- BloombergNEF’s New Energy Outlook 2025 maps out how the global energy transition could progress, driven by competitive economics, investment decisions to meet rising energy demand and existing short-term policy settings
- The report’s base case, the Economic Transition Scenario, finds robust adoption of clean power and electrification in road transport, growth in natural gas demand, and long-term decline in coal and oil could cut overall emissions by 22% by 2050
- BNEF’s modeling indicates that emissions have potentially seen structural decline for the first time globally
LONDON, April 15, 2025 – Navigating the energy transition has never been more complex for investors and businesses as they face elevated policy risks and geopolitical tension. BloombergNEF’s (BNEF’s) New Energy Outlook 2025, published today, examines the strong case for clean energy technologies and how the global energy transition is expected to progress at the intersection of increasingly cost-competitive solutions and growing energy demand.
BNEF’s updated Economic Transition Scenario (ETS) maps out a route to a lower-carbon energy system in a world where cost-competitive technologies drive investment decisions to meet rising energy demand. Under this scenario, BNEF sees faster growth in power demand due to increased use of artificial intelligence, which presents both a major challenge and opportunity for businesses. According to the report, demand for electric power rises 75% by 2050 as economic development, electric vehicles, cooling needs and data centers increase overall use.
“Growing economies in Asia, the Middle East and Africa account for a large portion of the increase, David Hostert, global head of economics and modelling at BNEF, and lead author of the report, said. “It is here that the greatest opportunities for power infrastructure investment will lie. We expect data-center power demand in these markets to grow by six to 16 times by 2035 and reach 260 terawatt-hours.”
Specifically, data centers are emerging as one of the most important new sources of electricity demand, representing 4.5% of total global power demand in 2035 and rising to 8.7% in 2050. BNEF estimates that an additional 362 gigawatts of power generation capacity will be needed globally by 2035 to meet data-center demand. The US stands out as the single most important market in this trend. According to BNEF’s analysis in The US Data Center Market Outlook, which is also published today, US data centers are projected to grow from 3.5% of total electricity demand in 2024 to 8.6% by 2035 – a faster rise than any other major load class. Over the next five years, demand from US data centers could outpace even electric vehicles’ incremental demand, driven by the surge in AI training workloads that require significant compute capacity and highly energy-dense infrastructure.
In BNEF’s global ETS, renewables and electric vehicles continue to expand their role as they become more cost-competitive and maturing technologies drive faster adoption. Renewable generation increases 84% in the five years to 2030, and doubles again by 2050. Solar, wind and other renewable sources serve 67% of the world’s demand for electric power by 2050, up from 33% in 2024. Similarly, sales of passenger electric vehicles increase to 42 million in 2030 – up from 17.2 million in 2024 – and almost double again to 80 million in 2050. With the robust adoption of clean power and electrification in road transport in the coming decades, BNEF sees emissions in ETS fall 22% by 2050 (back to 2005 levels), a trajectory in line with global warming of 2.6C by 2100, with a 67% likelihood.
“Major investment and rapid deployment of clean energy technologies across markets is essential to materializing real change, said Matthias Kimmel, head of energy economics at BNEF and co-author of the report. “The total investment potential for renewables in our ETS is almost $6 trillion from 2025 to 2035, and $10.55 trillion from 2025 to 2050. Policy makers and investors should continue to take advantage of readily available solutions like renewables, storage and electric vehicles, and capitalize on emerging opportunities surrounding energy supply and security.”
While electrification helps deliver a 40% reduction in oil consumption in the transport sector by mid-century, gas plays a larger role in the ETS due to lower long-term fuel price expectations and higher electricity demand from data centers. Specifically, global natural gas demand increases 25% from 2024 to 2050. Meanwhile, unlike renewables and EVs, hydrogen and carbon capture and storage, clean fuels and low-carbon industrial processes all struggle to make an impact in the ETS.
The report also provides a comparison to BNEF’s previously published Net Zero Scenario (NZS), which charts a pathway to global net zero by 2050 and global warming of 1.75 degrees Celsius. The NZS calls for much faster deployment of clean technologies: by 2035, there are 16 terawatts of wind and solar installed globally, versus 12.6TW in the ETS. The passenger EV fleet is twice as large by 2035, at 952 million vehicles on the road. Nuclear power capacity rises above 750GW, hydrogen to 159 million metric tons, and demand for sustainable aviation fuel jumps to nearly 40 billion gallons, as multiple sectors race to decarbonize faster.
This year’s New Energy Outlook also contains a section focused on the 10 years to 2035, the year when countries will submit the third round of Nationally Determined Contributions (NDCs) under the Paris Agreement, which are due this year in advance of COP30 in Brazil. While many countries have yet to share their emissions pledges, the report indicates that markets like the EU, Australia and South Korea need to target roughly a 70% reduction in emissions by 2035 to align to the NZS.
Other findings in the report include:
- The need to scale key technologies like renewable energy, electric vehicles, battery energy storage, carbon capture and storage, hydrogen, sustainable fuels, heat pumps, grid infrastructure and more to reach net-zero emissions.
- The investment volumes needed to achieve both the base case ETS ($185 trillion) and NZS ($213 trillion) and why there’s only a 15% difference between the two pathways.
- How major countries stack up against each other with their carbon emissions trajectories, what emissions reductions are needed to meet the Paris Agreement goals, and assessments for countries that have submitted their third NDC.
- Insights into the evolution of energy consumption and emissions by key economic sectors.
BNEF subscribers can find the full report on the client website and on the Bloomberg Terminal. For all others, an abridged summary is available here.
Contact
Oktavia Catsaros
BloombergNEF
+1 212 617 9209
ocatsaros@bloomberg.net
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About BloombergNEF
BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.