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Energy transition: countries perspective

03 Energy transition: countries perspective

Introduction

The energy transition is still far from expected targets:
countries perspectives.

Let’s follow the carbon to understand the net zero question.

Global progress in reaching net zero targets is slow, with only minimal improvement-though China has shown good progress.
Europe has finalized its strategy, adding a competitiveness boost, signaling that economic prosperity is essential to achieving net zero.
China treats net zero as both a planned economic project and a business model, flooding the markets with clean-tech products such as EVs, batteries, rare earth and metals and of course solar panels.
Saudi Arabia invests in net zero using oil revenues, funding projects in renewables and carbon capture.
The United States has abandoned its federal-level net zero aspirations under Trump II, signaling a more conservative path - though some states may pursue different approaches.
European countries are becoming increasingly supportive of nuclear energy as part of their decarbonization strategy.
Worldwide the required investment in the energy transition exceeds $3.5 trillion per year (vs $2.000tn today).

Torben Schuster

Head of Invent Energy Transition & Utilities Germany

With over 20 years of experience in the energy industry, Torben advises both national and international energy and utilities companies on their digital transformation and supports customers in new business models and technologies for the energy industry.

Philippe Vié

Senior Advisor Energy Transition & Utilities, Capgemini

Philippe has led the Capgemini Energy sector and now serves as an advisor for Capgemini, as well as large utilities or equipment suppliers. Philippe has been observing the market for many years and has sponsored the WEMO survey for more than a decade.

Any Akopyan

Manager - Invent Energy Transition & Utilities Germany

With experience in the Dutch and German energy sectors, Any advises international energy players on shaping operating models, addressing flexibility challenges, and navigating regulatory developments.

03 Energy transition: countries perspective

Every nation matters

US and China remain the top global carbon emitters by far driven by their emphasis on economic growth. Emission reductions in the near future appear uncertain, notably in the US. China plans to peak emissions before 2030 and to be net zero by 2060, while the US has reversed previous net zero commitments. Despite their outsized impact, focusing solely on these two nations is insufficient. Achieving global net zero goals demands collective action from all countries, including funding developing countries efforts.

FIGURE 1
Carbon emissions of selected economies 2023 (tons bn)

Sources: ourworldindata; Enerdata

03 Energy transition: countries perspective

One component for reducing emissions is electrification, but this requires modernization of the grid as well as decarbonized electricity. By now, electrification rates among major industrialized nations range from 13% to 25% (target being 50%), with Norway leading due to its reliance on hydroelectricity.

In contrast, countries like China, Australia, and the United States still depend heavily on fossil fuels, particularly coal and natural gas.

FIGURE 2
Electrification rate and electricity mix 2024

Sources: ourworldindata; Enerdata

03 Energy transition: countries perspective

The global struggle to achieve net zero

European countries, although leading the net zero race, face slow progress due to complex regulations, limited subsidies, and for few, a congested grid. Draghi’s report highlights that European companies have ambitious net zero targets but receive limited government support, making it more difficult for them to compete with countries like China dominating the energy market thanks to a huge domestic market and lower labor and supply costs.

FIGURE 3
Energy consumption per capita (2024) [MWh/capita]

Source: Enerdata

03 Energy transition: countries perspective

Other countries, such as the United States and Australia, remain among the top global and per-capita polluter. US carbon emissions have declined slightly, by about 8% since 2019, but under Trump, the country shifted away from its net zero policy. Australia has even seen a slight increase in emissions since 2019, as it continues to rely heavily on coal.

Progress in CO₂ reduction in Norway and Sweden has stagnated since 2019, with Norway’s per-capita CO₂ emissions close to China’s and its per-capita energy consumption being the highest.

FIGURE 4
CO₂ emissions per capita (2024) [tons/capita]

Source: ourworldindata

03 Energy transition: countries perspective

China, on the other hand, views also net zero as a business opportunity and is already a strong contender in the electrification market, However, China's CO₂ emissions have increased by an astounding 400% since 1990 and continue to rise, making China the largest carbon emitter by far.

Saudi Arabia, despite its reputation for its rapid modernization and cutting-edge technologies, has the highest CO₂ emissions and one of the highest energy consumption per capita as it continues to rely heavily on oil. The Kingdom’s CO₂ emissions have been steadily rising since 1990.

FIGURE 5
Evolution of annual carbon emissions [tons bn]

Source: ourworldindata

03 Energy transition: countries perspective

FIGURE 6
Different paths to Rome: Each country has its own roadmap to net zero

Source: ourworldindata

03 Energy transition: countries perspective

Energy transition investments haven’t grown enough

The overall ambition of becoming climate neutral is reflected in global energy investments. Over the past decade, these investments have risen by more than 20%, with a major shift toward clean technologies such as renewables and grids. By 2025, they are expected to reach USD 3.3 trillion (approximately 3.3% of world GDP). In 2024, investments in low-carbon power, especially solar PV, were 50% higher than fossil fuel investments, reversing the trend seen in 2015. However, grid investment has not grown at the same pace, hindered by bureaucratic delays and supply chain challenges.

China is leading the global clean energy push, investing over $625 billion in clean energy in 2024 and achieving its 2030 wind and solar targets early. Yet, amid economic pressures and concerns over energy reliability, China has also increased investments in grid infrastructure and coal power for energy security. Over the past decade, the United States has significantly reshaped its energy investment strategy, reducing fossil fuel investments from 60% to 40% and, boosting investments in renewable manufacturing. However, under President Trump’s current administration, recent cuts to clean energy spending and new tariffs on renewable imports have introduced uncertainty into the sector’s future.

FIGURE 7
Global annual energy investments [USD bn]

Source: iea

03 Energy transition: countries perspective

Meanwhile, the explosive growth of energy-intensive sectors like data centers and artificial intelligence has made energy security and grid efficiency a top national priority. Within the European Union, clean energy investments remain strong, supported by ambitious climate policies, but challenged by other nations’ priorities. In Germany, total investment in renewables has more than doubled from €14.6 billion in 2021 to €38 billion in 2023, before slightly declining to €32 billion in 2024. However, lagging investment in grid (and related projects length) and storage infrastructure hinders further scale-up. Looking at an emerging economy, India has rapidly expanded clean energy investment, with 83% of 2024 power sector funding going to renewables (mainly solar PV), bringing non-fossil capacity up to 44% and attracting the world’s highest development finance funding. Still, challenges like high financing costs, off-taker risk from indebted distribution companies, and inadequate transmission infrastructure continue to hinder projects viability and renewable integration in the country.

To meet global climate goals, the pace of the energy transition must accelerate. While growing investment in renewable power generation is essential and must even grow further, it’s equally important that spending on power grids, storage, other cleantechs and energy efficiency keeps up. These areas are critical to managing the increasing share of renewables in the energy mix and ensuring a stable, reliable, and cost-effective energy system.

FIGURE 8
Annual energy investments per country and sector (2024) [USD bn]

Source: iea

03 Energy transition: countries perspective

Economic prosperity matters to achieve net zero. Sovereignty has become critical with geopolitical troubles.

Recently, the European Union introduced the Competitiveness Compass following the Draghi report, which highlighted the contrast between the European and Chinese approach to net zero targets. China's policy has focused on boosting its economy to dominate the global economy, often at the expense of net zero progress. Nowadays, China's policy is ambitious on climate change and lands also on dominating the clean energy market by providing affordable materials and finished products such as batteries, EVs, solar panels, rare earths and metals, as well as wind turbines, gigafactories, and hydrogen electrolysers. Effectively, China has positioned itself as the world’s primary supplier of clean technologies.

The EU, on the other hand (6.4% of world emissions), has been imposing much more ambitious decarbonization targets and wanted to be front-runner and example for countries. Still, high energy prices have made it difficult for European companies to remain competitive and invest in net zero. The Competitiveness Compass was therefore an extension of the old strategy: Instead of imposing strict targets, it aims to boost competitiveness and support businesses through lower energy prices, grid fees and subsidies.

FIGURE 9
EU imports vs exports of green energy products (2023) [EUR bn]

Source: Europe-data
*Green energy products include solar panels, wind turbines and liquid biofuels

03 Energy transition: countries perspective

The new European strategy also focuses on re-industrialization, that includes modernizing the grid and accelerating investment permitting, as electrification can only add value when grid congestion is alleviated. But as energy grids become increasingly digital, safeguarding this critical infrastructure from foreign access and influence is essential. In this context, Europe’s reliance on Chinese energy technology is considered a growing security risk. Reducing dependency and investing in domestic or allied production of key technologies will be crucial to ensure a secure and resilient energy transition. Europe faces a complex three-dimensional challenge: energy transition × sovereignty × competitiveness (affordable energy prices).

Moreover, there is increasing support for nuclear energy, with some countries (e.g., Denmark, Belgium) rethinking their positions and joining France, which produces roughly 70% of its electricity from nuclear and has much lower CO₂ emissions per capita than its neighbors.

The United States, caught in a trade war with China, had a more robust energy transition policy under President Biden, which was later reversed under President Trump. Trump’s support for EVs (partly influenced by his relationship with Elon Musk) proved inconsistent, leaving the future of American energy policy uncertain and favoring fossil fuels. The latest spending bill proposes significant cuts to green energy incentives, including the early termination of tax credits for clean manufacturing and household technologies, if passed.

Saudi Arabia’s policy, by contrast, is notably ambitious when it comes to net zero. The Kingdom has announced major plans to develop a comprehensive EV ecosystem, establish a civil nuclear power industry, and invest in carbon capture and storage. Interestingly, the same oil revenues that have fueled the Kingdom’s economic success are now enabling greater freedom to experiment with renewable energy solutions.

03 Energy transition: countries perspective

Client story: Overcoming supply chain challenges to accelerate grid expansion

The supply chain challenge

By 2040, more than 80 million kilometers of power lines will need to be built or modernized worldwide. In Germany alone, around 25,700 kilometers of transmission grid are to be constructed by 2045 – with a substantial portion to be delivered by TenneT. This monumental task is triggering a global and intensifying race for raw materials, components, and highly specialized power electronics. But it’s not just about supply chains – it’s about energy security, economic strength, and Europe’s role in a transformed global landscape.

What we need from policymakers

What we need now is an industrial policy framework that enables action and ensures investment security. The expansion of European production capacities – for instance in power electronics, transformers, or direct current technology – must be politically supported through demand-oriented planning, faster permitting processes, clear market conditions, and targeted incentives. This is how we ensure value creation in Europe, reduce dependencies, and strengthen the resilience of our energy infrastructure.

Anyone investing billions in strategic industries needs reliability. In times of geopolitical uncertainty, stable framework conditions are the most valuable currency. Europe must actively promote key technologies for the energy transition – from high-voltage systems and AI to semiconductor manufacturing. This requires a strong European alignment, lean structures, and investments in our technological sovereignty.

03 Energy transition: countries perspective

What TenneT is doing

TenneT has long relied on strong European procurement. Around 75 percent of our directly sourced components and services originate in Europe. This also has a direct impact on domestic value creation. Many of our investments flow back into Germany, as many components are "Made in Germany.“

To counter market price pressures, we rely on long-term framework agreements with selected suppliers. Through strategic partnerships, we share commercial risks. Innovation drives the energy transition – but only if it can scale. The key to this is standardization. Together with our partners, we have developed cables and converter platforms that can transmit two gigawatts – the equivalent of two conventional power plants. What began as an innovation project is now setting the technical standard for grid expansion in Europe. This enables economies of scale, accelerating progress and reducing costs.

75_^%+

of the materials and services are to be sourced from Europe*

*Based on internal estimates, factoring in direct supplies and contractors.

Tim Meyerjürgens

CEO TenneT Germany

Supply chains are a key bottleneck in the energy transition – and often underestimated. Our energy future hinges on the availability and affordability of critical resources. Insights from Tim Meyerjürgens on current challenges and strategic answers.

03 Energy transition: countries perspective

FIGURE 10
We are still far from expected targets, globally

Sources: IRENA-2025, IEA, Statista, World Nuclear Industry Status Report, European Heat Pump Association, Global Heat Pump Market Report 2024, Statistical Review of World Energy-2025, Enerdata, IHA, BNEF, and other secondary sources

03 Energy transition: countries perspective

Our convictions

1

The world is not on track to meet the net zero target by 2050. Countries and regions are balancing climate targets with sovereignty and economic growth (energy competitiveness).

2

Each country has its own net zero journey with local priorities and quite different sets of pillars: be it renewables, nuclear energy, or electrification. This is not a problem if net zero is achieved as soon as possible, and no later than 2050, while also meeting regional conditions (e.g., markets fluidity). But the question is which strategy is the fastest and most effective?

China: High investments to economically dominate clean tech worldwide and subsequently transform its own economy to net zero.
Europe: Renewables or nuclear strategies often combined with complex discussions how to balance priorities best (energy transition vs. industrial strength vs. affordability of energy).
US: Clear focus on industry strength and de-prioritization of net zero ambition.
Rest of the world: use energy transition re-structure and strengthen their own economy (e.g., Australia, Saudi-Arabia).
Developing countries economic growth – THE priority - boost energy demand and emissions.

3

From a technological point of view only PV/ solar power and heat pumps are the only dimensions to be almost on track with ambitions. This indicates a clear dominance of decentralized technologies, which in turn requires:

Acceleration of grid expansion and modernization or
New or more local/ regional energy market designs

4

Economic forces often outpace regulation, especially when regulatory progress is slow, unstable or lacks global alignment.

5

There are great examples of how energy transition works out once right regulations and technologies are combined, e.g., California. However, 2025 also highlighted the vulnerabilities and complexities of renewable energy markets, such as the blackout in Spain.

03 Energy transition: countries perspective

And a call to action…

1

Each state, country, and region must elaborate and publish an ambitious decarbonation roadmap. Related local regulation should enable the ambition, be stable over time, and mitigate barriers to adoption and deployment.

2

In these challenging budgetary times, long-term funding for the energy transition—whether public or private—must be secured.

3

Climate tech competitiveness at scale matters, to unlock profitable investments.

4

Companies, especially international ones, need to redefine their business model to support energy transition, and participate in the newly created business value streams.

5

Active consumer participation in energy savings and efficiency programs should be elevated as a priority.

6

Finally, developed countries must treat funding for the energy transition in developing nations as a sacred commitment.