan for a wider range of plausible futures
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While scenarios help executive teams understand the possible evolution of the global energy system, this insight needs to be translated into an organizational point of view on which future is most likely to unfold if executive teams are to avoid decision paralysis. Scenario planning, while critical, is not a substitute for strategic action.
The strategic imperative is therefore no longer a single bet on one energy future, but to build for multiple plausible futures and know the signposts that should trigger a change of course.
that of the previous decade, mainly driven by emerging economies
2×
By 2035, global annual energy demand growth is expected to be
Across almost every scenario, energy demand continues to grow. In 2025, global energy demand grew 2.7% with oil, gas, coal, and renewables all expanding simultaneously. The defining question is shifting from “How quickly will fossil fuels decline?” to “What will supply the world’s growing energy needs?”
The transition has become an expansion
1
of global power by 2030
10–15%
Data centers are projected to consume
Data centers are the fastest-growing load segment in OECD power markets; the Continued Momentum baseline projects 24% CAGR in data-center electricity demand through 2030. But beyond 2030 the trajectory becomes significantly more uncertain.
At the same time, AI could improve forecasting, dispatch, maintenance, engineering, manufacturing, and system optimization—meaning it affects both sides of the energy equation.
AI is rewriting the power-demand equation
2
443
637
+3.2% per year
970
Distribution
1.1
Transmission
4.2
Transmission, distribution, storage, dispatchable capacity, interconnection, and flexibility determine how rapidly new generation can become usable, reliable power. Across the scenarios, infrastructure readiness emerges as the most common binding constraint; when it lags, electrification stalls regardless of how inexpensive renewable generation becomes.
While the levelized cost of electricity (LCOE) continues to fall for many technologies, global investment in T&D is expected to more than double by 2050, rising from $443 billion a year in 2025 to $970 billion a year in 2050—an average growth of 3.2% per year.
The next energy crisis is as likely to be about the grid, transformers, or supply chains as it is about barrels of oil.
Cheap generation alone does not create an affordable, reliable energy system.
The grid may be the ultimate speed limit
3
Reduced trading flexibility makes markets less resilient
Longer trade routes increase fuel and insurance costs
40–50%
Battery-storage capital costs increase by
20–25%
Solar capital costs increase by
In a Fragmented Energy Order scenario:
Fragmentation carries a price. A more divided global energy system could force the United States and European Union to rebuild concentrated supply chains outside China.
Geopolitics is becoming an energy cost.
4
September 30, 2026 | Report
Reference
(Sustainable
Transformation)
Reference (Slow
Evolution)
Fragmented Energy Order
Continued Momentum
Decarbonza-
tion Delivers
All of the Above Energy
Hydrocarbon
Resilience
Low-carbon, electrified system
Technology mix
Conventional system
Low
Med
High
Energy demand growth
An “addition rather than substitution” dynamic becomes most pronounced as the world continues to rely on fossil fuels to meet the ever-growing demand for energy.
Hydrocarbon Resilience: A world in which fossil fuel demand keeps rising
Geopolitical developments move the world even further toward a more “tripolar energy system,” with blocs coalescing around China and its trading partners, the United States and aligned markets, and Europe and its partners. Countries increasingly aim to meet energy demand within their own bloc through domestic resources, preferred suppliers, local-content requirements, tariffs, and strategic industrial policy. Global energy demand growth slows as the world’s GDP growth decelerates and trade becomes less efficient.
Fragmented Energy Order: When geopolitics fractures the energy system
Reflects a world that develops and utilizes every energy resource available to meet demand, ensure grid reliability, and keep energy costs affordable, with the net effect that all energy sources grow simultaneously. It harnesses hydrocarbon resources—oil, natural gas, and coal—alongside renewable wind, solar, geothermal, hydropower, and biofuel sources, as well as nuclear power.
All of the Above Energy: Utilizing every available resource to ensure reliable power
The energy system delivers simultaneously on affordability, security, and decarbonization. The driving mechanism is economic rather than policy based: When low-carbon technology costs fall fast enough that clean energy is the cheapest available option across the majority of applications, markets drive deployment without requiring sustained policy support.
Decarbonization Delivers: The scenario where everything accelerates
Based on several trends that are observable today and projects energy-system evolution into the future by extrapolating these trends, without assuming any breakthrough conditions.
Continued Momentum: The baseline scenario
Click on a scenario for more information.
The new scenario matrix
barrels per day by 2035
130 million
Oil demand could reach nearly
tons per annum by 2035
8,000 million
Coal demand could reach
In the high-growth Hydrocarbon Resilience scenario, demand would grow by more than 2.5 million barrels per day annually over the next decade—roughly twice the growth rate of the previous decade.
For companies, the implication is significant: Planning exclusively around an early peak in oil demand could create a risk of underinvestment and supply shortfalls.
Hydrocarbons are having a longer runway than expected
5
Global nuclear yearly net capacity growth, average, gigawatts
Today
(Continued
Momentum)
18
40
2050
(Decarbonization Delivers)
In the Decarbonization Delivers scenario, average annual net nuclear additions more than double through 2050
Nuclear discussions are seeing a revival, but it remains some way away from being a scalable, affordable solution. Today there are just nine small modular reactors in operation or under construction worldwide.
However, standardized designs, reduced construction risk, regulatory streamlining, lower costs, and increased customer demand from data centers, industry, and utilities could all change the picture for nuclear power.
Nuclear is not the solution … yet
6
Global investments in transmission and distribution are expected to more than double by 2050.
Yearly global investments in power transmission and distribution, $ billion
2025
2050
2035
Transmission
Distribution
Reconsider areas within the organization’s control—including manufacturing footprints, supply chains, sourcing, labor, technology, and operating models—to improve efficiency and resilience. The reality is that many organizations have not yet committed to long-term, structural changes across these areas. Others that are already shifting toward more decentralized operating models will support greater operational agility.
Are we making structural changes now?
Build the agility to reallocate capital, secure permits, reprioritize projects, and shift energy portfolios as signals evolve—for example, accelerating storage or firm power as AI demand grows or adjusting gas and LNG exposure as geopolitical risks intensify.
Can we move quickly when conditions change?
Establish a firm-wide view of the few market and energy-system signals that would trigger major structural changes for the organization, rather than trying to predict which single future will occur. Focus on the most business-critical or market-critical energy system signposts, rather than all variables to avoid a “scenario-trap” where future speculation overshadows the work of building resilience today.
Are we monitoring the right signposts?
Assess how your organizations have adapted in response to consecutive gray swan events such as COVID-19, the Russia–Ukraine war, and the Hormuz crisis. Then consider what lessons from these events should be translated into real long-term strategic and operational resilience to future-proof your organization.
Are we turning crisis response into resilience?
Test whether forecasts capture different energy-system scenarios, understand their core drivers, evaluate their limitations, and identify where opportunities, risks, or the need to pivot emerge. Importantly, ask how quickly the organization can pivot when the next crisis hits.
Are we planning for multiple futures?
Energy executives can use the Global Energy Perspective to test whether their organization is tracking the right set of market signals, has a firm-wide view of its posture in a geopolitically fragmented world, and is adequately adapting its short-term shock responses into long-term resilience. Such considerations can also reveal whether and how operating models may need to change to maximize efficiency.
The focus should be on identifying critical signals, translating crisis lessons into lasting resilience, making structural changes where needed, and building the agility to act quickly as conditions shift. Executives can ask several probing questions to begin pressure-testing their strategies:
Moving from scenarios to strategic action
Taken together, these questions are intended as a provocation for executives operating under uncertainty: How well do you understand the points at which your business survives, thrives, or fails in its market? The Global Energy Perspective is not intended to be used as a static set of scenarios that define a single strategic path, but rather as a strategy-management system that helps executives explore plausible futures in order to decide which bets to make now, which options to preserve, and which signals would justify changing course. To request access to the data and analytics related to our Global Energy Perspective, or to speak to our team, please contact us.
3“C3S global temperature trend monitor,” Copernicus Climate Change Service, accessed September 29, 2026.
2World Energy Investment 2026, International Energy Agency, June 2026.
1Statistical Review of World Energy, Energy Institute, June 30, 2026.
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