The idea of a smooth, linear energy transition has become increasingly unrealistic. The Disorderly Energy Transition makes this clear by grounding the debate in hard data rather than aspiration. Global energy demand continues to rise faster than low‑carbon supply can scale, geopolitical realities are reshaping trade flows, and energy security is now as influential as decarbonisation in shaping policy and investment decisions. For family business leaders, the message is highly relevant: the transition is real, but it will be uneven, volatile and full of trade‑offs.
An energy system still defined by demand and security
A central insight from the report is that the world remains fundamentally energy‑hungry. In 2024, global energy demand rose by around 2%, driven primarily by growth in Asia, despite stagnation in Europe and North America. Renewables deployment reached record levels, yet so did consumption of fossil fuels. This is not because countries have abandoned climate ambition, but because energy security, affordability and resilience are taking precedence in an increasingly unstable geopolitical environment.
For family businesses, this mirrors a broader truth: transitions rarely replace systems cleanly, they layer new models on top of old ones. Leaders should be cautious about binary assumptions and instead plan for coexistence and adaptation.
Regional divergence and the reality of renewables
There is a growing ‘reality check’ for renewables, particularly in Europe. While renewables met the majority of new power demand growth in 2024, their expansion is increasingly constrained by grid capacity, planning delays, supply‑chain bottlenecks and higher financing costs. China, by contrast, continues to deploy renewables at scale, driven by industrial strategy rather than climate policy alone. This divergence reinforces a critical lesson for family firms operating internationally: regional context matters more than global narratives.
Electrification, infrastructure pressure and system fragility
A particularly striking theme is the pace of electrification. Electricity demand is growing roughly twice as fast as overall energy demand, fuelled by electric vehicles, data centres and industrial electrification. This surge is placing unprecedented pressure on grids, storage systems and critical minerals. Electrification creates opportunity, but also exposes infrastructure fragility. For family businesses reliant on energy‑intensive operations, logistics networks or digital infrastructure, resilience planning is no longer optional.
Natural gas emerges in the report not as a short‑term bridge fuel, but as a long‑term structural component of the energy system. Global gas consumption reached record levels in 2024, supporting grid stability and complementing intermittent renewables. This reframing matters for investment strategy. The transition is increasingly characterised by “and” rather than “or”: gas and renewables, resilience and decarbonisation, affordability and ambition.
Oil demand, meanwhile, appears to be heading towards a plateau rather than a sharp peak, particularly in developed markets. Declining growth rates, electrification in China and refinery consolidation point to a more concentrated and competitive supply landscape. For business leaders, this reinforces the value of focusing on cost discipline, portfolio resilience and optionality rather than assuming straightforward decline or growth paths.
Coal provides one of the most uncomfortable truths in the report. Despite falling as a share of global energy, coal demand continues to rise in absolute terms in major economies such as China and India. Its resilience reflects cost, availability and energy security considerations rather than ideology. This is a reminder that policy ambition does not always translate into system‑wide outcomes, and businesses must navigate complexity rather than wait for clarity.
Geopolitics, fragmentation and strategic implications
Geopolitics runs through every theme. Energy flows have been rapidly re‑routed since 2022, with Russian energy moving eastwards, Europe diversifying gas supply through LNG, and the US emerging as a critical stabilising exporter. Sanctions have reshaped flows but not eliminated trade. The implication for family enterprises is clear: globalisation is not reversing, but it is fragmenting, increasing the value of regional resilience, diversified sourcing and scenario planning.
The report concludes by naming the moment accurately: this is a disorderly transition. Progress is uneven, competing priorities coexist, and volatility is structural rather than temporary. Yet within disorder lies opportunity. Businesses that rely on assumptions of uniform change or linear progress will struggle. Those that embrace complexity, revisit long‑held assumptions and anchor decisions in data rather than narratives will be better positioned.
For family business leaders, the takeaway is not to become energy experts, but to internalise the pattern. Long‑term success in this environment requires pragmatism over purity, resilience over optimisation, and the confidence to act without waiting for perfect alignment between policy, markets and technology.
The energy transition will shape cost structures, supply chains, talent needs and investment horizons across almost every sector. Understanding that it will be disorderly is not a cause for pessimism, it is a prerequisite for effective leadership.
Our energy insights
Something went wrong
Oops!! Something went wrong, please try again
Get in touch
Discover why organisations across the UK trust KPMG to make the difference and how we can help you to do the same.