Key takeaways
- Volatile oil prices and surging electricity demand highlight the urgent need for a diversified energy mix to safeguard economic and energy security.
- The need for diversified energy sources is rapidly reshaping global power generation. Renewables and advanced technologies are projected to supply the majority of global electricity by 2100.
- Overall, increased global investment in renewables, including nuclear, solar and wind, is paving the way for a more stable and resilient future.
Recent volatility in oil prices, largely fueled by geopolitical conflicts, has exposed the risks of overdependence on a narrow set of energy sources. Reliance on limited commodities for energy generation leaves economies vulnerable to price shocks and supply disruptions, impacting sectors from manufacturing to technology.
Meanwhile, the demand for consistent and reliable power is surging, driven by the rapid expansion of data centers, electrification and domestic manufacturing. J.P. Morgan Global Research projects electricity demand will grow by over 2% annually for the next five years, up from just 0.5% over the past decade.
The need for a diversified energy mix to mitigate risk and build resiliency is reshaping global power generation. Today, innovations in nuclear, solar, wind, geothermal and energy storage are not only transforming the global energy landscape but also paving the way for a more stable and sustainable future.
Total energy demand by fuel, 2015-2050, based on stated policies
Projections based on stated policies from global governments show renewables outpacing all other sources of energy by 2050. EJ = exajoule.
Projections based on stated policies from global governments show renewables outpacing all other sources of energy by 2050. EJ = exajoule.
The nuclear renaissance: Fusion reactor technology
Global investment in nuclear energy is growing thanks to its reliability and low-carbon profile. “The nuclear resurgence is being driven by three key factors: increased electricity demand fueled by AI, concerns over energy security and goals for decarbonization,” said Jean-Xavier Hecker, head of EMEA Equity Sustainable Investing Research at J.P. Morgan. “Together, these factors are driving demand to unseen highs.”
Global nuclear generation is expected to reach record highs in 2026, with the International Energy Agency (IEA) projecting 75% increase in capacity by 2050 compared to current levels. This growth will be driven both by new reactors and lifespan extensions for existing assets. 2025 saw more than 410 reactors operating in over 30 countries and 63 reactors under construction.
As more reactors are built, safety and longevity are top priorities. “Fusion has a key focus of R&D for future nuclear developments due to its safety advantages over fission technologies,” said Alan Hon, head of Asia Power, Utilities and Renewables Research at J.P. Morgan. “Unlike fission, fusion doesn’t produce radioactive waste products, making it a cleaner source of energy than historical nuclear power. It’s also a self-contained process that minimizes risk of adverse reactions and meltdowns.”
“The nuclear resurgence is being driven by three key factors: increased electricity demand fueled by AI, concerns over energy security and goals for decarbonization. Together, these factors are driving demand to unseen highs.”
Jean-Xavier Hecker
Head of EMEA Equity Sustainable Investing Research at J.P. Morgan
There are 182 fusion facilities globally, 103 of which are operational in R&D experimental contexts; this number will continue to grow, with 19 additional facilities under construction and 60 planned around the world. However, there are roadblocks to widespread fusion adoption; chief among them is the technical barrier of sustaining plasma at over 100 million degrees Celsius.
“A majority of fusion projects currently being built are still R&D facilities, and most industry participants don’t expect fusion to deliver electricity to the grid until roughly 2035,” Hon said. “Commercial viability is expected closer to 2040.”
Here comes the sun: Solar power forecast
According to Bloomberg Finance, global (ex-China) growth in solar energy is expected to reach 30% year-over-year in 2026, divided into two distinct categories: distributed and utility-scale solutions. 58% of all solar capacity comes from utility-scale solutions that supply power directly to the grid, including solar farms and concentrating solar power plants. “Solar energy is positioned for growth at utility scale, where the industry is trending toward larger, more complex projects,” said Mark Strouse, a senior equity analyst for U.S. Clean Energy, Power Infrastructure and Sustainable Investing at J.P. Morgan. “We project U.S. utility-scale solar to grow at a roughly 3% compound annual growth rate through 2035.”
Utility-scale projects account for the larger share of current solar capacity but distributed solar is also set for rapid expansion. Distributed solar photovoltaics (PV) are smaller-scale systems, built close to where power is consumed, such as residential rooftop solar panels or ground-mounted panels for commercial and industrial use. Virginia Martin Heriz, global coordinator of Sustainable Investing Research at J.P. Morgan, sees significant growth over the next five years. “Decreased costs for solar modules have likely promoted greater deployment, and cumulative capacity is expected to grow by 160% by 2030 under current policy expectations, from a 2024 baseline, according to the IEA,” Heriz said.
Other opportunities for growth in solar energy are theoretically taking power generation to the skies. Space-based solar power (SBSP) envisions large satellites collecting continuous sunlight while in orbit, then transmitting energy back to Earth via safe microwave or laser links.
The concept of SBSP is still in the research phase, and there are hurdles to clear to achieve extraterrestrial solar power generation at scale. Currently, Gallium Arsenide (GaAs) solar cells are used for space applications due to their high efficiency and resistance to radiation and temperature extremes. However, GaAs modules are significantly more expensive to produce than terrestrial silicon cells and are not available in commercially viable quantities, introducing supply chain risks.
Additional roadblocks for SBSP include the high cost to transport infrastructure into orbit. “The main barrier for economic viability for this technology is the cost of the rocket launch,” said Hannah Lee, head of APAC equity thematic and sustainable investing research at J.P. Morgan. “At this point, SBSP isn’t cost-competitive with terrestrial solar. But in the long-term, the expanding new frontier of space economies could help make small-scale SBSP solutions an economically viable source of power by the 2040s.”
Where the wind blows: Onshore and offshore wind
Forecasts show global (ex-China) wind installations maintaining steady growth in the near term, increasing 16% in 2026, 17% in 2027 and 12% in 2028. This includes both categories of wind energy: on-shore, where turbines are located on land, and offshore, where turbines are installed in bodies of water.
“Onshore wind turbines are typically easier to install and maintain than offshore. And the initial investment creates long-term energy generation because modern turbines are built to last upward of 30 years,” said Strouse.
By comparison, offshore wind can be difficult to install and maintain, due to the need for complex underwater machinery and maritime vessels. “Upfront costs are typically much higher for offshore wind than onshore wind, but in the long term offshore generates greater power due to stronger, more consistent winds,” Strouse said. “We remain bullish on offshore wind projections.”
The U.K. remains the largest offshore wind market outside of China and continues to grow its wind generation capabilities. In early 2026, the U.K. Department of Energy awarded contracts to 12 wind projects that are expected to generate over 8,000 MW of electricity, a record volume for offshore wind. Roughly 1.7 GW of these projects are expected to start producing electricity by 2029.
In the U.S., growth in wind energy has experienced delays due to policy and regulatory changes. But there are opportunities for expansion. Policy changes have reduced the timelines for solar and wind projects to receive tax credits, but updated safe harboring rules allow developers to lock in tax credits for up to four years, which provides visibility through 2030. According to Environmental Impact Assessment (EIA) data, significant wind capacity is planned to enter service in the U.S. through the end of 2027, totaling 22 GW of additional capacity.
Rock solid: Geothermal energy generation
Geothermal energy generation harnesses heat from below the surface of the Earth to create electricity. “Unlike solar and wind, geothermal isn’t an intermittent resource, which means it isn’t impacted by climate or seasonality. The power generated by geothermal is more predictable and continuous,” Heriz said. Geothermal plants display the highest capacity factor — or ratio between actual power produced and maximum possible power production — of any power source. This makes geothermal an ideal baseload source for consistent energy generation.
Geothermal has the greatest capacity factor of mainstream power sources
Geothermal energy has the highest ratio between actual power produced and maximum possible power production in a given period of time.
Geothermal energy has the highest ratio between actual power produced and maximum possible power production in a given period of time.
There are several types of geothermal energy generation:
- Conventional: Conventional geothermal energy generation requires drilling in areas where the Earth’s crust is thin to access naturally occurring reservoirs of hot water or steam. Hot water is then used to power turbines and produce energy. While conventional methods are effective, they require access to naturally occurring reservoirs, which are limited.
- Enhanced geothermal systems (EGS): EGS create fissures in hot rocks through hydraulic fracturing. Water or other fluid is circulated through the fissures and then brought to the surface to generate electricity. This method differs from conventional geothermal because it creates a hydrothermal reservoir, rather than relying on naturally occurring reservoirs.
- Closed-loop geothermal systems (CLGS): Circuits of sealed pipes are installed to act as underground heat exchangers with hot rock. This sealed system allows circulating fluid to absorb heat and transfer it to the surface to generate electricity with relatively high output productivity and low water consumption. Like EGS, this method isn’t limited to locations with natural hydrothermal reservoirs.
Conventional geothermal currently accounts for roughly 1% of global energy demand, largely due to high upfront costs compared to solar and wind. However, with the right incentives and investments, the IEA estimates that conventional geothermal capacity could rise from 15 GW in 2023 to 22 GW by 2030. By 2050, this will likely increase to almost 60 GW or 8% of global electricity.
EGS and CLGS solutions are expected to help drive down upfront costs for geothermal energy generation from $230/MWh to $30/MWh by 2050, with lower drilling costs accounting for most of the reduction. This dramatic decrease would make geothermal a more competitive, cost-effective source of low-emission baseload electricity.
Save it for later: Energy storage systems
“Energy storage systems enable a smoother transition to a low-carbon energy mix because they allow for the balancing of intermittent power generation.”
Mark Strouse
Senior equity analyst for U.S. Clean Energy, Power Infrastructure and Sustainable Investing, J.P. Morgan
As global energy needs increase, so has demand for energy storage systems (ESS). ESS technology allows energy to be stored at scale for redeployment at a later time, making it a valuable strategy for increasing energy resiliency. This is particularly true as renewables like solar and wind supply a greater percentage of global energy, and power from these sources fluctuates over time (e.g. decreased solar energy generation at night).
Battery shipments for ESS nearly doubled in 2025 thanks to growing policy support in China and strong order momentum in Europe. In 2026, J.P. Morgan analysts expect global ESS installation to increase by 30%.
In Europe, the outlook for ESS demand remains bullish, with ICCSino forecasting 46% year-over-year growth in ESS shipments to the EU in 2026. The need for grid stability is a major contributor to this growth as rapid deployment of renewables has outpaced grid flexibility. “ESS enables a smoother transition to a low-carbon energy mix because it allows for the balancing of intermittent power generation,” Strouse said. “The storage solutions can compensate for fluctuating power supply from renewables by redeploying energy when needed.”
ESS demand in the U.S. is primarily driven by grid strains caused by data center deployment. To address tight power supply conditions and mitigate increased electricity consumption, data centers are increasingly integrating ESS solutions to manage peak load and increase resilience.
As the global energy landscape evolves, the imperative for diversification has never been clearer. By investing in a broad mix of renewables and advanced storage solutions, economies can better withstand volatility, reduce risk and build lasting resilience.
Energy independence and resiliency
The firm’s Security and Resiliency Initiative is a $1.5 trillion, 10-year plan to facilitate, finance and invest in industries critical to national economic security and resiliency. This includes a focus on energy independence and resilience, including subindustries across nuclear, solar, wind, geothermal and battery storage systems.
Learn more about the Security and Resiliency Initiative.
References
https://www.iea.org/data-and-statistics/data-product/world-energy-outlook-2025-free-dataset
https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2025/Jul/IRENA_TEC_RPGC_in_2024_2025.pdf
https://www.energy.gov/ne/articles/what-generation-capacity
https://world-nuclear.org/our-association/publications/world-nuclear-performance-report/global-nuclear-industry-performance
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