The new annual report from BloombergNEF projects a 75% increase in electricity demand by 2050 under the Economic Transition Scenario, driven by economic growth, electric vehicles, and data centers
The energy transition is becoming increasingly complex. With shifting demand trends, the rise of renewables (and the decline of coal), and a changing climate, defining the long-term future is no easy task. Each year, BloombergNEF attempts to chart a path forward with its flagship outlook: the New Energy Outlook (2025), a scenario-based analysis of how the energy economy may evolve across all sectors—electricity, industry, buildings, and transport.
New Energy Outlook 2025
The 2025 edition of BloombergNEF’s annual New Energy Outlook offers a detailed look into the evolving energy landscape:
- Economic Transition Scenario (ETS): This scenario outlines how the energy system could evolve in a world where investment decisions are driven primarily by the need to meet rising energy demand through a cost-competitive mix of technologies—rather than climate concerns.
- Net Zero Scenario (SNZ): First introduced in last year’s report, this scenario examines how the transition would unfold if all policies were fully aligned with the Paris Agreement and its net-zero emissions targets.
The rise in energy demand under the ETS
In this context, BloombergNEF projects a sharp rise in electricity demand—up 75% by mid-century. For comparison, global electricity demand hit a record 29,471 TWh in 2023, marking a 2.2% increase over the previous year.
This surge will be driven by several key forces: economic development, the electrification of end uses, rising cooling needs, and the growing use of artificial intelligence.
“Growing economies in Asia, the Middle East, and Africa account for much of this increase,” said David Hostert of BNEF, lead author of the report. “These are the regions where the biggest investment opportunities in energy infrastructure will emerge.”
Data centers as energy drivers
A key driver of rising electricity demand is the rapid expansion of data centers. In emerging markets, their energy use could grow six to sixteenfold over the next decade. But the trend is global.
BloombergNEF estimates that by 2035, data centers will account for 4.5% of global electricity consumption under the ETS scenario—equivalent to 1,200 TWh. Meeting this demand would require an additional 362 GW of new power capacity within ten years. By 2050, this share could nearly double to 8.7% (3,700 TWh).
“Overall,” the analysts write, “this share will be lower than that of electric vehicles (11.2% in 2050), but higher than the load from air conditioning and heat pumps, which is expected to reach 7.1% by 2050.”
The United States stands out as the world’s largest data center market, with a projected share of 8.6% in sector electricity use by 2035.
Fossil fuels and renewables in the economic transition
As electrification accelerates, global oil demand is expected to peak in 2032 at 104 million barrels per day, led by a decline in road transport fuels starting a few years earlier. By 2050, oil consumption is forecast to fall to 88 million barrels per day—a meaningful drop, but still insufficient to meet net-zero targets.
Outside road transport, oil remains resilient. Demand for aviation fuel is set to double, and the petrochemical sector will also expand substantially by 2050.
Coal use is projected to decline rapidly, while natural gas demand will grow by 25%, reaching 5,449 billion cubic meters by mid-century.
When it comes to electricity generation, fossil fuels will supply just 25% of the global mix by 2050, down from 58% in 2024.
Renewables dominate in cost-driven transition
In the ETS scenario, renewables gain a stronger foothold thanks to increasing cost competitiveness. Global renewable electricity generation is expected to increase 84% by 2030, and then double again by 2050.
By mid-century, renewables are projected to supply 67% of global electricity demand, up from 33% in 2024.
The report also highlights a massive increase in grid flexibility, powered by new technologies. By 2050:
- Over 4,300 TWh of demand-side flexibility will be enabled by smart EV charging and demand response programs;
- An additional 6,100 TWh will come from dispatchable sources such as batteries, gas turbines, and pumped hydro.
The New Energy Outlook 2025 also projects electric vehicle sales to skyrocket—from 17.2 million in 2024 to 42 million in 2030, and eventually 80 million in 2050.
New Energy Outlook 2025: the emissions
“Our modeling suggests that 2024 may have marked the peak year for emissions, which means 2025 could be the first year of structural emissions decline—excluding anomalous years like 2020 or 2009. While many advanced economies have already seen structural emissions reductions driven by clean energy growth, this would be the first time such a turning point is observed at the global level.”
Yet, under the ETS, progress remains insufficient. BloombergNEF estimates that CO₂ emissions will decline 22% by 2050 – returning to 2005 levels – but still aligning with a global temperature rise of 2.6°C by 2100 with 67% probability.
