A new report from BNEF suggests countries could significantly cut their reliance on imported fossil fuels over the coming decades, as rapid advances in clean technologies and electrification reshape the global energy system. It highlights how recent crises – including the COVID-19 pandemic, the war in Ukraine and conflict in the Middle East – have exposed the vulnerability of fossil fuel-dependent systems, with import-reliant economies particularly affected by price volatility and supply disruption.

Countries including Vietnam, Japan, Indonesia and India paid between 3% and 6% of their GDP on energy imports in 2025. The European Union and China currently spend 2.3% and 2.7% of GDP on energy imports respectively, but will rapidly reduce these liabilities over the next decade, as net exporters such as the US and Saudi Arabia are also forecast to see modest declines in imports.

While energy security concerns may prompt some coal-rich nations to re-emphasise coal use, BNEF says the fuel cannot compete on cost over the long term. It expects its share of power generation to fall to around half of current levels by 2050.

Under this scenario, electricity meets two-thirds of new energy demand over the next 24 years, while natural gas supplies a further 25%, with demand driven largely by electric vehicles (EVs), data centres and other electrification.

One big consumer of electricity is AI. Global data centre capacity reached 84 GW in 2025, consuming 500 TWh of electricity – around 1.9% of total demand – up 20% year-on-year. In the forecast, demand from data centres will more than double to 1,114 TWh (3.6% of total demand) by 2050, representing a 10th of electricity consumed worldwide.

The report expects energy transition timelines to diverge widely by region. China is rapidly electrifying, with electricity already the dominant final energy carrier by 2023. Coal’s share of power generation is forecast to fall from about 54% in 2025 to 19% in 2035 and 7% by 2050. In India, electricity will overtake oil and coal by 2041 despite continued coal use in industry. In Europe, electricity becomes the dominant fuel by 2043, while the US transitions more slowly (by 2047).

The report also predicts that solar will become the world’s largest generator of electricity by 2032, driven by massive overcapacity and falling prices. Additionally, the outlook for battery deployment has increased, with storage jumping 17-fold from 223 GW in 2025 to 3.8 TW by 2035.

David Hostert, Chief Economist at BloombergNEF, commented: ‘We’re living in another moment of crisis, but unlike in past decades, today there are real options for countries to react. We now have viable technologies that can be deployed at scale and fast, at an overall lower cost to the system than the fossil fuel technologies that used to be the primary choice. Through clean power and electrification, we can strengthen energy security and reduce harmful emissions along the way.’

Global energy transition investment reached a record $2.3tn in 2025, but BNEF estimates far higher spending will be needed by mid-century to deliver a fully decarbonised system. That gap was echoed by the International Renewable Energy Agency (IRENA), which warns that current energy systems remain structurally unprepared to meet the 1.5°C climate goal, even if renewable capacity is tripled and energy efficiency doubled by 2030.

Under IRENA’s revised 1.5°C scenario, the share of global energy consumption taken by electricity rises from 23% today to 35% in 2035 and more than 50% in 2050, with most of the increase met by renewables. Over the same period, fossil fuels would fall from around 80% of energy use today to 20% or less in 2050.

IRENA says that whilst electrification is becoming the primary driver of fossil fuel decline across all major sectors, delivering this shift will require a fundamental restructuring of energy infrastructure and investment allocation. Countries must invest in grids, storage and system flexibility to ensure reliable and affordable electricity systems capable of supporting growing demand.

The report finds that infrastructure has become a critical bottleneck, with around 2,500 GW of wind and solar globally awaiting connection to grids. Upgrades by 2035 and 2050 will not be achieved without permitting fast-tracked and investment scaled up. IRENA estimates grid investment needs at $1.2tn per year on average, more than double the $0.5tn invested in 2025. Additional investment will also be needed in hydrogen, alternative fuels and electrification infrastructure, from EV charging to building retrofits and industrial systems.