The global energy landscape is undergoing a profound transformation. According to the New Energy Outlook 2025 by BloombergNEF, renewable energy is set to become the backbone of electricity generation, projected to cover 67% of global power demand by 2050. This marks a significant rise from the 33% share recorded in 2024, highlighting the accelerating shift towards clean energy sources.

However, this positive trajectory coincides with an unprecedented surge in electricity consumption, primarily driven by the rapid expansion of data centres and the widespread adoption of artificial intelligence (AI) technologies. BloombergNEF anticipates a 75% increase in global electricity demand by mid-century, fuelled by digitalisation, transport electrification, and rising cooling needs across emerging economies.

“Incremental electricity demand from data centres will reach 3,700 TWh by 2050, accounting for 8.7% of total final power demand,” states BloombergNEF. This figure positions data centres as a central player in shaping future energy strategies, creating both investment opportunities and systemic challenges for power infrastructure worldwide.

Renewables as the cornerstone of a changing energy mix

The pace of renewable deployment is expected to accelerate sharply in the coming decades. Between 2025 and 2030 alone, global renewable generation will grow by 84%, underpinned by the construction of 6.9 terawatts of solar capacity and 2.6 terawatts of wind power.

Despite macroeconomic pressures, such as fluctuating costs, higher interest rates, and increasing trade barriers—BloombergNEF underscores that “the favourable economics and technological maturity of renewables continue to drive record levels of adoption.”

Yet, integrating such a high share of variable renewable energy into national grids will require a fundamental redesign of energy systems. Flexibility emerges as a critical enabler, with forecasts indicating that by 2050, over 10,400 TWh of flexibility will be needed—split between demand-side management, smart EV charging, and dispatchable assets like batteries and gas peaker plants.

“Grid stability will depend on the rapid deployment of flexibility solutions to complement the rise of intermittent renewables,” warns BloombergNEF, highlighting the urgency for infrastructure upgrades and smarter grid management.

Data centres: Fueling the next energy demand wave

The digital economy’s growth, particularly through data centres, represents a paradigm shift in energy consumption patterns. By 2035, an additional 362 GW of generation capacity will be necessary to meet the rising power needs of these facilities.

Although renewables and storage solutions are set to provide more than half of this capacity, the reliance on fossil fuels remains significant.

BloombergNEF’s analysis reveals that 64% of the incremental generation required for data centres will come from fossil sources, largely due to delays in retiring existing coal and gas plants. “The additional demand from data centres risks prolonging the lifespan of carbon-intensive infrastructure,” the report cautions, raising concerns over emissions trajectories.

Policy Intervention: The Missing Link to Net Zero

While the Economic Transition Scenario (ETS) predicts a 22% reduction in emissions by 2050, this pathway aligns with a global warming trajectory of 2.6°C by 2100, far from the Paris Agreement targets. BloombergNEF stresses that relying solely on market-driven, cost-competitive technologies will be insufficient to achieve deep decarbonisation.

“Policymakers must address harder-to-deploy solutions such as hydrogen, carbon capture, and low-carbon fuels to close the gap towards net zero,” the report asserts. The alternative Net Zero Scenario demonstrates that with just a 15% increase in investment, a Paris-aligned future is attainable—provided there is decisive regulatory support and strategic redirection of capital flows.

Regional opportunities and the call for leadership

Emerging markets, particularly in Asia, the Middle East, and Africa, are identified as hotspots for renewable energy investment due to their projected economic growth and escalating energy demands. However, these regions also face structural barriers, including grid constraints, fossil fuel subsidies, and regulatory hurdles that could slow the pace of clean energy deployment.

BloombergNEF emphasises that “the energy transition will not materialise on its own—governments and private sector leaders must foster conditions that enable renewables to reach their economic potential.” Market reforms, enhanced permitting processes, and investment in grid modernisation are pivotal to unlocking sustainable growth.

A decisive decade ahead

The convergence of digitalisation and decarbonisation defines the next chapter of the global energy transition. While renewables are poised to lead, the mounting demand from data centres and AI underscores the complexity of balancing growth with sustainability.

Without proactive policy frameworks and accelerated deployment of flexibility solutions, the risk is that economic forces alone will fall short of delivering a resilient, low-carbon future. BloombergNEF’s findings serve as a call to action: the pathway to net zero is within reach, but it requires bold leadership and immediate action to align economic growth with climate goals.