Renewables are on the brink of becoming the world’s default energy source.
As China keeps rolling out renewables at an unrivalled scale, solar and wind are now generating more power than fossil fuels in the EU; Africa is emerging as a solar powerhouse; and corporate demand for renewables is booming across Asia.
The trend is clear – no matter the backtracking in some parts of the world – but are we starting to see real tipping points?
While fossil fuel subsidies remain stubbornly high, the market is sending clear signals. Coal is at a historic low. Global oil demand is “sluggish” at best. Gas may still be a go-to for many, but renewables have started to push at the margins, reducing peak use. These effects start at the edges, then compound.
Meanwhile, record investment in the wider energy transition now far exceeds spending on oil, gas, and coal – $2.3tn versus $1.1tn last year.
Even in the US, transition investment rose by 3.5%, and of all new capacity added to the grid through November last year, 92% came from solar, wind and storage.
While China’s massive renewables scale-up is being matched by grid investment, in Europe, the US and other parts of Asia, the networks that carry our electricity – suffering from decades of under-investment – aren’t fit for purpose anymore.
It’s a complex system, with plenty of components that need attention, and decisions taken in 2026 will likely shape it for years to come.
The frontrunners in this are advancing flexibility – creating grids that are capable of balancing demand spikes and renewable variability in real time. They are introducing large-scale battery storage – easier than ever because batteries are cheaper than ever. And they are exploring innovative storage solutions and technologies like vehicle-to-grid, which turns EVs into grid-balancing batteries.
Interconnectivity is key: different, and often distant, parts of the grid need to continuously speak to each other to ensure electricity goes from where the wind blows and the sun shines to where it doesn’t. European countries set the scene in January with plans for new interconnectors between joint offshore wind projects.
Rapidly developing markets across Africa and Asia may be leapfrogging this issue – thanks to renewable microgrids. Currently, this consumer-driven renewables revolution is being achieved without the vast cost of traditional infrastructure. However, even here, the challenge of future system integration needs to be planned-in today.
In technical terms, grids will be policymakers’ biggest task.
AI’s spectacular growth is reshaping global energy demand.
In just a few years’ time, the world’s data centres are expected to use more electricity than Japan. There’s no cheaper or faster way to meet this demand than the powerful combination of renewables and storage – but how can we make sure data centres can be clean around clock?
A number of companies are currently pioneering ways to power their operations with locally sourced carbon-free electricity – every hour, every day.
Deploying renewables at scale is the foundation for this. But we also need to act with speed and determination at advancing storage (yes, those cheaper batteries again), improving the grids, and innovating the technologies that’ll help bring it all together – 24/7.
The missing piece? Energy efficiency, which remains curiously underplayed, but has huge potential to reduce the impact of data centres. Advanced cooling technologies, intelligent monitoring, infrastructure updates, and AI-driven building optimisation are some of the smart energy solutions being explored and invested in by forward-thinking companies right now.
Big Tech’s choice in the next chapter is simple. Innovate, improve, and create new efficiencies at the fore of a new energy powering AI – or fall back on fossil fuels and be seen as lazy, old and out of ideas, adding emissions to the atmosphere to boot.
Getting businesses worldwide to measure, manage, and report their emissions to a common standard is a tall order – and it’s no surprise the latest revision of the Greenhouse Gas Protocol (GHGP) is taking its time.
Consultation and conversation will ultimately lead to a better product, as a standard dating to 2014 is being updated to sync with today’s highly dynamic, advanced energy market.
But some are using this to push their own agenda. The recently launched “Carbon Measures” proposal – chief backer: Exxon – is being peddled as a good-faith alternative, when it’s mostly designed to “distract and delay,” and likely to absolve the oil industry from any responsibility for their polluting products.
The GHGP is gearing itself towards locally sourced, hourly carbon-free electricity – a concept companies like Google, AstraZeneca and AirTrunk have recently been advancing with us, alongside carbon-free electricity experts.
The GHG Protocol-revision, once finalised, won’t come into effect until 2027, but to get the most benefits, corporate leaders should prepare now.
We tend to think of the energy transition in terms of markets or grids, but a new layer will gain importance in 2026: Industrial Development Zones (IDZs) – powered entirely by near-by renewables.
China is pioneering the massive built-out of such no-carbon zones, and some Asian players are already following suit, with South Korea planning to build “RE100 industrial complexes” for example.
IDZs are focussing on meeting the aggregated power-demand of multiple businesses in renewable-powered hubs – that’s a gamechanger for both global corporate giants and small to medium operations. It offers a ready-made pathway to decarbonisation, and a potential new blueprint for decarbonisation worldwide, which could ripple through supply chains.
What’s the potential for large-scale industrial transformation from this model? This will be one of the most dynamic developments to watch over the coming years.
A new energy is taking over.
The global energy transition is now underpinned by so much investment, corporate willpower, and future-oriented policymaking that it's looking to become irreversible. Even if the forces of old energy are still trying to convince us otherwise.
For any company or country that cares about energy security and future competitiveness, strategic alignment with this new energy is the only sensible choice.
Sam Kimmins is Director of Energy at Climate Group. With our #NewEnergy campaign, we're going to the frontiers of global energy shifts. The latest trends for Asia will be explored at the Climate Group Asia Action Summit (21 May, Singapore).
This article was first published in Business Green.