NEO 2026 Executive Summary Preview

The route to 2035 and beyond

The 2026 edition presents a new base-case scenario and a major update to our well-below-2C climate scenario. Against a backdrop of geopolitical tension and rising electricity demand, this year’s outlook explores how the global energy system may evolve as countries seek to balance resilience, affordability and decarbonization. The report examines how renewables, batteries, electric vehicles, nuclear and next-generation technologies are reshaping energy globally and within key markets.

The transition to new energy technologies improves resilience to fossil-fuel price shocks.

Energy security has risen to the top of the policy agenda. NEO 2026 finds that countries reliant on imported fossil fuels can materially reduce exposure to price shocks as electrification and clean power scale. As adoption of solar modules, batteries, heat pumps, electric vehicles, and other technologies accelerates, nations that are dependent on fossil fuels stand to improve their energy security under our base case. This can happen faster under the Net Zero Scenario.

Energy commodity import dependence by market and scenario in 2025, 2035 and 2050

Economic Transition Scenario

Net Zero Scenario

Source: BloombergNEF Trade Transition Scenario Tool, Sinoimex Global Trade Flow (GTF), GCAM. Note: Future imports scaled forward based on 2024 actuals, using domestic demand for related products and services under different scenarios. This projection assumes relative trade patterns remain static and uses the same GDP projections under both scenarios. Negative values indicate imports.

The transition to new energy technologies improves resilience to fossil-fuel price shocks.

Energy security has risen to the top of the policy agenda. NEO 2026 finds that countries reliant on imported fossil fuels can materially reduce exposure to price shocks as electrification and clean power scale. As adoption of solar modules, batteries, heat pumps, electric vehicles, and other technologies accelerates, nations that are dependent on fossil fuels stand to improve their energy security under our base case. This can happen faster under the Net Zero Scenario.

Energy commodity import dependence by market and scenario in 2025, 2035 and 2050

Economic Transition Scenario

Net Zero Scenario

Source: BloombergNEF Trade Transition Scenario Tool, Sinoimex Global Trade Flow (GTF), GCAM. Note: Future imports scaled forward based on 2024 actuals, using domestic demand for related products and services under different scenarios. This projection assumes relative trade patterns remain static and uses the same GDP projections under both scenarios. Negative values indicate imports.

The transition to new energy technologies improves resilience to fossil-fuel price shocks.

Energy security has risen to the top of the policy agenda. NEO 2026 finds that countries reliant on imported fossil fuels can materially reduce exposure to price shocks as electrification and clean power scale. As adoption of solar modules, batteries, heat pumps, electric vehicles, and other technologies accelerates, nations that are dependent on fossil fuels stand to improve their energy security under our base case. This can happen faster under the Net Zero Scenario.

Energy commodity import dependence by market and scenario in 2025, 2035 and 2050

Economic Transition Scenario

Net Zero Scenario

Source: BloombergNEF Trade Transition Scenario Tool, Sinoimex Global Trade Flow (GTF), GCAM. Note: Future imports scaled forward based on 2024 actuals, using domestic demand for related products and services under different scenarios. This projection assumes relative trade patterns remain static and uses the same GDP projections under both scenarios. Negative values indicate imports.

Strong fundamentals underpin growth in renewables, batteries and EVs

In the Economic Transition Scenario, emissions enter a gradual structural decline as clean technologies gain share based on economics alone. Most emissions reductions over the next decade come from clean power and electrification, with renewables displacing coal generation and electric vehicles slowing growth in oil demand. The Net Zero Scenario moves faster and further, combining accelerated deployment of renewables, batteries and EVs with large-scale use of hydrogen, carbon capture and sustainable fuels to drive deeper emissions reductions across industry, transport and buildings.

CO2 emissions reductions from fuel combustion by measures adopted, Economic Transition Scenario versus “no transition” scenario and Net Zero Scenario

Source: BloombergNEF. Note: The “no transition” scenario is a hypothetical counterfactual that models no further improvement in decarbonization and energy efficiency. In this scenario, clean tech build for power is capped at historical limits, with costs fixed at 2026 levels and no further decline; in buildings and transport, the fuel mix remains unchanged from 2026; in industry, the uptake of recycling and alternative primary production processes is limited. “Clean power” includes renewables and nuclear, and excludes carbon capture and storage (CCS), hydrogen and bioenergy, which are accounted for separately. “Energy efficiency” covers demand-side efficiency improvements and reductions in demand.

CO2 emissions reductions from fuel combustion by measures adopted, Economic Transition Scenario versus “no transition” scenario and Net Zero Scenario

Source: BloombergNEF. Note: The “no transition” scenario is a hypothetical counterfactual that models no further improvement in decarbonization and energy efficiency. In this scenario, clean tech build for power is capped at historical limits, with costs fixed at 2026 levels and no further decline; in buildings and transport, the fuel mix remains unchanged from 2026; in industry, the uptake of recycling and alternative primary production processes is limited. “Clean power” includes renewables and nuclear, and excludes carbon capture and storage (CCS), hydrogen and bioenergy, which are accounted for separately. “Energy efficiency” covers demand-side efficiency improvements and reductions in demand.

CO2 emissions reductions from fuel combustion by measures adopted, Economic Transition Scenario versus “no transition” scenario and Net Zero Scenario

Source: BloombergNEF. Note: The “no transition” scenario is a hypothetical counterfactual that models no further improvement in decarbonization and energy efficiency. In this scenario, clean tech build for power is capped at historical limits, with costs fixed at 2026 levels and no further decline; in buildings and transport, the fuel mix remains unchanged from 2026; in industry, the uptake of recycling and alternative primary production processes is limited. “Clean power” includes renewables and nuclear, and excludes carbon capture and storage (CCS), hydrogen and bioenergy, which are accounted for separately. “Energy efficiency” covers demand-side efficiency improvements and reductions in demand.

Many, many things get electrified

Rising demand makes electricity the world’s largest source of final energy in the coming decades in both of BNEF’s scenarios. Alongside electric vehicles and industry, data centers emerge as one of the fastest-growing drivers of new electricity demand, fueled by the rapid expansion of artificial intelligence. Meeting this demand requires a major buildout of capacity and grid infrastructure, as well as new sources of flexibility – reshaping power markets and investment priorities.

Drivers of electricity demand growth, Economic Transition Scenario

Absolute Growth

Growth Relative to 2025

Source: BloombergNEF

Many, many things get electrified

Rising demand makes electricity the world’s largest source of final energy in the coming decades in both of BNEF’s scenarios. Alongside electric vehicles and industry, data centers emerge as one of the fastest-growing drivers of new electricity demand, fueled by the rapid expansion of artificial intelligence. Meeting this demand requires a major buildout of capacity and grid infrastructure, as well as new sources of flexibility – reshaping power markets and investment priorities.

Drivers of electricity demand growth, Economic Transition Scenario

Absolute Growth

Growth Relative to 2025

Source: BloombergNEF

Many, many things get electrified

Rising demand makes electricity the world’s largest source of final energy in the coming decades in both of BNEF’s scenarios. Alongside electric vehicles and industry, data centers emerge as one of the fastest-growing drivers of new electricity demand, fueled by the rapid expansion of artificial intelligence. Meeting this demand requires a major buildout of capacity and grid infrastructure, as well as new sources of flexibility – reshaping power markets and investment priorities.

Drivers of electricity demand growth, Economic Transition Scenario

Absolute Growth

Growth Relative to 2025

Source: BloombergNEF

Co-authors

With support from

Anastacia Davies

Renewable fuels

Felix Kosasih

Southeast Asia

Sofia Perelli-Rocco

Europe

Rafael Rabioglio

Latin America

Yara van Ingen

Heat pumps

Nick Wang

Other Asia Pacific

William Young

Financial institutions