BNEF summit: Spain blackout, Trump, AI and the future of "clean" energy

The threats to the ongoing transformation of the global energy sector are varied today, ranging from tariffs and market instability to the rise of artificial intelligence and geopolitical tensions. Despite the current turbulence, driven mainly by US President Donald Trump’s trade and climate policies, continued emissions reductions are inevitable. These were the conclusions of the recent BNEF energy summit in New York, attended by government officials, corporate representatives and major industry players.

According to BNEF researchers, global investment in the energy transition surpassed two trillion dollars for the first time last year, and "clean" energy sources are now competitive with coal- and gas-fired generation in most of the world. The summit in New York took place during the blackout in Spain, which highlighted the vulnerability of power grids and revived debate about the role of renewables in the energy mix.

The Spanish blackout was one of the five main topics on the first day of the summit, particularly because of its scale, comparable to the massive power outages in Texas in 2021 and Puerto Rico in 2017. COP30 President André Aranha Corrêa do Lago said the event showed the need to consider energy security and the energy transition together.

"We cannot focus on one or the other. We must complete the transition while ensuring energy security," Corrêa do Lago said.

Confusion caused by Trump

Another major topic at the summit was the recent actions of returning US President Donald Trump. According to summit participants, however, the tariffs he has imposed are far from the only problem for decarbonisation. They also pointed to the reduced emphasis on renewables and the shift in focus towards developing fossil fuel sources.

"This uncertainty has created an extremely challenging environment for making long-term investment decisions," said Charles Cherington, co-founder of Ara Partners.

Derrick Flakoll, an analyst at BNEF, added that investors face a very different landscape for financing energy investments than they did just a few months ago.

The energy transition continues

Despite the upheaval in US politics, BNEF analysts expect the global shift to electrification and "clean" energy to continue. The rate of solar and wind power development is expected to increase fourfold and threefold, respectively, by 2035.

"China is showing that it is right to integrate climate protection into economic growth," Corrêa do Lago added, noting that falling prices for Chinese solar panels will enable many African countries to start using solar energy.

Meeting AI’s energy needs

The development of artificial intelligence is turning data centres into huge energy consumers. By 2035, data centres are expected to account for almost 9% of US electricity consumption, more than double their current share. All low-emission sources will be needed to meet rising electricity demand.

"We have wind farms, solar power and energy storage available now, while the wait for gas turbines is 5 years and new nuclear is at least a decade away from wider deployment," said Bob Frenzel, CEO of Xcel Energy.

According to a BNEF analyst, new nuclear capacity will not arrive in time for the first wave of rising electricity consumption by data centres. Whether it will power servers after 2030 will depend on the decline in the cost of electricity generation.

"In the meantime, the rise of AI will probably be powered by natural gas," added Daniel Droog of Chevron.

The sector remains optimistic

An afternoon panel at the New York summit focused on finding reasons for optimism and the way forward for the development of "clean" energy sources. According to Andrew Gongaware, an executive director at BMO, many more renewables will be built because numerous projects have already been launched or secured financing. The only question is how many.

"Will we see 100 GW of new renewables over the next five years, or will it be closer to 200?" Gongaware said.

Corinne Still, a partner at Apollo Global Management, said the long-term macro trend of rising electricity demand would provide a tailwind, and that renewables are the cheapest and easiest source of electricity to build.