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Energy Transition Outlook 2025: Rising Demand, Renewable Promise & Policy Gaps

BloombergNEF’s Energy Transition Outlook 2025 presents a detailed view of how global energy systems are transforming amid policy uncertainty, geopolitical tensions, and surging power needs—especially from AI and data centers. The Economic Transition Scenario (ETS) assumes investments are guided by market forces and existing policies, not strict climate mandates. It highlights both rapid progress and critical shortcomings on the road to net zero.

Global power demand is forecasted to rise by 75% by 2050, largely due to economic growth, electrification of transport, and energy-intensive data centers, which alone could consume nearly 9% of global electricity by mid-century. While renewables and EVs are scaling fast—renewable generation set to provide 67% of electricity by 2050 and EVs dominating the transport sector—fossil fuels will still play a significant role. Coal and oil will decline, but natural gas demand is expected to increase by 25%.

Clean technologies could deliver 75% of required emissions cuts by 2050, but under ETS, global warming still reaches 2.6°C—missing the Paris Agreement goals. The report emphasizes that achieving net zero isn’t a matter of affordability but of mobilizing capital and enacting stronger policies to accelerate low-carbon solutions like hydrogen and carbon capture.