Energy industry eyes long-term transformation despite short-term turbulence

The global energy sector is undergoing a fundamental transformatio. Despite short-term uncertainty caused by geopolitical tensions, inflation, and policy fluctuations, confidence in the long-term trajectory of the energy transition remains strong. According to DNV’s '2025 Energy Industry Insights' survey, nearly 70% of energy professionals are optimistic about the industry's future. This outlook is underpinned by three major megatrends — electrification, digitalisation, and decentralisation — which are reshaping how the world generates, distributes, and consumes energy.

Electrification: decarbonising demand

Electrification is central to the energy transition, enabling the decarbonisation of high-emission sectors such as transport, heating, and industry. As electricity becomes the dominant form of energy, its share in final energy demand is expected to rise significantly. DNV forecasts that electricity will account for more than 50% of final energy use by mid-century, up from roughly 20% today.

This growth is being accelerated by the electrification of transport, notably the rapid uptake of electric vehicles (EVs), and the proliferation of electricity-hungry technologies including AI, data centres, and smart devices. These changes are placing unprecedented demands on energy infrastructure. According to industry projections, grid capacity must expand by over 250% by 2050 to accommodate rising consumption and integrate variable renewable energy sources such as solar and wind.

This presents a dual challenge: upgrading ageing infrastructure while deploying new technologies to manage more dynamic, decentralised networks. The transition also opens vast opportunities for innovation in grid modernisation, flexible generation, demand response, and long-duration energy storage.

Digitalisation: enhancing efficiency and resilience

As the energy system becomes more complex and distributed, digitalisation is emerging as a critical enabler of efficiency and resilience. Technologies such as artificial intelligence, the Internet of Things (IoT), digital twins, and big data analytics are being deployed to improve real-time decision-making, reduce operational costs, and enable smarter grid management.

Lucy Craig, Director of Growth, Innovation and Digitalisation at DNV, explained: “Adopting a whole systems perspective is essential. It’s about integrating energy generation, storage and use across an increasingly complex, decentralised network.”

Digital tools are also vital to the emergence of autonomous energy systems, where real-time monitoring, predictive maintenance, and automated control improve both reliability and sustainability. Investment in digitalisation remains strong, with 59% of industry professionals planning to increase digital spend, according to DNV’s survey. This long-term trend reflects a broader shift towards intelligent, adaptable energy systems capable of responding to both market signals and climate variability.

Empowering localised energy solutions

Decentralisation, the third pillar of the transition, is reshaping the traditional top-down energy model. Microgrids, distributed energy resources (DERs), and community energy projects are enabling greater energy autonomy at the local level. These systems not only reduce transmission losses and improve resilience during grid disruptions, but also empower communities to participate directly in the energy economy.

This shift is especially important in regions with unreliable grid infrastructure or high exposure to climate-related risks. Distributed systems backed by energy storage, ranging from lithium-ion batteries to green hydrogen, enable a more flexible and responsive energy architecture. They also support net-zero ambitions by reducing reliance on centralised fossil fuel generation.

Government policies and market incentives are helping drive the growth of decentralised solutions. For example, feed-in tariffs, tax credits, and capacity markets are encouraging investment in behind-the-meter assets. But scaling these models requires clear regulatory frameworks, new financing mechanisms, and robust digital platforms for coordination.

A strategic vision for a low-carbon future

While current macroeconomic headwinds have prompted caution, particularly around near-term investments, the long-term strategic direction of the energy industry is unwavering. Electrification, digitalisation, and decentralisation are not speculative trends — they are foundational shifts already in motion.

As Ditlev Engel, CEO of Energy Systems at DNV, succinctly put it: “Despite this uncertainty, our industry remains focused on the long-term vision. As a whole, we are committed to building a resilient, low-carbon energy system that minimizes emissions, is affordable and sustainable, while meeting the world’s growing energy demand.”

Realising this vision will require coordinated efforts across industry, government, and civil society. It will also demand sustained investment in infrastructure, innovation, and inclusive policies that ensure the benefits of the energy transition are broadly shared.