Overview
Energy is essential to modern life, enabling heating, cooling, transportation, lighting, information, and material production. Global energy demand is projected to grow by 50 percent between 2020 and 2050, driven by billions of people in developing countries improving their living standards. The energy “trilemma” requires energy systems to provide reliable, affordable, and clean energy, but no single source satisfies all three requirements perfectly: Coal is reliable and cheap but polluting; renewables are clean and cheap but intermittent; nuclear is clean and reliable but costly. In response, a flurry of innovation has arisen to lower costs and increase reliability and availability; although research today will not affect the trilemma in the near term, it is laying the foundation for a sounder energy future in the long run.
Despite the rapid growth of renewables, hydrocarbons still supplied 86 percent of primary energy globally in 2024. Long asset lifetimes, integration challenges, and conflicting stakeholder interests impede efforts to change large, complex energy systems. Efficiency improvements can be offset by increased use. Innovation in energy must produce fuel or electricity at costs competitive with existing options. Renewables face challenges—backup generation costs, grid management issues, fire risks in battery storage, and dependence on critical imported materials—that impede rapid transition.
KEY DEVELOPMENTS
In recent years, electrical demand has surged, driven by data centers, artificial intelligence (AI) workloads, cryptocurrency mining, electric vehicles (EVs), heat pumps, and industrial reshoring, with growth exceeding 2 percent annually for three consecutive years. Forecasts anticipate a 16 to 25 percent rise over five years, straining grid capacity and necessitating new generation. Investments have been shifting from intermittent solar and wind to natural gas, nuclear, and energy storage. Nuclear power, projected to triple capacity by 2050, is increasingly being paired with digital infrastructure like AI data centers. However, supply chain risks associated with high-assay low-enriched uranium, historically imported from Russia, pose challenges. New investments aim to expand domestic enrichment capabilities. Coal is also gaining renewed policy attention and interest for its domestic availability and reliability.
These trends, many predating the current US administration, reveal a pragmatic shift toward affordable, reliable energy over rapid emissions reduction. Globally, fossil fuel consumption hit record highs in 2024 with rising carbon dioxide (CO₂) emissions, while geopolitical tensions and market dynamics weakened decarbonization-friendly policies. Despite pledges for carbon neutrality, countries like China and India continue significant coal build-outs.
