Energy 2026: geopolitics and climate fuel a race for cheap, stable, clean power

The World Economic Forum (WEF) has published an article titled Global energy in 2026 will be marked by growth, resilience and competition, citing the International Energy Agency (IEA)’s outlook that global energy investment in 2025 is on track to exceed US$3.3 trillion.

Of that, US$2.2 trillion is expected to flow into clean-energy technologies—ranging from renewables and electric vehicles to power grids, energy storage, efficiency and cleaner fuels.

In other words, two-thirds of every dollar spent on energy is now going towards cleaner options, even as climate discourse has been sidelined compared with the focus on security and affordability.

In 2026, climate pledges may again lack prominence, but attention is set to centre on energy-risk management—framed around three themes: growth, resilience and competition.

China cements its position as a clean-energy superpower

Across sectors in 2026, the first target is growth driven by industrial competition. These policy moves are becoming a central mechanism of the energy transition.

Many governments are shifting away from older approaches and leaning more on policy tools such as regulations that grant specific advantages, tax credits, subsidies and trade measures—aimed at moving the whole system forward, rather than simply building more solar or wind capacity as in the past.

The clean-energy race belongs to China, which is spending almost as much on clean energy as the United States and the European Union combined. China therefore leads manufacturing across much of the clean-energy and advanced-energy supply chain, reinforcing its status as the world’s clean-energy superpower.

India prepares to surge in clean energy

India, meanwhile, is described as increasingly ambitious and rapidly advancing in the same race. The government has rolled out multiple policies, including incentives for domestic manufacturing and requirements related to clean-energy use. 

The push goes beyond solar deployment and large-scale storage to include investment in manufacturing.

One example is the Dhirubhai Energy Complex, scheduled to begin operations in 2026, with the goal of co-locating factories producing solar panels, batteries and large-scale electrolysers.

Europe reshapes industry to restore competitiveness

As Europe reviews its industrial model to regain competitiveness, the Net-Zero Industry Act aims to ensure that by 2030, at least 40% of demand is met by technologies that can be produced within the EU. 

The bloc is also moving to recycle more critical materials and to restrict exports of permanent magnets and metal scrap in an effort to reduce reliance on external supply chains.

Energy-infrastructure security returns to the top of the agenda

Geopolitical tensions have pushed energy security back to the top of the policy agenda, making resilience the second major theme for 2026.

China continues to strengthen the resilience of its energy infrastructure and expand leadership in new technologies. Europe is pivoting away from Russian fuels, with the stated objective of eventually ending reliance on Russian gas, oil and nuclear energy. 

The United States is working to diversify supply and reshore the production of lithium, cobalt, nickel and rare earths.

At the same time, resilience increasingly includes economic and social stability—from traditional hedging against oil and gas supply risks to ensuring affordable access and system flexibility in the face of newer threats such as cyber risks, climate impacts and supply-chain volatility.

Public attention has shifted to immediate impacts—near-term benefits such as community livelihoods and lower electricity bills—in exchange for accepting wind farms, transmission lines, factories or data centres.

Artificial intelligence and energy in 2026

Rapid growth in energy demand from the AI industry is creating an energy “bottleneck” driven by the massive electricity needs of data centres. This surge is reshaping corporate priorities.

According to Bloom Energy’s 2025 Data Centre Power Report, access to power has become the single most important factor in choosing a data-centre location—overtaking traditional concerns such as digital-network connectivity.

In practice, this means competition will intensify in 2026 over grid capacity and flexible power options—centred on affordability, reliability and low carbon intensity.

Any investment destination that can offer large volumes of cheap, reliable and clean electricity will enjoy a structural advantage in attracting AI-driven investment.

The energy transition becomes more competitive

All of this points to 2026 as a year defined less by fresh pledges and more by competition for advantage in an increasingly politicised, complex energy landscape. 

Success will require a form of resilience that fits local realities—delivering energy that is affordable, stable and environmentally responsible. Crucially, these benefits must be clearly demonstrated in real projects for them to endure, which is far more complex than simply telling an environmental story.

As a result, governments may place less emphasis on climate commitments this year and focus more on protecting industry and future jobs—such as in batteries, hydrogen, data centres and clean-tech manufacturing.

Looked at another way, it is still a pathway to the energy transition, but with a different narrative.