Multidimensional Transition

The global energy system has been in continuous transition for centuries, but it is the current transition that has everyone talking.

Developments over the last three years have shaken expectations of a linear global transition as climate goals compete with economic development, energy access, energy security and affordability. We are beginning a multidimensional transition: a multispeed, multifueled and multi-technology transition with different road maps and end points for different countries. 

The world has been in “energy addition” mode for decades. The primary energy mix has barely changed, from 86% hydrocarbons in 1997 to 82% at present, while energy consumption has increased 55% in the same period. This is why we are yet to see a peak in global emissions. At the same time, climate change is having a visible impact, with the most vulnerable people being the most heavily affected. 

As demonstrated by the contributors to Volume 6 of Look Forward, energy is essential for economic growth and for the well-being of populations. The events of the last few years have made it clear that there cannot be an energy transition without energy security. Wars, polarization and political division are challenging governments and the private sector to secure energy supplies while also securing investments for this transition. 

COP28 declared the goal to “transition away from fossil fuels in energy systems,” but doing so will take decades. Today, nearly 3 billion people still depend on traditional biomass sources for cooking and heating. For many, access to energy, or “carbonizing,” is likely the first step before “decarbonizing,” with natural gas a viable option to deliver fast and deep decarbonization. New technologies are expected to significantly and rapidly reduce methane emissions associated with natural gas production. 

Clean energy technologies in various stages of deployment provide a road map to reducing emissions. Electrification of the world's vehicle fleet is gaining momentum, yet progress remains concentrated on select markets. Solar and wind are already being deployed at scale, and S&P Global analysis shows that capacity could double globally by 2037. 

Hydrogen is fast emerging as a vector for clean energy delivery. Consensus continues to grow on the need for carbon-removal technologies to meet net-zero targets, with projects under development forecast to increase CO2 capture capacity tenfold by 2030. The consumption of materials will expand alongside populations and GDP. Choosing the right mix of low-carbon materials will be an essential component of the energy transition. This transition will likely be an evolution — energy systems are made of hardware that takes decades to change. Although in early stages, advancements in AI have the potential to accelerate the pace of this evolution. 

The role of carbon markets will become increasingly important as voluntary and compliance markets converge. The availability of money is a significant barrier, especially for investments in energy access and for energy transition in the Global South. 

This edition of Look Forward provides in-depth analysis of the major geopolitical, technological, financial and regulatory drivers that are shaping the direction and pace of this multidimensional transition. Our goal is not to offer recommendations or conclusions but to highlight a wide spectrum of issues and opportunities and consider what is needed to bend the emissions curve. We hope this research will contribute to the overarching endeavor of understanding and meeting the challenges of the energy transition.

About the S&P Global Research Council 

The S&P Global Research Council includes senior leaders from all our divisions and Sustainable1 who work together to connect our content and expertise across the company to develop actionable insights for markets and establish S&P Global as the premier research leader on key strategic themes.

Council Members have identified the trends and themes that present opportunities and challenges for the company and our customers. The 2024 Key Themes are: