Countries that import energy are switching to renewables at a pace fossil-fuel exporters haven’t come close to matching, driven by mounting urgency to insulate domestic economies from volatile supply chains. Importing regions, including India, China and Europe, shifted away from fossil fuels roughly three times more aggressively over the past five years than the Middle East, Russia, and North America combined, a gap that DNV’s latest energy transition outlook expects to keep widening.
That divide has sharpened since the Strait of Hormuz closure, with Ditlev Engel, CEO of Energy Systems at DNV, saying geopolitical pressure over energy supply is reshaping the speed and direction of the transition. Importers are doubling down on clean power and grid storage to shrink their dependence on volatile markets, he said, while exporters are channeling investment into raising production rather than lowering emissions.
DNV has revised its long-term fossil-fuel outlook accordingly, pulling its estimate for the Middle East’s 2050 oil production share down to 40%, versus the 50% penciled in twelve months ago. Its conflict-continuation scenario models fighting persisting until 2030, putting a 4–6% dent in worldwide oil and gas consumption for as long as hostilities continue. Demand would then settle 2–5% under the group’s main trajectory for years afterward, suggesting the behavioral shift outlasts the crisis itself.
Within the transition, the gap between emerging and mature technologies is increasing. Solar panels, land-based wind farms, and grid batteries are all moving down the cost curve fast enough to crowd fossil fuels out at scale, while installed battery storage capacity has multiplied fourteen times over in five years. Both hydrogen and carbon capture are losing ground in DNV’s new projections, cut 29 percent and 15 percent respectively from last year’s outlook on cost and competitiveness grounds.
Nuclear power stands apart from that pattern, with DNV projecting that installed capacity will expand roughly 30 percent over the coming 10 years and nearly triple by 2060, underpinned by firm low-carbon baseload demand as more of the economy runs on electricity. Even so, nuclear is expected to hold rather than grow its share of global power generation as overall electricity demand expands.
Artificial intelligence is reshaping electricity demand projections, with DNV seeing worldwide data-center electricity use climbing from 400 TWh in 2025 to roughly 1,100 TWh by 2030, nearly three times current levels, as AI-specific demand surpasses traditional computing loads by the early 2030s. North America will absorb the sharpest increase, with data centers accounting for roughly one in three additional kilowatt-hours generated in the region through the end of the decade.
As energy demand skyrockets due to expanding AI and other industries, different energy sources, such as fusion energy being developed by businesses like American Fusion Inc. (OTCQB: AMFN), are likely to displace fossil fuels in the energy mix of different countries.
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