Energy-importing countries scaling clean energy three times faster than exporters
Energy-importing countries are scaling clean energy three times faster than exporters, as governments seek to reduce reliance on imported oil and gas by expanding domestically produced power, according to the tenth edition of DNV’s Energy Transition Outlook.
Singapore, 7 October 2026 –The disruption to energy supply through the Strait of Hormuz is reinforcing governments’ determination to reduce dependence on imported oil and gas. At the same time, exporting countries outside the Middle East are increasing production to compensate for disrupted supplies, whilst their own decarbonization journeys are increasingly slower compared to the rest of the world.
As a result, the share of non-fossil energy in the primary energy mix of importing regions increased by 2.2 percentage points over the past five years, compared with just 0.7 percentage points in exporting regions. This means China, India, and Europe have collectively shifted towards non-fossil energy more than three times as fast as the Middle East, North America, and Russia.
Prolonged conflict would permanently reduce fossil-fuel demand
The disruption to the Strait of Hormuz has strengthened incentives for importing countries to diversify supply and reduce their exposure to oil and gas, increasing the long-term risks facing fossil-fuel exporters. DNV’s new forecast sees the Middle East supplying around 40% of global oil production in 2050, compared with 50% in last year’s Outlook.
An additional DNV sensitivity analysis examines the impact of the Middle East conflict continuing until 2030, with oil and gas prices remaining moderately elevated during that period. Under this scenario, global oil and gas demand would be 4–6% lower while the conflict persists. Demand would remain 2–5% below DNV’s main forecast for the remainder of the forecast period, indicating permanent demand destruction as consumers and governments accelerate the shift to alternative energy sources.
“Energy security is redrawing the map of the energy transition,” said Ditlev Engel, CEO - Energy Systems at DNV. “Importing regions are accelerating electrification, renewables, and storage to reduce their exposure to the most insecure fossil-fuel markets. Exporters, meanwhile, are responding to today’s shortages by increasing investments and production. The result is a widening divide in the speed and direction of the transition.
While the geopolitical landscape is becoming more complex, there should be no doubt that the energy transition is happening, and that it is already large in scale. However, we must continue to embrace and accelerate it, as everyone is starting to recognize that energy is now part of our critical infrastructure and must be prioritized accordingly”
Technology gap emerging
The gap is widening between competitive mature technologies and emerging technologies reliant on increasingly constrained policy support. Falling costs are accelerating the deployment of solar power, onshore wind, and batteries, whilst more expensive emerging technologies are losing ground. Solar PV and onshore wind are increasingly displacing fossil fuels from power generation, and installed battery capacity has increased 14-fold over the past five years.
However, technologies essential to decarbonizing the hard-to-electrify sectors are not being prioritized due to their high cost and concerns about industrial competitiveness. Compared to last year’s Outlook, the amount of hydrogen and carbon capture and storage in DNV’s long-term forecast are down 29% and 15% respectively. While both technologies are still expected to grow rapidly from a low base, stronger policy support will be needed to bridge the cost gap and accelerate deployment.
Nuclear power is the notable exception among higher-cost technologies. DNV forecasts that nuclear will maintain its current share of global power generation as electrification accelerates. Installed nuclear capacity is expected to grow by 30% over the next decade and by 170% by 2060, despite high costs and supply-chain risks.
“Driven by solar, wind, and increasingly battery storage, electricity is emerging as the clear winner of the energy transition,” said Sverre Alvik, Director of Energy Transition Research at DNV. “The pace of electrification over the next two decades will be more than twice that of the past two decades. Although importing countries are leading the shift, fossil-fuel exporters are also embracing electrification because it delivers greater efficiency and lower costs.”
AI is adding a significant new source of electricity demand. DNV forecasts that global data centre electricity consumption will almost triple from around 400 TWh in 2025 to 1,100 TWh in 2030, with AI overtaking conventional data centre workloads in 2031. However, data centres, including AI, will still contribute less to global electricity demand growth to 2040 than either electric vehicle charging or space cooling. Growth will be concentrated initially in North America, where data centres will absorb around one-third of the increase in power generation to 2030, while in China the power demand growth from data centres is less of a concern.
Current transition pathway leads to 2.3°C of warming
Despite accelerating electrification and renewable-energy deployment, the ambitions of the Paris Agreement are out of reach. DNV forecasts that energy-related emissions will fall by 44% by the middle of the century, putting the world on course for 2.3°C of warming. Net-zero emissions are not expected until the 2090s, and even that timeline is uncertain because it relies on technologies such as direct air capture, which have yet to be deployed at scale.
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About the Energy Transition Outlook
The Energy Transition Outlook (ETO) is DNV’s flagship independent forecast of the global energy system. It provides our view of how energy production, demand, and emissions will evolve through to 2060 globally and in ten world regions. Unlike scenario-based approaches, the ETO model delivers one most-likely trajectory grounded in real-world data, inertia, and feedback loops, with input from over 150 DNV experts and external contributors. Now in its tenth edition, it has become a trusted reference for business leaders, policymakers, investors, and industry stakeholders, its insights reaching over 60,000 readers each year.