The energy transition’s next chapter: 4 implications

The energy transition has entered a new phase with an increasing emphasis on energy security and affordability. This reflects the fact that access to energy underpins economic vitality and human prosperity. Yet the increased carbon emissions associated with meeting the world’s energy needs risk undermining those very gains.

That said, the energy transition remains a fundamental secular shift. It is important to note that there is no single transition, but multiple country and regional transitions unfolding with differences in pace and technology choices.

The question now is not whether these transitions will continue, but how and at what pace. The world is on track to reach a level of warming that significantly exceeds 2°C above preindustrial levels, and momentum on climate action is weakening in some countries.

Moving forward at pace, therefore, requires three reinforcing efforts: accelerated deployment of commercially viable decarbonisation technologies, encouragement of collective policy and public support, and preparation for a warmer world through smarter adaptation.

The following summary, based on our publication The Energy Transition’s Next Chapter, helps stakeholders make sense of four profound implications stemming from major shifts in the global energy system.

Implication 1: We need to reduce the overall cost and accelerate the build-out of enabling infrastructure

The cost of delivering large-scale grid infrastructure has increased about sixfold since the last major build-out, driven primarily by permitting delays, labor constraints, rising technical complexity, and supply chain bottlenecks. This is the case not only for electricity grids, but more broadly across all energy infrastructure. This pressure now risk slowing the energy transition and raising end-user costs. Reducing cost and accelerating delivery will require a combination of five levers:

• Stress-test current demand and supply scenarios to ensure that we build the infrastructure truly needed in a changing energy landscape.
• Unlock more capacity from existing assets by applying advanced analytics, modernised risk frameworks, and dynamic operations, while making smart tradeoffs between performing targeted upgrades and deferring large-scale overhauls.
• Urgently accelerate permitting to help lower risk premiums while ensuring robust public engagement and environmental safeguards.
• Improve capital project execution through more standardised design, tighter project controls, and greater strategic engagement between customers and suppliers to scale reliable supply chains for items with long lead times.
• Reevaluate prior design choices (such as underground cable versus overhead line, and DC versus AC configurations) in light of recent cost escalations, to ensure that legacy decisions still make economic and operational sense.
  
  

Implication 2: We can accelerate progress by doubling down on proven technologies and placing strategic bets

Roughly two-thirds of energy-related emissions can be addressed using commercially available technologies, especially in parts of power generation and in electrifying certain end uses. The transition’s success will hinge on what is already “in the money” and on which business cases that are not yet “in the money” can be strengthened through clear and stable policy frameworks. Technologies like wind, solar, and EVs have benefited from this kind of support for decades, and largely still do.

The impact can be material: gasoline demand falls by 19,000 barrels/day (or diesel demand by 24,000 barrels/day) for every one million EVs that take to the road. BCG modeling shows that as the EV market expands, CO₂ emissions from light-duty vehicles could drop by nearly one-third by 2035. There is a similar opportunity to facilitate the development of solutions for harder-to-abate parts of our emissions. Gas power with CCUS, for instance, is projected to be economically viable by 2035 under a carbon price of $125/tonne, a gap that can be closed today through carbon contracts for difference.

Implication 3: Energy affordability and customer agency are essential to sustain public support for the transition

The credibility of the energy transition depends not only on cost reductions, but also on who pays, and how. In many countries, non-generation costs such as grid charges, levies, and taxes make up more than half of residential electricity bills. When these costs are passed through via flat-rate or regressive structures, they disproportionately burden lower-income households and small businesses.

But affordability isn’t just a constraint to manage, it’s also a lever for change. When consumers are empowered to shape their energy use—through flexible pricing, rooftop solar, community energy, or participation in demand-side markets—they become allies in the transition. Demand-side activation is not an optional add-on, but core infrastructure for transition success.

Implication 4: The transition will vary across countries and regions—and strategies must follow suit

The core pillars of the energy transition are universal: maximise energy efficiency; scale renewables; deploy low-carbon firm power; build grids; decarbonise industry through electrification, CCUS, and low-carbon fuels; and capture or offset residual emissions.

But the sequence, pace, and mechanisms for delivering these goals will vary widely—shaped by each country’s starting point, resource endowment, industrial base, institutional capacity, and market structure. Consequently, strategies must be tailored—not just at the national level, but in many cases regionally and locally.