S&P Global’s Horizons: Top Trends 2026 report identifies 2026 as a turning point when the energy transition ceases to be dominated by climate goals and enters a phase defined by physical infrastructure constraints, geo-economic competition, and accelerated demand for electricity driven by artificial intelligence. The main message of the analysis is that the expansion of energy systems and the achievement of sustainability can no longer be viewed as parallel but as interrelated policies that determine the economic competitiveness and geopolitical weight of countries.
In 2026, artificial intelligence will establish itself as a systemic factor in energy demand, rather than a niche technological phenomenon. According to S&P Global forecasts, global electricity consumption by data centers will grow by about 17% by 2026, with average annual growth remaining in double digits at least until the end of the decade. This means that by the second half of the decade, demand from data centers could reach levels comparable to the electricity consumption of entire industrialized countries. This surge in demand makes electricity a potential bottleneck for the development of the digital economy and puts the issue of access to reliable electricity supply at the heart of national growth strategies.
The report clearly shows that the artificial intelligence economy is colliding with its own proclaimed climate ambitions. Although leading technology companies have committed to net-zero emissions, the reality in 2026 is that the speed and cost of energy supply are increasingly taking precedence over sustainability criteria. A significant proportion of companies operating data centers still do not have firm decarbonization targets, and even among those that do, there is growing tension between corporate goals and the physical constraints of the grid and electricity generation capacity. This leads to a forecast that in 2026, a gradual reformulation of some climate commitments will begin, especially in regions with acute electricity shortages and delayed grid investments.
Against this backdrop, 2026 is shaping up to be the year in which annual growth in renewable energy sources shows signs of slowing down for the first time, without this meaning the end of long-term expansion. S&P Global’s analysis predicts that global new solar capacity will see its first annual decline, albeit below 10%, mainly due to the sharp slowdown in China following the shift from guaranteed prices to competitive auctions. This development is key because it shows that the solar sector is entering a more mature phase in which it can no longer rely on ever-increasing volumes but must adapt to a market with tighter margins, higher volatility, and greater importance of flexibility and storage.
However, the report emphasizes that the slowdown in new capacity installation does not mean a structural decline in solar energy. Cumulative capacity will continue to grow rapidly, with global photovoltaic capacity expected to double within five years. The difference is that growth will be more uneven and increasingly dependent on integration with storage systems and the ability of grids to absorb new capacity. This transforms grid infrastructure from a “supporting element” to a critical factor for energy security, competitiveness, and the transition itself.
One of the strongest and most unequivocal predictions in the report is that by 2026, electricity transmission and distribution networks will become the main constraint on the energy transition. In Europe, around 40% of networks are over 40 years old and were designed for a centralized, fossil fuel-based system. At the same time, electrification, decentralized generation, and digitalization require networks with completely different characteristics. The necessary investments are in the order of hundreds of billions of euros by 2030, but the procedures for authorising new power lines and substations remain extremely slow, forcing operators to seek solutions by modernising existing infrastructure and implementing so-called grid-enhancing technologies.
The report predicts that in 2026, the deployment of grid-forming inverters, virtual power plants, digital platforms for distributed resource management, and battery storage systems will accelerate, with these technologies being seen not as an addition but as a key tool for maintaining system stability. In this sense, 2026 marks the beginning of a new phase in which the security of electricity supply and the cyber resilience of networks are seen as elements of national security.
At the same time, the market for long-term power purchase agreements is undergoing a significant transformation. The report expects that in 2026, classic fixed PPAs will increasingly be replaced by hybrid and flexible contracts that combine renewable sources, storage, and various mechanisms for managing and hedging price risk. The reason is the increasing frequency of zero and negative wholesale prices, especially in Europe, which undermines traditional hedging models. This evolution of PPAs reflects a deeper shift, whereby value is no longer generated solely by the energy produced, but by the ability to respond flexibly to market and system conditions.
In the field of clean fuels, the report identifies China as the undisputed leader in the development of green hydrogen. While hydrogen projects in many regions are being delayed or reviewed, China is accelerating the large-scale deployment of electrolysers and building production capacity that exceeds that of the rest of the world combined. In 2026, this will begin to affect not only the domestic market but also global trade, as Chinese companies position themselves as suppliers of both technology and finished products such as green ammonia and methanol. The report predicts that this will strengthen China’s geo-economic influence and present Europe and the US with a difficult choice between strategic autonomy and economic efficiency.
A similar dynamic can be observed in sustainable aviation fuels, where 2026 is shaping up to be a year of slower but more mature growth. Although global SAF capacity is expected to increase by about a third, the market remains extremely small compared to total aviation fuel consumption. Europe will continue to be the region most willing to pay for the decarbonization of aviation, while Asia is establishing itself as a lower-cost production center. This creates a structural tension between political ambitions and economic reality, which is likely to intensify after 2026, when it will become clear which projects can move from announced to actually funded.
The electric vehicle market is also entering a new phase, with 2026 set to be a year of sharp divergence between regions. China is demonstrating that electric vehicles can be price-competitive with internal combustion engines, leading to mass electrification of transport and exporting price pressure to the rest of the world. In Europe, stricter CO₂ standards are temporarily reviving the market, while in the US, the removal of federal incentives in 2026 will test real consumer demand. The report predicts that the result will be more aggressive price competition and restructuring of the automotive industry, with long-term implications for electricity demand and grid infrastructure.
Also particularly significant for 2026 is the issue of carbon accounting and trade policies. The entry into force of the EU Border Carbon Adjustment Mechanism will put the issue of harmonising emissions standards at the centre of global trade. The report expects that in 2026, debates around Scope 2, product-based accounting, and potential trade retaliation measures will intensify, which will increase regulatory uncertainty for companies and influence investment decisions.
Finally, the analysis highlights that 2026 is the year when adaptation to climate risks ceases to be a secondary issue. With global warming increasingly likely to exceed 2.3°C by 2040, extreme weather events are already generating measurable financial losses for businesses and infrastructure. The report predicts that companies that do not integrate physical climate risks into their strategies will become increasingly uncompetitive, and that 2026 will be the moment when adaptation becomes a necessity rather than a choice.
In conclusion, Horizons: Top Trends 2026 presents 2026 as a year of collision between accelerating energy demand, physical infrastructure constraints, and a fragmented geopolitical environment. The main prediction is that the success of the energy transition will no longer be measured solely by megawatts of renewable energy added, but by the ability of systems to deliver reliable, affordable, and increasingly geopolitically determined energy in a world dominated by artificial intelligence and climate risk.
