The report suggests that global electricity demand is growing fast, driven by a race to decarbonise. Yet greenhouse gas emissions are not decreasing fast enough to meet international targets, putting the world on a trajectory towards 2.3°C of warming by 2100.

Space cooling (22%) and EV charging (21%) will drive most electricity demand growth from today to 2040, narrowly ahead of data centres and AI (18%). In the period, EV adoption will grow towards a projected 50% share of passenger vehicle sales by the mid-2030s. At the same time, digital infrastructure is scaling at an unprecedented rate: global data centre electricity consumption is forecast to multiply 14-fold to reach 5,700TWh by 2060, with AI workloads overtaking conventional data centre use as early as 2031.

DNV reports that electrification stands out as a powerful lever to improve and strengthen energy security and accelerate decarbonisation. The analysis finds that the rate of electrification over the next 20 years is more than double the pace of the previous 20 years. Electricity’s share of final energy demand rises from 21% today to 33% by 2045.

Rather than renewable generation alone, system integration and infrastructure are emerging as defining challenges of the coming decade. Battery storage is outperforming mainstream forecasts, with data from the report suggesting installed capacity has increased 14-fold over the past five years, although transmission capacity and demand flexibility will struggle to keep pace with rapid generation growth.

The primary energy mix continues to evolve away from fossil dominance. While fossil fuels accounted for roughly 80% of shipments and production a decade ago, the report projects an equal split between fossil and non-fossil sources by 2050. Fossil-importing regions like Europe, China and India are moving towards clean energy technologies, renewables and nuclear power. Data from the DNV report suggests the share of non-fossil energy in the primary energy mix grew more than three times faster in importing regions than in exporting regions over the past five years.

Short-term geopolitical shocks can permanently alter demand trajectories. According to the report, the conflict in the Persian Gulf and the resulting disruption of transit corridors like the Strait of Hormuz changed global energy demand. Middle Eastern oil producers are projected to lose market share over time: the report suggests they will supply about 40% of global oil production in 2050. This output level is lower than the 50% projected in previous forecasts.

Battery manufacturing capacity is expanding globally – supporting both stationary storage applications and EV adoption curves. At the same time, grid operators look to be investing heavily in digitalisation and advanced monitoring tools to manage variable renewable power inputs. These technical adaptations remain essential for maintaining system stability as electricity demand accelerates across residential, commercial and industrial categories, the report notes.

Aviation and maritime sectors face higher barriers to decarbonisation. These sectors will increasingly rely on bioenergy, sustainable aviation fuels and efficiency gains.

However, the report indicates that buildings are the only sector where final energy demand will increase across the forecast period due to rising populations, floor area expansion, cooling needs and electricity demand.

Additional data within the report indicate that solar and wind deployments continue to scale rapidly across developing and developed economies alike, showing the long-term viability of non-fossil generation assets despite persistent grid constraints. Policy frameworks are found to be evolving in response to supply chain pressures and raw material costs.

‘The defining challenge of the coming decade will be turning the accelerating deployment of renewable generation into economic advantage,’ said Knut Ørbeck-Nilsen, Group President and CEO of DNV. ‘That means extracting more value from every renewable megawatt we build by applying a new level of systems thinking to how energy assets are deployed and in how policy shapes the value they deliver.’