Energy transition progress check, reasons for optimism and urgency | Net Zero Technology Trends 2025

In the first issue of our net zero technology trends series for 2025, Net Zero Technology Centre CTO Luca Corradi lays out the many reasons to be cheerful about the world’s progress towards a net zero future while reminding us of the pressing need to do more and do it faster.

Gauging the direction of travel in the energy transition is a challenging balance between positive and negative progress.  

There is reason for great optimism about the future of the energy system. The world now invests almost twice as much in clean energy – $2Tn – as it does in fossil fuels, the impacts of which are beginning to be felt. The UK’s electricity generation from fossil fuels has more than halved in a decade, while renewables has doubled to a record 45% share, with a further 13% from nuclear. The same can be said for the EU, where in 2024 wind and solar electricity generation has overtaken fossil fuels for the first time ever.  

Meanwhile, China, the largest emitter of CO2 in the world, shows signs of a plateau and potential peak in emissions, spurred by a record 500 TWh growth in non-fossil power generation in 2024 – more than the total power generation of Germany. 

Yet, the need for an acceleration in the energy transition has never been more pressing. The Paris Agreement goal was to keep the long-term global average surface temperature increase to well below 2C above pre-industrial levels and pursue efforts to limit the warming to 1.5C. Nearly a decade on, the World Meteorological Organization announced that warming in 2024 has temporarily exceeded this 1.5C target. 

This was accompanied by emissions of CO2 – despite a decade of relative plateau – reaching a record 37.4 Gt in 2024, 0.4 Gt higher than the previous record set in 2023. Despite great strides in decarbonising electricity generation and increased electrification across the economy, the share of fossil fuels in the overall global energy mix remains high at 80%, only a 2% drop since 2013. The UK is not far ahead at 71.8% (albeit a record low). 

The stubbornly high fossil fuel share is largely driven by increased demand in emerging markets and developing economies growing at 2.6% every year over the last decade. This has enabled an increased industrial output of 40%, bringing about increased standards of living. Efficiency gains from electrification have resulted in falling energy intensity of GDP: in short, it is taking less and less energy to fuel economic growth. 

Matching optimism with realism

Optimism surrounding the significant progress made – and that can be made – must provide the energy to urgently address the extensive challenges we still face.

On one hand, it is just over five years since the UK signed the Climate Change Act committing the UK to net zero by 2050 and we have reduced our emissions by 53% since 1990. On the other hand, the Climate Change Committee – the UK independent climate watchdog – states that only around one third of the emissions reductions required to meet the 2030 UK target are covered by credible plans.

Policy commitments by governments around the globe put the world on course for 2.4C of warming by 2100. To meet the International Energy Agency’s Net Zero Emissions Scenario, emissions need to fall by 15% per year between 2030 and 2050. This is a rapidly closing opportunity requiring a rapid increase in both ambition and action: stated policies result in emission reductions of just 1% per year from 2030.

That is a dose of realism. But there is cause for optimism. The energy transition has consistently occurred faster than historical predictions. 

Exponential thinking

Multiple annual outlooks of the future – such as those by the International Energy Agency – have consistently raised their forecasts for renewable energy and electrification whilst reducing their forecasts for fossil fuels and emissions. 

This signals a need to shift our perception of what is possible in the future and move from thinking about growth linearly to a more exponential view. 

The clearest example of this thinking in action is that solar and wind have scaled up faster than any other sources of electricity in history. These took just 8 and 12 years respectively to scale from 100 TWh to 1000 TWh. For context, gas generation took 28 years, coal 32 years, and hydropower 39 years. 

The same exponential growth can be seen across other clean technologies, such as EV sales and battery storage. If the same growth can be applied to emerging technologies such as hydrogen, alternative fuels, carbon capture and storage, and floating wind, then a successful energy transition is wholly possible.

AI continues to beat expectations

Perhaps the best example of exponential growth is artificial intelligence, which has been a top technology trend for the past five years yet whose pace of change still surprises. In 2024, leading manufacturer of AI chips, Nvidia, solidified its position as the world’s most valuable company. Yet already in 2025, the launch of Chinese AI chatbot, DeepSeek, saw Nvidia lose about 17% – or $593bn – of its market value, a record one-day loss for any company. Reportedly trained for around $6mn – compared to the billions spent by rival companies – could prove a tipping point in the development of low-cost AI.

The opportunity for the energy sector is vast, whether through reducing generation costs through demand management, discovery of optimised materials for carbon capture, or enabling predictive maintenance of assets. Already, 47% of energy companies say they will use AI-driven applications in their operations in the year ahead.

There are, however, concerns about the risks of AI and one of them is the substantial energy it requires. The UK Prime Minister has announced the intention for Great Britain to become a powerhouse in AI, targeting an expansion of the UK’s compute capacity by at least 20x by 2030. Data centres are forecast to only account for 10% of total global electricity demand growth by 2030, but they tend to be spatially concentrated, leading to increased local impact.  For comparison, large data centres can have a power demand equivalent to that of an electric arc furnace steel mill, but steel plants are less likely to be clustered in the same geographic area. The sector has already surpassed 10% of electricity consumption in at least five US states. In Ireland, it now accounts for over 20% of all electricity consumption.

The second issue is control, particularly concerning generative AI. Efforts to avoid the “black box” problem are ongoing, ensuring that the suggestions, recommendations and decisions of generative AI are both correct and ethical is crucial. There is a need to instil ethics into AI, and the ethical values and priorities of humanity are not homogeneous. The country where AI is developed has an impact on the ethical decisions it will make. This has led to international competition and we risk moving from a Cold War of competing ideologies to a new Cold War of competing AIs with different moral and ethical values. 

Conflicting political landscapes

The same increasing dynamism can be seen in the political landscape. In 2024 we saw around half the world’s population going to the polls (over 50 countries) and a rise in ‘greenlash’ – backlash to green policies – has been evident across the globe, particularly in the US.  

2025 has already seen the US’s withdrawal from the Paris Agreement, a pause on spending of funds through the Inflation Reduction Act, and an indefinite ban on leasing of US federal waters for offshore wind projects. Whilst the actual impacts of such decisions on the energy transition are uncertain, it has set a clear precedent for the world’s largest economy. 

Despite this, there is cause for great optimism, particularly in the UK. Energy Secretary Ed Miliband’s ambition to achieve a decarbonised power system by 2030, alongside the launch of GB Energy in Aberdeen, sets a strong foundation. Headquartered in the UK’s energy capital and backed by £8.3 billion in funding, GB Energy is uniquely positioned to accelerate transformative solutions. 

As it begins its initial investments this year, GB Energy has the potential to act as a catalyst for innovation, driving the scale-up of technologies, improving efficiency and reducing costs.  

But it must be supported by streamlined planning processes and competitive funding to deliver results. Stable, predictable policies are crucial to attracting long-term investment. 

Preparing for the future

It is impossible to predict the future. But you can prepare for it. And with 35% of the emissions reductions required for 2050 coming from technologies not yet commercially available, gaining insight into emerging technologies is essential for futureproofing your organisation. Over the next few weeks, we’ll be covering net zero technology trends for 2025 in the following technology areas: renewables and grid, hydrogen and alternative fuels, industrial decarbonisation, carbon capture and storage and digital. Look out for those insights and more on LinkedIn and at www.netzerotc.com.