Ask any grid operator what kept them awake in 2025 and you’ll get two answers: an embarrassment of renewable riches and a sudden hunger for gas. Those contradictions—record solar and wind growth side-by-side with a new wave of oil and LNG investment—are the main story for energy in 2026.
A world pulling in different directions
In the past two years renewable power additions have smashed records: more than nine in ten megawatts of new capacity last year came from wind, solar and storage. At the same time, liquefied natural gas projects surged, and major producers are pushing markets to absorb more fossil fuel supply. That split reflects a deeper reality: we are no longer running a single, unified global transition. Different governments have different priorities—climate, industrial competitiveness, or short-term energy security—and those priorities are shaping investment and policy.
The diplomatic drama that unfolded at COP30 in Belém made that cleavage plain. Brazil pushed for a formal road-map to wean energy systems off fossil fuels in a “just and orderly” way; more than 80 countries signed on in spirit. But oil- and gas-producing blocs fought to keep any binding roadmap out of the final agreement. The fight isn’t just about targets. It’s about how to handle supply, demand and the deep economic dependence some states have on hydrocarbon revenues.
Geopolitics, money and the new energy geography
Two competing casts are emerging: petro-states that want to protect market share and electro-states that see economic advantage in clean-energy manufacturing and electrification. Norway and Brazil have both signaled they’ll study transition paths—Norway with a formal commission and Brazil proposing an energy transition fund financed partly from oil revenues—showing that oil-producing countries can frame transitions on their own terms. Meanwhile, the U.S. has shifted toward using its position as a leading oil and gas exporter to secure markets, even as other parts of the world accelerate decarbonization.
Policy tools are diverging too. The EU is pressing forward with carbon pricing and industrial measures such as the carbon border adjustment mechanism to spur low-carbon manufacturing. That contrasts with regions where industrial and geopolitical priorities have pushed climate policy down the list.
Tech and markets that keep the transition honest
Despite the politics, economics keeps pulling the power sector toward cleaner sources. BloombergNEF forecasts roughly 4.5 terawatts of new wind and solar through 2030—about two-thirds more than the previous five-year period—and expects energy storage deployments to top 100 GW in 2026 as battery pack prices fall sharply (surveyed equipment prices hover near $117/kWh). Those cost curves make renewables hard to ignore, even in places where policy support has weakened.
Electrification of transport is arguably the single most disruptive trend for oil demand. EVs are already more than a quarter of global car sales and could reach roughly 40% by 2030, with China leading the pack. As EV share grows it reshapes fuel demand trajectories and the marketplace for batteries, charging infrastructure and rare materials.
At the same time, a fresh demand engine has appeared: AI. The explosion of compute-heavy applications—data centers, training clusters and new edge infrastructure—has added a large, rapid, and location-sensitive load on grids. Companies and policymakers are experimenting with novel concepts (even ambitious ideas to colocate or rethink data center geography) to manage that appetite. That intersection of AI and energy is where infrastructure, corporate strategy and policy collide; you can see some of those dynamics in projects such as Google’s Project Suncatcher and the broader push to integrate generative AI into everyday services like search and office apps, as described in coverage of Gemini Deep Research.
Hard sectors, incremental wins
For heavy industry, shipping and aviation, decarbonization remains expensive and fragmented. Technologies like clean hydrogen, carbon capture and sustainable aviation fuels are scaling—but from small bases. Current projections expect carbon capture capacity to increase several-fold by 2030 and clean hydrogen to grow meaningfully, yet both still represent a sliver of what will be needed for deep decarbonization. Policy packages—demand guarantees, subsidies, carbon pricing and trade measures—will determine whether those technologies jump from niche to mainstream.
The EU’s suite of industrial climate policies (carbon pricing, border adjustments and funding mechanisms) may become a template—or a provocation—for others. If it succeeds in lowering emissions without wrecking competitiveness, it could pull more markets toward stringent standards. If it falters, the world risks a patchwork of competing rules that slow investment and raise costs.
For countries dependent on hydrocarbons, the practical question is simple: what replaces the rents?
Nigeria offers a stark example. Oil revenues have historically financed much of the government budget, yet vast parts of the population still lack reliable electricity. Untapped solar, hydro and wind resources could deliver both power and jobs, but doing that at scale requires careful planning and capital: transition funds, retraining, and transparent governance.
The same is true for many petro-states. Transition road maps being sketched after COP30 will need to square climate ambition with economic realism. That’s messy, political work—far less glamorous than the headline targets, but absolutely central to whether the transition is equitable.
What to watch in 2026 (without being predictable)
- Renewables keep growing because they are cheap—and that economic gravity will keep attracting projects even where politics pull another way. Expect deployment to continue, though pace and location will vary.
- Gas and LNG projects will press forward to meet near-term demand, especially from regions seeking fuel security. The market will have to find buyers for the extra supply, which raises commercial and geopolitical tensions.
- Electrification and AI-driven demand will create new stress points on grids and spur faster storage rollouts, flexibility services and new procurement models.
- Industrial decarbonization will inch forward through policy packages and pilots; success will depend on whether buyers and governments can create reliable demand for low-carbon industrial goods.
- Whether the COP30 road-map ideas gain traction will be a test of global solidarity: can the world craft mechanisms that help fossil-reliant economies diversify without sparking destabilizing fallout?
This is not a neat race toward a single finish line. Instead, it looks like a crowded relay where teams are running different legs with different strategies—and the baton is both money and political will. The planet doesn’t care which team wins; it only counts the result.