Transition Monitor

Monday 29 December 2025

Despite a very encouraging 15-year decarbonization effort, the project of global energy transition continues to face stubborn hurdles. In order to judge the state of progress, it’s important to anchor oneself to a starting line, and Cold Eye Earth continues to prefer the year 2010 as the best overall reference point for our current transition. That’s the year that utility-scale wind and solar really started to land with some force, when EV adoption as a sustainable trend became visible, and when national policy strategies and corporate efforts started to emerge strongly. A different and perhaps even better argument is that 2010 was the year that previously noisy data that reflected the early, nascent stirrings of decarbonization kind of snapped to attention and began to press forward with clarity.

If we look back at that period, we’ll see that most experts were already anticipating that hard-to-abate sectors like steel, cement, air travel, and heat for both industrial and commercial/residential needs were not going to be dislocated easily. That is still the case. Fifteen years have gone by and, at best, we are still at the experimental, proof-of-concept stage in trying to dislodge coal in steelmaking, jet fuel in aviation, and heat in the built environment. These science experiments have been encouraging. Green steel is possible. Hydrogen fuel cells in trucking and even in aviation have potential. But nothing is scaling, and we know why: price. So in these areas, we continue to nibble around the edges of the problem in creative ways, but without any breakthroughs. One example: After all the hopes for hydrogen and its promise of versatility, the accelerated adoption of heat pumps has taken a far bigger stride (notably lowering natural gas consumption in Europe). And what’s poignant in that comparison is that heat pumps are established tech, while hydrogen applications remain largely on the drawing board. Solar panels, wind turbines, batteries, and EVs are in the same category—established, and no longer experimental.

The hurdle to global energy transition that was less anticipated was economic growth itself. A double-edged sword, modern growth provides the momentum and liquidity necessary to get new infrastructure built, while at the same time making the decarbonization hurdle rate far more challenging. Consequently, new energy sources have tried and so far struggled to cover marginal demand, while also displacing existing legacy sources. To be fair, this is not an easy mandate to fulfill. Indeed, we are still waiting for the moment when wind and solar will sustainably cover 100% of global power demand growth. (Reports indicate this may have happened in 2025. We await data confirmation, of course. But a stern lesson of energy history is to always be wary of extrapolating long-term trends from short-term data.)

All this said, we are obligated to regard the rise of wind and solar as one of the main, established supertrends that will—given enough time—eventually cause other sources of legacy power to enter long-term decline. Indeed, if we were not under time pressure to deliver reductions in global CO_2, we would see the current pace of energy transition in far more positive terms. The progression you see below is frankly quite impressive. Since 2010, the world has moved combined wind and solar from 1.76% to 17% of global power generation. That’s an enormous accomplishment in a short time span, and one that has obviously avoided a very large tranche of emissions growth. In the 2025 estimate, growth of power generation ex-wind and solar is held steady at roughly 26,630 TWh, based on projections by Ember. Whether the rather slow rate of total demand growth, estimated at just 2.7%, endures the finalization of this year’s statistics remains to be seen.

Cold Eye Earth has written extensively about the fleet turnover challenge in our efforts to transform global power. There is no natural law that prevents combined wind and solar from cutting into all legacy sources, forcing them into decline. That wind and solar have not been able to do so can be found in a much simpler, more conventional explanation: New wind and solar are cheap enough to compete for new generation and to dislodge old, very uneconomic generation. That’s the story, right there in the chart above. What wind and solar can’t do is dislodge economically viable generation. That this line of demarcation is not intellectually challenging to understand suggests that those who keep resisting it do so because they understandably don’t like the message.

But turn the orb slightly and the prismatic light that starts to shine through is still pretty positive: Legacy generation gets older every day. Rust, as they say, never sleeps. And despite the fact that economic growth makes this all the more challenging, let’s marvel at how adept wind and solar have been in pushing through these myriad challenges regardless. Economic growth is like the proverbial steamroller, in front of which one tries to pick up nickels and dimes before the barrel squashes all that lies before it. Wind and solar have neatly survived that experience for more than a decade, and they will indeed prevail. Eventually.

The other global supertrend with real promise is the adoption of EVs, though this trend might escape your notice if you live in the United States. (Sad face.) Global sales of internal combustion engine (ICE) vehicles peaked in 2017, but it’s only now that we are seeing its first effect: Global consumption of gasoline is starting to flatline. This is due to China’s almost singular effort to remove ICE vehicles from the market. The policy mandate has had a profound effect not just within China but now outside of China too. If you blinked, you may have missed that EVs are now nearly 50% of China’s vehicle market—passenger cars and commercial vehicles combined.

Why was China able to use EVs to drive out the incumbent technology, while global wind and solar have still not crossed that threshold in the global power domain? Multiple reasons. For many Chinese consumers, the EV was their first car. The country was only at the beginning of the S-curve of personal vehicle ownership when EV technology began to roll out. So, unlike mature vehicle markets in the OECD, there were far fewer vehicles on the road with residual utility value. Readers may recall the following example from the March 31, 2025, issue:

A family keeps a 2010 Toyota in the garage so their two college students can drive it when they are home for summer, working jobs. No one in the family loves the Toyota, and they are all math literate and understand that running costs for a new EV would be far lower. Ah, but the EV represents a new capital cost to the family, whereas the 2010 Toyota is already paid for. So the value proposition of the 2010 Toyota is poor if you were buying it today off a used car lot. But not if you already own it. The value proposition of keeping the Toyota, the value to be captured in its ongoing utility, therefore, is excellent.

The OECD has a far greater fleet turnover problem when it comes to EV adoption, not only because these regions began adopting cars widely more than 100 years ago, but because cars now last longer too, with lifespans lengthening notably in the past 20 years. The OECD was also early to electrification, so power plant penetration also began here over 100 years ago.

Unsurprisingly, road fuel demand is no longer growing (much) in China, and as a result, it’s no longer growing (much) worldwide. According to the IEA, for example, global gasoline usage barely grew in 2025, and it’s expected to not grow at all in 2026—even though total oil demand is forecasted to rise by 0.8%. The global oil market is on the verge therefore of losing road fuel as a pillar of growth.