The global energy industry stands at a major crossroads.

The intersection of policy, politics, finance and technology with the energy industry has rarely been as significant as it is today. More than half of the world's population across 70 countries held national elections in 2024. New governments are leading significant changes in energy and climate policies, reevaluating the pace of the energy transition. Affordable and secure energy for economic growth is taking priority, especially in countries where prohibitive energy costs are contributing to high and persistent inflation.

At the same time, technological factors are reshaping global energy markets. New datacenters, built to power rapid acceleration in the use of AI models, are creating a major surge in electricity demand and renewed interest in nuclear energy as a source of carbon-free firm power. Demand for some clean technologies such as solar photovoltaics and batteries continues to grow, but restructuring cleantech supply chains is proving a challenge.

This issue of the S&P Global Research Council’s Look Forward publication explores a wide range of topics, assessing the state of the energy transition and the pragmatic path forward. It highlights essential truths about the direction of global energy markets and climate change, the progress being made by the oil and gas industry to measure and mitigate methane emissions, how to assess climate risks, and the potential impact of AI on optimization and innovation across energy value chains.  

Look Forward: Energy at the Crossroads provides a window into the broad spectrum of topics that S&P Global researchers, analysts and economists cover throughout the year for our clients globally. We encourage you to read previous volumes of this publication, including Look Forward: Multidimensional Transition, published in March 2024. 

S&P Global is a reliable and trusted source of data and insights that helps companies and countries navigate an uncertain and dynamic world. Please get in touch: We welcome your feedback and suggestions as we strive to improve and evolve this publication. 

The multidimensional energy transition is more evident today than a year ago. After 12 months of persistently high inflation, weak economic growth and elevated energy costs, countries and companies around the world are starting to reassess their energy strategies and climate policies. The energy industry is at a crossroads, with new pathways and directions emerging.

Consumers want affordable energy, and governments are prioritizing security over sustainability. Many are reassessing the ambition to redesign the global energy system and, by inference, the global economy in the next 25 years. All eyes are on the US and how the Trump administration’s actions will alter the direction of the country's energy industry and climate policies — actions with impacts far beyond US borders.

At the same time, energy demand and emissions continue to grow. The world remains in energy-addition mode, with demand growth for hydrocarbons and renewables such as wind and solar. Electricity demand is surging due to the accelerating construction of AI datacenters by hyperscalers. Such demand growth is likely to be met by natural gas and renewables through the end of this decade, even though interest and investments in nuclear technologies are at a generational peak.

Progress in scaling clean energy technologies has been variable. The cost of solar photovoltaics, onshore wind, electric vehicles and battery power is declining globally, with a commensurate increase in deployment. China, with its vast manufacturing base, is a leading deployer of clean energy technologies. Meanwhile, the euphoria surrounding green hydrogen has cooled significantly due to its high production cost and lack of customers. The carbon capture and storage (CCS) project pipeline is moving slowly, with few final investment decisions made in 2024. Successful execution of projects in the next five years will be critical to prove that CCS can reach gigaton scale.

The combination of strong growth in energy demand and slow to no change in the primary energy mix indicates that it is no longer possible to reach net-zero emissions by 2050. It also means that the goal of the Paris Agreement on climate change — limiting the global average temperature increase to 1.5 degrees C above preindustrial levels by 2100 — is unachievable.

The articles in this edition of Look Forward provide a window into the complex and fast-changing nature of the global energy industry. Our authors highlight the predetermined elements of the energy transition, the reasons for a global resurgence in nuclear power and the feasibility of creating new clean technology supply chains outside of China. They discuss how observation data is upending our understanding of methane emissions, how AI is advancing optimization and innovation in the energy sector, the physical risks from climate change, and the role indexes can play in the energy transition. 

Our goal is to shine a light on the global energy system — the progress made, the challenges ahead and the potential solutions. As we navigate the energy transition, S&P Global will continue to provide timely and insightful analysis to prepare our readers for whatever road lies ahead.