What 2025 Revealed About The Next Phase Of The Energy Transition

As 2025 draws to a close, the energy transition is defined by a paradox: surging capital amid evaporating certainty. On one hand, policy headwinds – including rollbacks under the Trump administration – threaten clean energy momentum. Meanwhile, climate extremes persist, with 2025 tracking towards one of the hottest years on record and global energy sector emissions hitting new highs in 2024. On the other hand, 2025 has also delivered remarkable breakthroughs. For the first time ever, renewable sources (wind and solar) outpaced coal in global electricity generation in H1 of 2025. At the same time, record levels of financing flowed into clean energy: global investment in renewables reached $386 billion, a 10% year-on-year rise.

Looking ahead, the question isn’t whether capital will flow into the energy transition, but where and how. Our latest analysis shows that 2026-2027 will be defined by geographic divergence, policy volatility, and intensifying competition across technologies and supply chains. CEOs must prepare for a market where opportunity is expanding – but so too is complexity.

Three themes now dominate the investment landscape:

• Resilience as a strategic anchor. After multiple high-profile disruptions in 2025, boards are prioritizing technologies that maintain uptime and reduce exposure to grid volatility. Microgrids, battery energy storage systems (BESS) and back-up power are moving to the top of the agenda.
• Flexibility and demand-side participation. Electrification – from fleets to industrial processes – is accelerating, creating new load challenges. Firms are investing in distributed energy resource management systems (DERMS), demand response programmes and intelligent load optimization to monetize flexibility and avoid peak demand risks.
• Digital convergence and efficiency. Energy tech ecosystems are evolving into integrated, data-rich platforms. AI-driven energy management software, real-time analytics and automation tools are becoming essential for cost control, compliance and decarbonization. Interoperability will be a key differentiator as buyers seek unified solutions for reporting and optimization.

Taken together, these themes signal a shift from capacity-led decarbonization to resilience- and performance-led investment. This means energy strategy can no longer sit solely with sustainability or facilities teams; risk management, capital planning and operational resilience are all now core considerations.

Regional dynamics further amplify this complexity. China’s state-backed renewables surge prioritizes speed and scale; the US faces a patchwork of incentives and grid bottlenecks; and the EU is leaning into hydrogen and storage as system balancers. The result is not convergence, but fragmentation, forcing firms to tailor strategies to local policy landscapes while standardizing digitally.

Looking forwards, the energy transition will become increasingly decentralized. In a fragmented transition, the winners will not be those who wait for policy clarity, but those who build strategies anchored in operational resilience, demand-side intelligence and controlling energy outcomes at the asset level.

For a deeper view on how these forces will shape investment decisions through 2027, see What The CEO Needs To Know: Energy Transition Investment Trends 2026-2027, and be sure to tune in to our predictions webinar.