EXECUTIVE SUMMARY
Our Global Energy Transition 2025 Outlook reflects an enthusiastic and sustained commitment by 86% of energy suppliers and investors and 73% of commercial consumers to low-carbon transition strategies.
That commitment is set against a backdrop of initiatives to lower greenhouse gas (GHG) emissions, improvements in access to capital, continued mergers and acquisitions (M&A) and strategic alliance activity, rapid innovation, and increasing government support as the world strives to meet the objectives of the energy trilemma: security, affordability, and sustainability.
Key findings
The results of this year’s survey of over 1,300 respondents worldwide show:
Improved access to capital
76% of energy suppliers and investors have started new projects this year. Survey responses illustrate significant optimism around ongoing M&A activity and strategic alliances across the sector.
Managing innovation is seen as a top leadership challenge for energy suppliers
61% of energy suppliers and investors ranked innovation management as the most important skill for effective leadership.
Energy suppliers embrace artificial intelligence (AI)
85% of energy suppliers and investors are currently investing in and using AI applications (45%) or are considering usage of AI (40%), especially to manage efficiency and operational functions. When asked which of a range of technologies and resources had the most long-term promise for their business, AI applications was the top response, cited by 44%.
Enduring and accelerating commitment for energy transition
Most respondents, whether energy suppliers or commercial consumers, are maintaining or accelerating plans to decarbonize their operations. Energy suppliers and investors are funding their decarbonization through strategic investment (58%) as well as operating income (55%). Commercial consumers are leveraging their own operating income (63%) as well as private capital (40%).
Government support is critical to the long game of the energy transition
45% of energy suppliers and investors see permitting as a material obstacle to the long-term success of their efforts and so are prioritizing regulatory/permitting concerns over financing. By comparison, 30% of respondents cite a phase out of incentives and grants as problematic in the long-term.
Commercial consumers target efficiency and energy saving methods to reach net zero goals
61% favor this approach for reaching net zero goals, and 52% see it as a means to ensure access to an affordable and reliable energy supply (52%). 43% are leveraging process re-design, another important means of optimizing energy efficiency.
Our survey results showcase a global energy sector at a pivotal moment in the transition to cleaner energy. With improving financial conditions and a growing emphasis on decarbonization for energy suppliers, investors, and commercial consumers, the energy economy's commitment to climate change goals remains strong.
However, while the short-term looks positive, more crucial work needs to be done – particularly in encouraging further government support to develop infrastructure and refine regulations. Amidst the ongoing narratives of geopolitical tension, supply chain challenges and evolving energy policy, it is more important than ever to de-risk investment and drive innovation to facilitate a climate resilient future.
Jeffrey Whittle, Global Sector Leader - Energy & Natural Resources and Richard Cockburn, U.K. Sector Leader - Energy & Natural Resources
Resilience in transition: steadfast commitment amid global challenges
As we present the findings of this year’s global energy transition survey, sentiment has shifted since our 2024 Report was published in November of 2023.
While 56% of respondents in our previous outlook indicated increased focus on their energy transition strategy, they did so in a year that had witnessed a notable recalibration of expectations and approaches.
Major energy companies had dramatically stepped back from their previous energy transition commitments, and there was a growing recognition of the complexities of reaching net zero goals.
An interplay of economic factors, including rising interest rates and inflation, had impacted the viability of large-scale, long-term infrastructure projects, particularly in offshore wind.
There was a growing understanding of the need to modernize and upgrade the grid to efficiently deliver power from both conventional and renewable resources. And the reality of political risk to long-term energy transition goals loomed large as 2024 would see elections in 76 countries.
Despite ongoing challenges highlighted by the industry and illustrated in this outlook, this year's survey reveals a resilient and forward-thinking mindset across producers and commercial consumers of energy as well as those who invest in energy-related assets.
The sector's commitment to decarbonization and business optimization is apparent and demonstrates adaptability in the face of a rapidly evolving landscape.
Energy companies are proactively shaping their futures and leveraging technologies and flexible collaboration to navigate the global energy transition.
Commercial consumers are investing in strategies to lower emissions using operating income and are confident in their ability to meet their net zero goals.
The industry's determination to overcome obstacles and drive positive change sets an optimistic tone for the future, suggesting that even as challenges persist, so too does the ingenuity and resolve to meet them head-on.
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