Atlantic Council 2025 Global Energy Agenda: Energy Security, AI Demand, and Geopolitical Transition

Overview of the Atlantic Council 2025 Global Energy Agenda

The Atlantic Council’s 2025 Global Energy Agenda arrives at a pivotal moment for global energy policy. Now in its fifth edition, this annual publication from the Global Energy Center brings together leading voices from industry, civil society, and government to illuminate the most pressing challenges and opportunities shaping the world’s energy future. The 2025 Global Energy Agenda addresses a landscape fundamentally transformed by democratic political transitions, the emergence of AI as a transformative force, and persistent geopolitical tensions that continue to reshape energy markets.

The scale of political transformation that unfolded across the democratic world in 2024 sets the stage for the entire publication. When the Group of Seven (G7) convenes under new Canadian leadership, nearly every major democratic government will reflect a different political orientation than just two years prior. This shift to the right across multiple democracies has profound implications for energy policy, climate commitments, and the pace of the global energy transition.

Complementing the collection of expert essays, the Atlantic Council Global Energy Center’s annual global energy survey provides data-driven insights into how energy leaders and policymakers view the road ahead. For professionals tracking the intersection of energy policy, technology, and geopolitics, this report offers indispensable analysis and foresight.

Geopolitical Shifts Reshaping Global Energy Policy

The 2024 electoral cycle produced a seismic shift in the political landscape governing global energy policy. Elections across major democracies—from the United States to the European Union and beyond—resulted in governments that prioritise economic competitiveness, energy affordability, and national security over ambitious climate timelines. This political realignment is not a rejection of the energy transition per se, but rather a recalibration of the pace and priorities through which it will be pursued.

The implications for the international climate architecture are substantial. The Paris Agreement framework, which relies on nationally determined contributions (NDCs) and voluntary ambition ratcheting, faces a more challenging political environment. New governments are more likely to emphasise technology-neutral approaches, support continued fossil fuel development alongside renewables, and resist policies perceived as economically punitive or job-destroying in traditional energy sectors.

For energy investors and corporations, this shift creates a more complex but potentially more pragmatic operating environment. Policy continuity becomes less certain, but the emphasis on energy security and reliability creates stronger investment signals for diversified energy portfolios. The 2025 Global Energy Agenda’s expert essays explore how this new political reality will shape everything from trade policy to infrastructure investment over the coming decade.

The International Energy Agency (IEA) has noted that regardless of political orientation, the fundamental drivers of the energy transition—cost competitiveness of renewables, air quality concerns, energy independence motivations—remain powerful forces that transcend electoral cycles.

Energy Security in an Era of Fragmentation

Energy security has returned to the centre of global policy discourse with a force not seen since the 1970s oil crises. The ongoing repercussions of Russia’s invasion of Ukraine continue to reverberate through European energy markets, while new geopolitical flashpoints—from the Middle East to the South China Sea—threaten critical energy supply chains and maritime chokepoints.

The 2025 Global Energy Agenda examines how nations are responding to this heightened security environment through diversification strategies, strategic reserve policies, and accelerated deployment of domestic energy resources. European nations have made remarkable progress in reducing dependence on Russian natural gas, but this achievement has come at significant economic cost and has increased reliance on LNG imports from the United States, Qatar, and other suppliers.

The concept of energy security itself is evolving. Traditional definitions focused narrowly on the availability and affordability of fossil fuels, but the modern energy security framework must encompass critical mineral supply chains for renewable technologies, cybersecurity of increasingly digitised energy infrastructure, and the resilience of electricity grids integrating high shares of variable renewable generation.

Supply chain vulnerabilities have emerged as a critical dimension of energy security. China’s dominance in solar panel manufacturing, battery production, and critical mineral processing creates dependencies that many nations are now actively seeking to reduce through industrial policy, trade agreements, and domestic manufacturing incentives. The energy security imperative is thus becoming a powerful driver of both traditional and clean energy investment.

AI and the Unprecedented Surge in Global Energy Demand

Perhaps the most transformative development addressed in the 2025 Global Energy Agenda is the intersection of artificial intelligence and energy demand. The release of generative AI models has triggered an infrastructure buildout of historic proportions, with data centres expanding at rates that are fundamentally altering electricity demand projections across major economies.

Global data centre electricity consumption is projected to double by 2030, driven primarily by the computational requirements of AI training and inference workloads. Major technology companies are committing tens of billions of dollars to data centre construction, with many projects specifically designed to support AI operations that require continuous, high-density power supply.

This surge in energy demand creates both challenges and opportunities for the energy transition. On one hand, the sheer scale of additional electricity required threatens to increase fossil fuel consumption if clean energy deployment cannot keep pace. On the other hand, technology companies’ corporate climate commitments are driving significant investment in renewable energy procurement, nuclear power restart and expansion, and advanced energy storage technologies.

The Atlantic Council highlights that the US-China AI competition adds a strategic dimension to energy demand. Both nations recognise that energy availability is a potential bottleneck for AI development, making reliable and affordable energy supply a matter of technological and economic competitiveness. This linkage between AI dominance and energy infrastructure represents a new frontier in the strategic competition between major powers.

Renewable Energy Transition: Progress Amid Political Headwinds

The renewable energy transition continues to advance despite the challenging political environment described throughout the 2025 Global Energy Agenda. Solar and wind energy have achieved cost competitiveness with fossil fuels in most markets, and global renewable capacity additions continue to set records. The fundamental economics of clean energy—declining costs, improving technology, and growing scale—provide a powerful momentum that transcends political cycles.

However, the pace of deployment faces significant challenges. Permitting and grid connection bottlenecks remain the most critical barriers to renewable energy expansion in many jurisdictions. The time required to obtain permits for new wind and solar projects, and to build the transmission infrastructure needed to connect them to demand centres, often exceeds the time needed to construct the projects themselves.

The energy transition also faces a growing “implementation gap” between policy ambitions and real-world deployment. While many nations have set ambitious renewable energy targets, the practical challenges of grid integration, land use conflicts, supply chain constraints, and local opposition are slowing progress. The International Renewable Energy Agency (IRENA) has emphasised that current deployment rates, while historically unprecedented, need to accelerate substantially to align with net-zero pathways.

Energy storage represents a critical enabler of the renewable transition that is receiving increasing attention. Battery costs have fallen dramatically, but the scale of storage needed to support grids with high renewable penetration remains a formidable challenge. Long-duration energy storage technologies—including green hydrogen, compressed air, and advanced battery chemistries—are attracting growing investment but remain years from commercial-scale deployment.

LNG Markets and Natural Gas as a Global Energy Bridge

Liquefied natural gas (LNG) markets feature prominently in the 2025 Global Energy Agenda as a critical component of global energy security and the transition strategy. The massive expansion of LNG infrastructure since 2022—including new import terminals across Europe and export capacity additions in the United States, Qatar, and Australia—has reshaped global gas trade patterns and pricing dynamics.

The debate over natural gas’s role in the energy transition remains contentious. Proponents argue that gas serves as an essential bridge fuel, providing reliable baseload power while renewable capacity scales up and enabling the displacement of more carbon-intensive coal generation. Critics contend that new gas infrastructure creates lock-in effects that delay the transition to fully clean energy systems and that methane emissions from the gas supply chain significantly reduce its climate benefits relative to coal.

The Atlantic Council’s analysis suggests that the answer varies significantly by geography and economic context. For developing nations seeking to expand electricity access and industrial capacity, natural gas may represent the fastest path to both economic development and emissions reduction relative to coal. For advanced economies with mature electricity grids, the case for new gas infrastructure is more nuanced and depends heavily on the availability and cost of alternatives.

Market dynamics are also evolving rapidly. The oversupply of LNG expected from 2025-2027 as major new projects come online could reduce prices and reshape competitive dynamics between gas and renewables. This price environment will test the economic resilience of both new LNG investments and renewable energy projects competing for the same electricity demand.

US-China Energy Competition and Strategic Implications

The 2025 Global Energy Agenda identifies the US-China competition as a defining force shaping the global energy landscape. This competition extends far beyond traditional fossil fuel geopolitics to encompass clean energy technology manufacturing, critical mineral supply chains, nuclear energy deployment, and now the energy infrastructure needed to support AI development.

China’s dominance in clean energy manufacturing—controlling over 80% of global solar panel production and a majority of battery manufacturing capacity—has created strategic vulnerabilities that the United States and its allies are actively working to address. Industrial policies including the US Inflation Reduction Act, the European Green Deal Industrial Plan, and similar initiatives across democratic nations aim to build domestic manufacturing capacity and reduce dependence on Chinese supply chains.

The AI dimension adds urgency to this competition. Both nations recognise that energy availability could become a binding constraint on AI development, particularly for the massive computing infrastructure required for training frontier models. The United States benefits from abundant natural gas and growing renewable capacity, while China’s coal-dependent energy mix faces both carbon constraints and efficiency challenges for high-density computing applications.

Nuclear energy has re-emerged as a strategic technology in this competitive landscape. Both nations are investing heavily in advanced nuclear technologies, including small modular reactors (SMRs) and next-generation designs that promise improved safety, reduced costs, and flexibility to serve both grid power and industrial heat applications. The US Department of Energy has made nuclear energy acceleration a priority, recognising its potential to provide the reliable, carbon-free baseload power needed for both AI infrastructure and broader decarbonisation goals.

Climate Finance and Clean Energy Investment Trends

Despite political headwinds, global clean energy investment continues its upward trajectory. The 2025 Global Energy Agenda notes that clean energy investment surpassed fossil fuel investment globally, a milestone that reflects the fundamental economic attractiveness of renewable technologies and the scale of capital flowing into the energy transition.

However, the distribution of clean energy investment remains highly concentrated in advanced economies and China, with developing nations receiving a disproportionately small share of investment relative to their energy needs and climate vulnerability. Addressing this financing gap is critical both for global climate goals and for ensuring that the energy transition does not deepen existing economic inequalities between nations.

Climate finance mechanisms—including green bonds, blended finance structures, and multilateral development bank investments—are scaling but remain insufficient to meet the estimated annual investment needs of developing countries. The Atlantic Council’s analysis emphasises the importance of de-risking mechanisms that can attract private capital to markets where sovereign risk and policy uncertainty currently deter investment.

The role of institutional investors is evolving as well. Pension funds, sovereign wealth funds, and insurance companies are increasingly allocating capital to clean energy infrastructure, attracted by the long-term, inflation-linked returns that renewable energy assets can provide. However, evolving regulatory frameworks and political uncertainty in some markets are creating headwinds for long-term investment commitments.

Global Energy Survey: Key Findings and Industry Insights

The Atlantic Council Global Energy Center’s annual global energy survey provides a valuable data-driven complement to the expert essays. The survey captures the perspectives of energy industry leaders, policymakers, and analysts on the most pressing challenges and likely trajectories for global energy over the coming years.

Key survey findings reflect the tension between optimism about clean energy technology progress and concern about implementation challenges. Respondents consistently identify permitting and grid infrastructure as the most significant barriers to renewable energy deployment, ahead of technology costs or public acceptance issues. This suggests that the energy transition is increasingly constrained by institutional and regulatory capacity rather than technological limitations.

The survey also reveals growing recognition of AI’s transformative impact on energy demand. A significant majority of respondents anticipate that AI-driven electricity demand growth will materially affect energy planning and investment decisions over the next five years. This finding underscores the speed at which AI has moved from a peripheral consideration to a central factor in energy sector planning.

On the geopolitical front, survey respondents express heightened concern about energy supply disruptions from geopolitical conflicts, with the Russia-Ukraine war and Middle East tensions ranking as the top risk factors. The survey data suggests that energy security concerns are increasingly influencing corporate investment strategies, with companies prioritising supply chain resilience and geographic diversification alongside traditional economic and environmental considerations.

Policy Recommendations and the Energy Landscape Ahead

The 2025 Global Energy Agenda offers several critical policy recommendations that reflect the complex interplay of security, economic, and environmental objectives facing energy policymakers. First, the report emphasises the need for pragmatic, technology-neutral energy policies that leverage all available tools—including renewables, nuclear, gas, carbon capture, and efficiency—to achieve both security and climate goals. Ideological rigidity in favour of any single technology pathway is increasingly seen as counterproductive.

Second, the agenda calls for urgent action on permitting reform and grid modernisation. The bottleneck in connecting new generation capacity to demand centres represents one of the most addressable barriers to the energy transition, and governments that successfully streamline these processes will gain significant competitive advantages in attracting clean energy investment.

Third, the Atlantic Council stresses the importance of international cooperation on critical mineral supply chains, energy technology standards, and trade frameworks that avoid protectionist escalation while ensuring supply chain security. The risk of energy fragmentation—where geopolitical blocs develop incompatible technology standards and restricted trade flows—could significantly increase the cost and slow the pace of the global energy transition.

Fourth, the report highlights the need for integrated energy-AI policy frameworks that address the electricity demands of AI infrastructure while ensuring that this growth supports rather than undermines climate objectives. Governments should work with technology companies to co-locate data centres with clean energy resources, invest in grid infrastructure to support high-density demand clusters, and develop regulatory frameworks that incentivise efficient energy use in computing.

Looking ahead, the 2025 Global Energy Agenda presents a world where the energy transition continues but at a pace and through pathways that look different from previous expectations. The combination of political realignment, AI-driven demand growth, persistent security concerns, and evolving technology landscapes creates a dynamic and uncertain environment that demands agility, pragmatism, and sustained investment from all stakeholders in the global energy system.