Global Energy Shift: The Path to Electrification and Security
London and New York City, May 19, 2026 – In the face of recent energy shocks, the world is reevaluating how it produces, distributes, and utilizes energy. A new report from BloombergNEF (BNEF), titled New Energy Outlook 2026, suggests that by embracing economically viable clean technologies, countries can reduce their dependency on imported fossil fuels and enhance energy security.
The Economic Transition Scenario (ETS) in BNEF’s report outlines the projected evolution of the global energy system through 2050. Many nations dependent on fossil fuels, particularly in Asia, stand to benefit economically by adopting low-carbon technologies. Countries such as Vietnam, Japan, Indonesia, and India spent between 3% and 6% of their GDP on energy imports in 2025. In contrast, the European Union and China spent 2.3% and 2.7% of GDP, respectively, on such imports but are expected to reduce these figures significantly over the next decade.
While some coal-rich countries might reconsider coal usage due to energy security concerns, BNEF’s ETS indicates that coal will not remain competitive cost-wise and will see a decline in power generation use by 2050. Instead, the world is poised to enter an electricity-led era, with electricity predicted to account for two-thirds of new energy demand over the next 24 years. This demand is largely driven by the rise of electric vehicles and expanding data centers, which are projected to consume 1,114 terawatt-hours, or 3.6% of global electricity demand by 2050.
Regional energy transition timelines vary, with China leading in electrification. By 2023, electricity became the dominant energy source in China, with coal’s share decreasing from 32% in 2025 to 7% by 2050. India is expected to see electricity surpass oil and coal by 2041, while Europe and the US are projected to reach similar milestones by 2043 and 2047, respectively.
By 2032, solar power is expected to become the world’s largest electricity generator, supported by an increase in battery storage capacity from 223GW in 2025 to 3.8TW by 2035. David Hostert, Chief Economist at BloombergNEF, remarked: “We’re living in another moment of crisis, but unlike in past decades, today there are real options for countries to react. We now have viable technologies that can be deployed at scale and fast, at an overall lower cost to the system than the fossil fuel technologies that used to be the primary choice. Through clean power and electrification we can strengthen energy security and reduce harmful emissions along the way.”
The rise in clean technologies, particularly the transition from coal to renewables and batteries, is crucial in reducing CO2 emissions, despite a projected increase in natural gas usage. The shift in energy consumption patterns will necessitate more adaptable power systems, with 11% of megawatt-hours expected to be shifted by 2035.
In 2025, investments in global energy transition reached $2.3 trillion. However, to achieve the Net Zero Scenario (NZS) by 2050, a total of $235 trillion is required, emphasizing a focus on low-carbon technologies.
Key Findings and Future Outlook
Electricity demand has surged since 2000, driven by increased consumption in buildings and industries. BNEF projects a further demand increase of 29% by 2035 and 69% by 2050. This growth is particularly significant in developing economies and presents challenges for grid expansion and investment.
The New Energy Outlook report also updates the NZS, which projects a slower pace of transition and a peak warming of 1.81C. Achieving a 1.5C target is deemed unfeasible due to ongoing high emissions and investments in emission-heavy assets.
Despite substantial investments in new energy technologies, breakthroughs in low-cost innovations such as nuclear or geothermal have yet to materialize at scale. Notably, China and India are leading in nuclear expansion, accounting for a significant portion of global nuclear capacity additions through 2035.
Clients can access the full report on BNEF’s website and the Bloomberg Terminal.
Original Story at about.bnef.com