The Global Energy Transition

• Ember's Global Electricity Review 2026: renewables supplied 33.8% of 2025 generation (10,730 TWh) against coal's 33.0% (10,476 TWh), the first time renewables passed coal.
• Solar produced 2,778 TWh and passed wind for the first time. Wind and solar together reached 17.3%; gas had 21.8%.
• Electricity demand rose 2.8% (849 TWh) while fossil generation fell 38 TWh (-0.2%); power-sector emissions were roughly flat (-0.04%).

BloombergNEF's Energy Transition Investment Trends 2026 (26 January 2026) put 2025 investment at a record $2.3 trillion, up 8%, down from growth of 27% in 2021. China's total fell for the first time since 2013 to about $800 billion (34% of the global total); US investment rose to a record $378 billion. Data-centre investment was around half a trillion dollars.

• IEA World Energy Investment 2026 (published late May 2026): total energy investment of about $3.4 trillion, up about 5%, with $2.2 trillion for clean energy and electrification and $1.2 trillion for fossil fuels.
• Coal supply investment is set to reach $180 billion, the highest since 2012, with China about 70% of it. Oil supply investment is expected to fall for a third consecutive year.
• Roughly three-quarters of expected 2026 investment was decided before the Middle East conflict began (as reported in press coverage of the IEA report).

The IEA Oil Market Report of October 2026 projects world oil demand falling by 2.6 million barrels a day in 2026, with Gulf exports approaching pre-war levels by September and an interim US-Iran agreement possibly opening a gradual recovery. The Oxford Institute for Energy Studies (Oct 2026) reported Dated Brent averaging $126 a barrel over 1-23 October; the US EIA (Oct 2026) put September Brent at $114 and its fourth-quarter forecast at $105. The IEA says at least 30 energy facilities were moderately or severely damaged and that energy security now shapes investment priorities.

IEA Global EV Outlook 2026 (May 2026): 2025 electric car sales topped 20 million, up 20%, about one in four new cars worldwide, and close to 55% of new cars in China (about 13 million). Global sales fell 8% in Q1 2026 versus Q1 2025 on policy changes in China and the US, while Europe rose nearly 30%. The IEA expects about 23 million in 2026, nearly 30% of new cars, and says higher fuel prices are making EVs more attractive in many markets.

The Global Carbon Project's 2025 budget projected fossil CO2 of 38.1 billion tonnes, up 1.1% and a record, with about 170 billion tonnes left in the 1.5C budget (roughly four years at current emissions). This corrects the deck's earlier description of a flat plateau: 2025 was still a rise.

Not refreshed: the hydro, nuclear and other shares in the electricity-mix chart; the 90%+ renewable share of new capacity; battery cost decline; Africa's share of clean investment; the 2026 Global Carbon Budget edition (not found as published); the IEA's own 2025 clean and fossil investment split.

1. 1800sWood to coal: a century of substitution
2. 1900sCoal to oil: fifty years to dominance
3. 1960sGas and nuclear: decades to scale
4. 2010sSolar and wind: the fastest ramp yet
5. 2020sThe attempt: deliberate, deadline-driven

1. Clean the grid: solar, wind, storage, nuclear replace coal and gas power.
2. Electrify demand: EVs, heat pumps and industry switch to that grid.
3. Solve the hard rest: steel, cement, aviation, shipping need new chemistry.
4. Remove the residue: capture and removals mop up what remains.

Energy is the climate problem, to first order. Fix energy and the residual (agriculture, land use, industrial processes) becomes tractable. Fail on energy and nothing else matters.

• Solar: the cheapest electricity in history (deck No. 10).
• Batteries: 95% cheaper since 2010; EVs and grids both ride them.
• EVs: ~1 in 4 new cars worldwide in 2025; China ~55%.
• Wind: a fifth of Europe's power on good days.
• Heat pumps: 3-4x the efficiency of burning fuel for warmth.
• Nuclear's return: AI demand revives reactors, the surprise twist.

So far the world hasn't replaced fossil energy: it has added clean energy on top. The transition begins in earnest when addition becomes substitution.

Every prior energy 'transition' (wood to coal to oil) was actually an addition too. This one must be different, and that has never been done deliberately before.

1. Deploy clean tech
2. Costs fall (learning)
3. New markets open
4. More capital flows
5. Deploy faster (back to step 1: the cost flywheel)

China accounts for about a third of global transition investment (BloombergNEF, 2025), and one country builds more solar, batteries, EVs and grid than the rest of the world combined, and exports the hardware everyone else's transition runs on. The transition has a factory, and it isn't in the West.

• US majors: double down on oil and gas; return cash; buy time.
• European majors: diversify into power, wind and charging, unevenly.
• Gulf NOCs: pump the cheapest barrels last; fund diversification.
• Coal utilities: harvest, close, and pivot to renewables' grids.
• Traders: profit from the volatility the transition creates.
• Petrostates: sovereign funds racing their own depletion clock.

1. Power (solved)solar+storage wins on price
2. CarsEVs at sticker parity
3. Heatingheat pumps work, adoption lags
4. Industrysteel and cement need new chemistry
5. Planes and ships (unsolved)energy density still rules

• Steel: coal isn't just fuel, it's the chemistry. Green hydrogen routes are 2x the cost.
• Cement: the process itself emits CO2; capture may be unavoidable.
• Aviation: batteries are 50x too heavy for long haul.
• Shipping: ammonia and methanol compete; none is cheap.
• Chemicals: oil is the feedstock, not just the energy.
• Seasonal storage: weeks of winter backup still need fuels.

Steel, cement, aviation, shipping and chemicals. The first 70% of the transition is deployment; this last 30% is invention, and its clock runs a decade behind.

The transition's pace is set not by its best technologies but by its slowest bottleneck: permits, wires, minerals and politics.

Solar can double in two years; a transmission line takes twelve. The system moves at the speed of its queues.

A map of transition exposure (horizontal) against adaptability (vertical). Top right, 'the winners' (high exposure, high adaptability): China cleantech, Grid and equipment, Gulf NOCs, US shale and European majors sit toward the upper and middle right. Bottom right, 'exposed and rigid': Petrostates (poor) and Coal miners. The left half is labelled insulated (top) and stranded (bottom) and is empty.

For scale: roughly the GDP of Japan and Germany combined, redeployed into panels, batteries, EVs and wires. Reallocations of this size create industries and strand others.

The transition is often framed as a cost. It is better understood as the largest market creation event since the internet.

Costs are what incumbents see. Markets are what builders see. Both are looking at the same $2 trillion a year.

• Grid builders: wires win in every scenario (deck No. 11).
• Mineral refiners: the transition's tollbooth (deck No. 12).
• China's champions: CATL, BYD and peers own the hardware.
• Electricians and EPCs: the skilled-trades decade.
• Storage developers: the fastest-growing asset on grids.
• Efficiency tech: the cheapest energy is the unit not used.

The IEA projects $1.2 trillion for 2026, with coal supply investment at its highest since 2012 and oil supply investment falling for a third year. Not a collapse. The old system is being outgrown, not starved. Managing its long, profitable, politically-explosive decline is half the transition's work.

• Backlash politics: energy prices topple governments; policy reverses.
• Grid gridlock: queues throttle the build-out (deck No. 11).
• Mineral chokepoints: one embargo from disruption (deck No. 12).
• Demand surprise: AI's hunger absorbing the clean additions.
• Finance drought: high rates punish capital-heavy clean assets.
• Stranded assets: $ trillions of fossil value written down, somewhere.

The transition will be decided not by inventing new machines, but by building boring ones (wires, batteries and panels) at a pace politics can survive.

The technology race is largely won. The deployment race has barely begun.

1. Do global emissions finally fall? The plateau's end would be historic.
2. Does clean investment hold at high rates? The 2:1 ratio under expensive money.
3. Does China's EV wave go global? Cheap exports vs Western tariffs.
4. Does the Global South get financed? The transition's biggest open question.
5. Does firm clean power scale? Nuclear, geothermal and storage stepping up.

Every energy transition in history added a fuel without retiring one. This is civilisation's first attempt to do it on purpose, against a deadline, while doubling the demand, which is why it is both slower than hoped and faster than anything before it.

1. The flows have flipped: money and new build are decisively clean.
2. The stock is the fight: a century of infrastructure retires slowly.
3. Electrify everything: the master strategy behind every sub-plot.
4. The hard third waits on invention: steel, cement, planes, 2040 problems.
5. Buy the build-out, not the promise: wires, storage and minerals win every path.

• IEA: World Energy Investment 2025; World Energy Outlook.
• BloombergNEF: Energy Transition Investment Trends 2025.
• Ember: Global Electricity Review (2024-25).
• IRENA: renewable capacity statistics.
• Global Carbon Project: emissions data.
• DNV: Energy Transition Outlook 2025.
• Companion decks: Solar (No. 10), The Electric Grid (No. 11), Critical Minerals (No. 12).
• Figures marked 'estimate' or 'scenario' are compilations.