Nuclear Fusion & Efficiency: What is the Energy Transition?
Energy accounts for more than three quarters of total greenhouse emissions globally according to the IEA.
Reducing such a large amount of emissions is important to limiting global warming in line with global policy and science, like the Paris Agreement and SBTi Corporate Net Zero Standard.
The energy transition is the structural shift from fossil-based energy to a system aligned with a net zero pathway by mid-century.
Progress is tracked at the country level by the World Economic Forum’s Energy Transition Index (ETI), which benchmarks 118 economies on system performance and transition readiness.
IEA Executive Director Fatih Birol says: “By delivering on the goals agreed at COP28 – including tripling renewables and doubling energy efficiency improvements by 2030 – countries worldwide have a major opportunity to accelerate progress towards a more secure, affordable and sustainable energy system.
“The IEA will continue to support governments around the world in efforts to achieve this.”
How much progress has been made?
The 2025 ETI found that energy equity and sustainability indicators improved on the back of easing prices, lower energy and emissions intensity and a higher share of clean energy.
However, readiness momentum has slowed and security gains have been more limited.
An investment outlook from the IEA predicts clean energy spending is set to break further records in 2025.
The IEA’s Renewables 2024 projects that 5,500 GW of new renewable energy capacity will be online by 2030, with around 95% of this growth from solar and wind.
It also shows that at least 1,650 GW of renewable projects are already in advanced development but waiting for a grid connection, so network upgrades and flexibility could make a big impact on growth.
This is more capacity than the entire power system of China.
Benefits of the energy transition
The IEA estimates that renewables saved EU consumers around €100bn (US$116.5bn) on electricity bills in 2023.
It also expects renewables to meet all additional global electricity demand growth through 2026, making them important in stabilising supply.
Energy efficiency also has an important role to play, as reducing demand for electricity could help to lower costs and exposure to volatility.
The IEA’s World Energy Outlook says that countries advancing clean energy strengthen their energy sovereignty and reduce vulnerability to fuel price volatility.
The energy transition’s challenges
The IEA’s grid analysis warns that connection queues and under-investment in transmission and distribution could strand renewable and storage projects unless planning, permitting and regulatory frameworks are adjusted.
It also says that higher wind and solar shares could increase curtailment risk unless systems deploy more flexibility like long duration storage and responsive demand.
According to the 2025 ETI, more than 90% of clean energy investment since 2021 has gone to advanced economies and China.
This is despite 80% of demand growth being in emerging markets.
The energy transition also relies heavily on critical minerals like lithium, nickel, graphite and copper used for the storage, generation and transmission of energy.
Critical mineral refining is highly geographically concentrated and the IEA warns of supply risks.
How businesses approach the energy transition
Perhaps one of the most dramatic transformations is from Ørsted, known before 2017 as DONG Energy.
It was founded in 1972 as an oil and gas business but began to focus on renewable energy around 2009.
In 2017, it decided to phase-out the use of coal for power generation and sold its oil and gas business to Ineos.
Now, Ørsted focusses exclusively on wind power.
Despite not being an energy company itself, from 2010 to 2024 Google signed more than 170 agreements to purchase more than 22 GW of clean energy generation.
In August 2025 it began a collaboration with Tennessee Valley Authority and Kairos Power to help deploy a new advanced nuclear reactor.
“To build clean and resilient energy systems, we need strong communities,” said Kate Brandt, Chief Sustainability Officer at Google, on LinkedIn.
“This collaboration aims to help to revitalise the Oak Ridge community's legacy of nuclear innovation, create high-paying jobs, and provide educational opportunities through partnerships with the University of Tennessee and other local colleges.
“This work is such a great example of the power in bringing together technology, business, and community, three key components to solving the biggest challenges of our time.”
Google has also invested in and supported TAE Technologies, a company aiming to commercialise energy from nuclear fusion.
The company has raised nearly US$1.3bn in equity capital and achieved a number of breakthroughs that could bring significant volumes of carbon free energy to the grid in the near future.
