The impact of geopolitical tensions was emphasised in both reports, given the Ukraine war and Middle East conflict as well as the increasing use of sanctions and tariffs. These and other global factors are ‘refocusing energy tension on energy security’, said BP Chief Economist Spencer Dale in his wide-ranging introduction to the BP 2025 Energy Outlook.

For its part, the ninth edition of DNV’s 2025 Energy Transition Outlook considers that the global shift towards cleaner energy ‘remains robust’, even though the pace of the energy transition in the US has slowed sharply due to recent policy reversals. However, Sverre Alvik, DNV Vice President and Director of the Energy Transition Outlook predicts that ‘the US slowdown will have only a marginal effect on worldwide progress [in the energy transition] as momentum builds elsewhere’.

Both reports anticipate ‘exponential growth’ in data centres to support growing appetite for artificial intelligence (AI) but differ in their estimates of power consumption.

More worryingly, both sets of analysts see carbon emissions continuing to climb, ‘with the risk that it will become harder and more costly for the world to remain within a given carbon budget’, says Alvik. DNV expects global CO₂ emissions to reduce by 43% from today to 2050 – much less than the Paris Agreement ambitions – and only reach net zero after 2090. Europe’s emissions are forecast to fall 9% by 2050 as the region pivots from imported fossil fuels towards renewables.

Both BP and DNV recognise that China is setting new records for renewable energy deployment – accounting for 56% of global solar PV installations and 60% of new wind power additions this year alone, along with a lead in battery production. Indeed, Alvik suggests that ‘Chinese export of clean technologies will be more important than the influence of American politics for the rest of the world’.

Broadly speaking, DNV forecasts a slightly slower energy transition, with the energy mix split 51:49% between fossil and non-fossil fuels in 2050, with global CO₂ emissions by that time forecast to be 4% higher than last year’s Outlook. In his introduction to the DNV report, Remi Eriksen, Group President and CEO of DNV says: ‘The global energy transition is still evolving, with momentum shifting to regions that are doubling down on clean technologies.’

The modelling approach
BP’s Outlook considers two main scenarios: the ‘current trajectory’, along which the global system is travelling – which is likely to burst through 2°C – compared to a greener scenario which keeps climate change ‘below 2°C’.

BP believes carbon emissions in the ‘current trajectory’ will stabilise this decade, and then decline gradually during the 2030s and 2040s. Dale maintains that ‘the pace of decarbonisation is slow and shallow’. So, by 2050 carbon emissions will only be 25% lower than they are today. Whereas in the ‘below 2°C’ pathway, the world achieves a faster and deeper reduction in carbon emissions, falling about 90% by 2050 due to significant tightening in climate policies.

Nevertheless, he recognises that: ‘BP can’t predict the future. There is only a tiny chance that either of these scenarios will line up exactly with what happens. However, they can help us develop insights about how the energy system might develop.’

Fossil fuels will remain significant
BP Energy Outlook author Gareth Ramsay, who is due to become Chief Economist, takes up the story. He says fossil fuels will continue to play a significant role in both scenarios. In the current trajectory, oil demand is expected to rise over the rest of this decade, before gently falling back to its current level by 2035, and around 85mn b/d by 2050. Whereas in the ‘below 2°C’ scenario, the decline in demand starts sooner, with much greater intensity, to around 35mn b/d by 2050. But Ramsay insists: ‘Both scenarios imply that oil will carry on playing a central role in the energy system for at least the next 10 to 15 years.’

DNV also recognises key signs of change. Although the transition has been dominated by fossil fuels for decades, current energy use is around 80% oil, gas and coal, with 20% renewables and nuclear in the energy system. DNV sees global emissions ‘peaking from now onwards, replacing fossil energy on an absolute basis, going from the present 80:20 split to a 50:50 split in mid-century’.

Alvik forecasts that coal will be the first fossil fuel to decline, while oil demand will peak within the next five years on a global scale. ‘Within the next 30 years we expect oil demand to decline almost 50% and coal demand to fall 85%, with gas having longer staying power, peaking around 2040 and then going into gradual decline as it is replaced by renewables,’ he says.

Powering up
On the power front, DNV notes that electric vehicles (EVs) and solar are setting new milestones year-by-year. Global electricity supply and demand continues to grow, and green, and is forecast to increase 120% from now to 2060, doubling from a 21% share of total energy demand today to 43% in 2060. Of that, China will have installed more than twice as much capacity as Europe, and global solar PV capacity is projected to reach over 3,000 GW this year.

Although half of electricity today is from fossil fuels, that share is anticipated to decline to 4% in 2060, with prime growth in wind and solar. While much of the additional solar power will be produced at utility scale, DNV forecasts significant solar power behind-the-meter, accounting for 30% of solar by 2060 and 13% of all power.

Nuclear power is forecast to grow about 150% between now and 2060, accounting for 9% of electricity production, with small modular reactors (SMRs) playing a central role in nuclear growth. However, DNV recognises there are no SMRs installed as yet in the western part of the world. But adds they are ‘coming slowly’, and from 2045 SMRs could account for half of the nuclear installations.

The BP Outlook notes that over the past 10 years, world demand for electricity has grown twice as fast as demand for energy overall, and that trend is likely to continue, with global demand for power more than doubling by 2050. Interestingly, Ramsey reflects that: ‘The vast majority of this electricity demand growth is in emerging economies, driven by rising prosperity – forecast to rise from a little over one fifth of world energy consumption today to nearly 30% by 2050 in the current trajectory, and rising to 50% by 2050 in the “below 2°C” scenario.’

In both BP scenarios wind and solar generation will become a central foundation of global energy systems. Together they generated about 15% of global electricity last year but are forecast to account for more than half of global power generation by 2050 in the ‘current trajectory’, and over 70% in the ‘below 2°C’ scenario. What’s more, solar grows faster than wind in both scenarios. ‘Though costs grow faster [in solar], it’s quicker to deploy, and gets greater policy support,’ comments Ramsey.

What’s up with gas?
However, where the trends differ materially in BP’s scenarios is the outlook for natural gas. Demand is expected to be pretty strong in both scenarios over the next decade, but takes two different paths.

In the current trajectory, natural gas demand will keep rising until the mid-2040s, to reach about 20% above its current level, driven mostly by rising demand in emerging economies as they industrialise. But in marked contrast, in the ‘below 2°C’ scenario, natural gas demand will start to decline in the early 2030s and by 2050 will be about half its current level, given greater decarbonisation as gas loses more share to wind and solar power, displaced by faster electrification of buildings and industry.

Data centres and AI
Higher electricity demand will be driven by increased use of EVs, and greater data centre demand, which is forecast to make up around a tenth of extra demand over the next decade or so. Nevertheless, data centre demand is expected to have much bigger impact in some regions than others. In the US it will account for 40% of electricity demand growth over the next decade, according to BP’s calculations, compared to other parts of the globe.

DNV also forecasts exponential growth of AI over the next five years, followed by more linear growth due to better efficiency – accounting for 3% of global electricity use in 2040, as data centre energy use quintuples. There will be large regional variations: such as in North America, where data centre use will account for 16% of all electricity by 2040, with 12% being AI.

Prospects for low-carbon hydrogen and CCS
In its current trajectory, BP sees the growth of both low-carbon hydrogen and carbon capture and storage (CCS) as ‘pretty limited’. Low-carbon hydrogen is expected to reach 75mn t/y in 2050 in the current trajectory, which is less than current demand for hydrogen which is entirely produced from unabated fossil fuels today. Likewise, CCS reaches only 700mn tonnes by 2050 in this scenario. However, the growth of low-carbon hydrogen and CCS is much stronger in the greener scenario, reaching 350mn t/y of low-carbon hydrogen by 2050 and around 6 Gt of CCS by 2050. Ramsey suggests that the low take-up is attributable to the high expense of these technologies relative to their current alternatives, whether that’s coal and unabated natural gas in the case of hydrogen production, or the cost avoided by simply not capturing emissions in the case of CCS.

The argument for reshoring
Which brings us back to geopolitics. DNV sees growing tensions challenging the old western-dominated world order. ‘There is an increased willingness to pay for domestically produced energy sources. This means investment in renewable energy all over the world, like nuclear energy, coal in China, coal in India, and oil and gas in North America,’ says Alvik. This drives reshoring of manufacture to reduce vulnerability and supply chain interruptions, to increase national energy security, but can drive costs upwards, while protecting domestic industries to build their own.

However, DNV observes that the net effect of all this energy security focus is a cleaner environment. ‘We see that regions and countries that are importing energy, like Europe, India and China, have lower emissions as an effect of energy security policies, because they are doubling down on installing more renewables. By contrast, energy exporting regions, like North America and the Middle East, are predicted to have higher emissions because of energy security, while protecting their own oil and gas industries. However, for the most part, energy security is not hampering the transition, it is actually fuelling it,’ remarks Alvik.

BP’s Ramsey concurs: ‘A greater shift to self-reliance might dampen the growth of international trade as countries move their supply chain back home or restrict them to countries most politically stable or aligned with them… or encourage countries to seek to reduce their dependency on imported energy and energy technologies.’

• Further reading: ‘Energy for the developing world: trends and drivers from the Statistical Review of World Energy’. Energy Institute President Andy Brown OBE FEI reflects on the organisation’s statistical snapshot of global energy, with a particular focus on the needs of the developing world.
• Global renewable energy investment reached a record in 1H2025, even as developers reassessed risks around revenue and policy uncertainty. At the same time, multilateral development banks (MDBs) delivered an unprecedented $137bn in climate finance, underscoring the scale of capital flows driving the energy transition.