2026 Global energy outlook: Securing resilience in the energy transition
- By Omer Farooq, Seth Harper, Angela Salmeron, Jeff Willert
- 17 Feb 2026
- 5 min read
In the 2026 Global Energy Outlook, global experts across SE Advisory Services, Schneider Electric's consulting practice, summarize the key trends and market forces expected to shape the global energy market in 2026 and beyond.
Trend #1
“2026 will test resilience, so how can leaders manage cost pressures and stay competitive?”
Economic headwinds: Cost control in an uncertain marketPersistent market volatility is forcing leaders to prioritize margin protection and operational efficiency over aggressive investment. Grid bottleneck and instability remain a challenge, as demonstrated by power outages driving blackouts in Southern Europe in April 2025.
Geopolitical tensions, tariff uncertainties, and fragmented policy frameworks have amplified instability, making fixed pricing harder to secure and investment decisions more cautious. Forward-thinking organizations are adopting layered hedging strategies that combine flexible contracts, financial instruments, and real-time market triggers to stabilize energy budgets
The increasing share of renewable energy in the generation mix is driving greater intraday volatility in spot market prices. As a result, organizations must move beyond traditional procurement strategies and focus on managing their actual power load.
AI and automation are increasingly adopted to reduce overhead, improve forecasting accuracy, and enhance operational efficiency, even as concerns about cybersecurity and data integrity temper adoption.
What are practical steps for leaders?
Design a risk strategy
Assess your organization’s risk profile and define a structured approach that balances cost control with sustainability objectives.
Develop robust governance
Ensure the right decision-making processes are in place to manage internal expectations regarding the goals of the procurement strategy. Build a structure to protect and maintain governance across teams.
Leverage market intelligence
Use research and analytics to anticipate commodity price swings, tariff changes, and supply disruptions, enabling informed procurement decisions.
Get more expert insights on economic headwinds
Trend #2
“AI is reshaping energy demand – and frugal AI offers a smarter path forward.”
AI acceleration: AI boom reshapes energy demandWith 40% of near-term U.S. growth driven by data centers, and AI demand rising 4-6x by 2030 (reaching ~500 TWh), AI is reshaping energy demand, creating pressure on grids and sustainability performance. As these capabilities grow exponentially, investments in the supporting infrastructure are surging in parallel – case in point, the U.S. AI Action Plan in June 2025, boasting USD 500 billion investment in the “Stargate” project.
As organizations face mounting pressure to “do more with less,” frugal AI emerges as an efficient, purpose-built alternative mindset – which offers a path to scale digital intelligence without compromising decarbonization and sustainability goals.
Rising carbon emissions, water dependency, and regulatory uncertainty combine with grid strain as AI demand surges.
While a challenge, frugal AI could also be a rising solution to energy efficiency and ecosystem resilience. For example, leveraging AI for predictive load management and grid balancing offers utilities and large energy consumers a chance to cut costs, improve reliability, and integrate more renewable energy sources.
What are practical steps for leaders?
Ask yourself
Does AI truly add value to this process, feature, or product? Are we building this solution just so we can say our product is "AI-enabled", or is it because the AI enables new capabilities, diminishes friction, or enhances the experience.
Audit all AI workloads
Identify where smaller, task-specific models or traditional machine learning can replace resource-heavy generative AI systems without sacrificing performance.
Set energy-intensity benchmarks
Measure energy and water consumption patterns and efforts to optimize performance.
Choose low-carbon infrastructure partnerships
They offer renewable energy sourcing, advanced cooling technologies, and transparent reporting to minimize Scope 2 emissions.
Get more expert insights on AI acceleration
Trend #3
“Climate risk isn’t just an ESG checkbox: it’s a bottom-line issue.”
Climate risk: Extreme conditions challenge energy reliabilityThe physical impacts of climate change cost the global economy at least USD 1.4 trillion in 2024. Developing a climate risk and adaptation strategy has become a business imperative, not only to meet regulatory requirements worldwide but to safeguard operations and manage supply price volatility. Extreme weather events risk damaging critical infrastructure that energy systems depend on, such as power plants, substations, and transport links.
Increasingly, volatile weather patterns transform how energy systems are designed and procured. Widespread power outages are reminders that reliable grid electricity supply is not guaranteed.
Yet companies can gain an edge through advanced climate risk modeling and expanded weather monitoring to prepare for resilience efforts and energy planning. Fostering a resilient and diversified supply chain also strengthens performance and adaptability.
In a world with highly varying degrees of regulatory action on climate change, businesses may be exposed to high levels of physical as well as transition risks and should prepare accordingly.
What are practical steps for leaders?
Identify compliance and disclosure gaps
Stay ahead of shifting climate regulations, reduce legal risk, and ensure reporting systems are ready for new requirements.
Assess physical risks at each site and quantify transition risks
Fully understand operational exposure, future cost impacts, and vulnerabilities across energy-intensive assets.
Develop an integrated adaptation and transition plan
They will guide investments, strengthen resilience, and mobilize suppliers to support decarbonization and long-term stability, taking into account the local context.
Get more expert insights on climate risk
Trend #4
“From renewables surpassing coal to regulatory shake-ups: see how 2025 reshaped energy.”
Transition planning: Resilient operations require flexibilityIn 2025, the journey to net-zero entered a grounded implementation phase – despite the U.S. retreat from clean energy policy, the global commitment to decarbonization remains strong. For the first time in history, renewable energy overtook coal as the leading source of electricity generation worldwide. This translates into shifting energy use from fossil fuels to electricity and securing supply in a world where grid connection approvals and renewable variability pose new challenges.
Transition planning – the strategic process companies undertake to shift from carbon-intensive operations to more resilient, low-carbon models – thus emerges as the new standard for leadership.
2026 brings regulatory uncertainty, high investment needs, grid and tech gaps, and growing cyber risks that can strain costs, competitiveness, and operational stability.
However, the rapidly evolving landscape offers opportunities for companies to capture value through flexible energy procurement, clean energy partnerships, stronger carbon‑pricing strategies, and cybersecurity solutions monitoring energy, automation, and AI-driven initiatives. All of this is supporting confident investment in future-ready infrastructure that boosts competitiveness and resilience.
What are practical steps for leaders?
Assess transition readiness
Evaluate your decarbonization progress, emissions tracking systems, and preparedness for emerging disclosure requirements.
Map clear decarbonization pathways
Leverage PPAs, onsite renewable generation, clean‑tech investments, battery storage, small nuclear reactors (SMRs), and efficiency measures, to accelerate progress.
Align procurement and investments with transition goals
Prioritize efficient systems, electrification, and partnerships for renewable, hydrogen, or nuclear solutions to future‑proof operations against regulatory and supply chain risks.
Get more expert insights on transition planning
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