This realism, emphasized by senior members of the Trump administration, executives from the world’s largest energy companies, and government representatives, was reflected in the prevailing sentiment at the conference: the energy transition has not been moving ahead as expected. While the share of renewable energy in total electricity generation around the world has risen from virtually zero to around 15 percent over the past 15 years, the fact remains that coal and oil energy production reached an all-time high in 2024. Worryingly, the current percentage of primary energy derived from hydrocarbons is almost exactly where it was 20 years ago. Greenhouse gas emissions have also continued to rise in recent years, moving the world further away from the interim targets needed to achieve net zero by 2050.

This underscores the need to balance decarbonization goals with other priorities and to reassess each region’s energy strategy from a more pragmatic stance.

For developing countries, this will mean increasing energy production and consumption to drive economic growth, alleviate poverty, and improve access to healthcare and education. For instance, about 30 percent of the global population relies on biomass for cooking and heating, and around 600 million people in Africa have no access to electricity. Given that most of the world’s population growth—around 2 billion people over the coming decades—will occur in developing nations, this lack of widespread access to energy will hinder economic development and exacerbate migration pressures, worsening an already critical situation. While some regions may make progress by developing renewable sources, insufficient financing and the urgent need to improve living conditions mean that most regions around the developing world will continue to rely on conventional energy sources.

For advanced countries, energy policies must prioritize affordability and security to prevent the costs from becoming affordable and to ensure energy supply under all circumstances. Governments must avoid disruptions, shortages, or sharp price increases. For this to happen, domestic supply chains will need to be strengthened by diversifying energy sources and forging strategic alliances to ensure national security. However, elevated geopolitical and trade uncertainty is currently complicating these efforts.

Looking at Europe, while many CERAWeek speakers praised the progress made so far, others argued that a general desire to decarbonize the economy would be enough in itself to achieve the final targets. Although the growth of the renewable energy segment has enhanced Europe’s energy security—given the region’s limited fossil fuel resources—policy approaches based on mandates and sanctions risk stifling private sector innovation and creativity, potentially harming the region’s competitiveness. Both private sector leaders and European Commission officials raised the idea of relaxing certain regulations, particularly those affecting the gas industry. Therefore, oil and gas will likely play a dominant role for longer than previously anticipated, leading to increased investment in conventional energy supply and infrastructure over the coming years.

"Policy approaches based on mandates and sanctions risk stifling private sector innovation and creativity, potentially harming the region’s competitiveness"

In the United States, which drew the most attention at the conference, the policy shift has been dramatic. Under the new Trump administration, priorities have shifted toward restoring “energy dominance” and dismantling former President Biden’s climate policies, which new Energy Secretary Chris Wright described as “irrational quasi-religious” and that imposed endless sacrifices on our citizens.”

Essentially, the new administration aims to harness the country’s abundance of energy sources by ramping up production and lowering costs for households and businesses, on the path to becoming more competitive and supporting reindustrialization. At the heart of this “drill, baby, drill” strategy is natural gas, due to its abundance and reliability as a dispatchable power source, and because of its critical role in industrial processes such as steel, cement, and iron production. The United States is also looking to leverage natural gas exports as a geopolitical and commercial tool.

The United States happens to be the world’s largest producer of natural gas and also the leading exporter of liquefied natural gas (LNG), a position reinforced by Europe’s pivot away from Russian imports following Russia’s invasion of Ukraine. With the recent lifting of the Biden-era pause on LNG export terminal permits, US exports to Europe and Asia are expected to increase significantly.

The new administration also views national security as a top priority as it looks to dominate in the artificial intelligence (AI) race—which is highly energy- and critical mineral-intensive—as well as in the extraction and processing of these minerals.

"Demand for electricity in the United States could grow by 8 percent by 2030 and by 20 percent over the next decade, driven by industrial reshoring, the electrification of the economy, data center growth, and further AI development"

According to official estimates, after two decades of stagnation, demand for electricity in the United States could grow by 8 percent by 2030 and by 20 percent over the next decade, driven by industrial reshoring, the electrification of the economy, data center growth, and further AI development. More precisely, data center electricity consumption alone could double or even triple by 2028, increasing energy demand over the next five years by an amount equivalent to Texas’ current consumption. To address this, the Department of Energy will prioritize innovation and R&D in fossil fuels and in geothermal, nuclear, and hydroelectric power, which are considered affordable, secure, and reliable sources.

Meanwhile, the US government sees China’s dominance in processing 80 percent of the world’s critical minerals as a significant risk. To counter this, it plans to expand domestic production of key resources such as lithium and nickel, and is weighing up innovative ideas such as creating sovereign welth fund and building metal refining facilities on military bases, coupled with closer coordination with allied nations.

To facilitate energy and mineral production expansion, the administration intends to remove 20–30 percent of regulatory barriers and streamline permitting and siting processes to cut costs and accelerate infrastructure development. Most of the conference delegates concurred that regulatory and environmental barriers are currently the industry’s biggest bottleneck—an argument that resonated with certain European attendees as well.

In short, this year’s conference centered on three key themes. First, the world needs more energy, because developing countries prioritize economic growth and poverty reduction over decarbonization, while developed nations are facing surging electricity demand due to AI, data centers, and industrial electrification. Second, the energy transition should be seen as “additive” rather than “substitutive.” This means investment in conventional energy sources will remain an essential part of the transition—particularly natural gas, which offers reliable power and opportunities to reduce its carbon intensity through technologies like carbon capture, utilization, and storage (CCUS) and direct air capture (DAC), both of which could become commercially viable in the near future. Third, the transition, which involves ambitious commitments that were previously underestimated, will be more complex and costly than initially thought. Furthermore, the pace of this process and the method employed will vary by country.

"The transition involves ambitious commitments that were previously underestimated, making it more complex and costly than initially thought"

Although this year’s discussions painted a more gloomy picture for the future of renewable energy compared to previous years, there are still significant opportunities to be had, despite the current political haze. First of all, certain technologies, such as wind and solar energy, have seen significant cost reductions (70% and 90% over the past decade, respectively), meaning they can now compete with traditional alternatives. Second, the non-negligible risk of a catastrophic climate scenario underscores the need for continued energy transition efforts. Third, massive energy demand from the tech giants, which have substantial financial resources, could provide strong momentum for renewables, provided they continue to pursue their carbon reduction commitments. Last but not least, the involvement of over 230 startups at CERAWeek showcases the strength of AI and private-sector innovation, which have the potential to modernize the electric grid, boost energy efficiency, and accelerate the development of emerging technologies, such as biofuels, advanced photovoltaic systems, small modular reactors (SMRs), and next-generation batteries. As these technologies achieve widespread adoption and commercialization, the energy transition and economic transformation will ultimately reach a scale that is difficult to imagine in today´s environment.