The global energy system is becoming more diverse, more fragile, and more unpredictable, with affordability and security reshaping the landscape, according to a new analysis.

McKinsey’s Global Energy Perspective 2026 report argues the next phase in global energy may look less like a straightforward transition from one source to another than previously predicted.

Instead it says the next phase will look like an energy expansion with the use of oil, gas, coal, and renewables all expanding simultaneously.

The study claims different trade-offs between cost, security and decarbonization will lead to markedly different energy systems and investment needs.

And it says despite record clean-energy investment, oil demand reached its highest level since 2019 in 2025, while coal consumption hit another record and gas demand grew across every major region.

The report also states artificial intelligence and data centres are rapidly becoming a major new source of power demand, and also a planning uncertainty.

It also states if energy demand keeps growing faster than existing supply is displaced, companies and governments may need to build renewables, grids and storage while also investing in other sources of firm energy.

McKinsey partner Diego Hernandez Diaz said global energy demand is increasing across all sources, including renewables, oil, gas and coal, in an interview.

Hernandez Diaz added oil will remain a key source in the global energy stack until the 2030s and coal is expected to stay longer than previously expected.

He told me the key drivers which will define the energy landscape over the next 10 to 15 years will be the growing demand for data centres and AI, particularly in the U.S, China and Europe.

Hernandez Diaz added the electrification of transport and the increasingly popularity of electric vehicles will also push demand.

And he said population growth and energy adoption in regions like South-East Asia will also push demand for electricity.

He also highlighted how high interest rates and the cost of capital have changed the energy landscape.

“Five years ago, we were all excited about the potential for wind, hydrogen and carbon capture, and the fundamental driver was decarbonization,” he told me.

“Now we have a system, which is being driven by affordability and resilience, not sustainability. Gas and oil are going to stay in the system longer than we previously expected.

“And solar will continue to grow at an accelerated pace if we are able to simultaneously deploy enough flexibility into the system, primarily through batteries,” added Hernandez Diaz.

Energy tech executive Vic Shao said the new McKinsey report should not surprise anyone “who’s had to put electrons on a site” in an email.

Shao added demand is growing faster than old supply is retiring, so the energy buildout has to include low-carbon capacity and the firm power that actually keeps the lights on.

He said renewables still matter and are often the cheapest energy when the resource shows up.

“Affordability and security are not side constraints anymore They’re co-equal with decarbonization, which is why serious capital is still funding LNG, gas-fired generation, grids, storage, and nuclear alongside record renewable additions,” he said.

“The investment question for the next decade is not which fuel wins, it is which combination can be financed, permitted, interconnected rapidly, and operated as a system economically.”

Max Pieri, the chief executive officer at Fleet Nuclear, said the growing demand for global electricity was being driven by a variety of factors, including transportation, cooling and artificial intelligence, in an interview.

Pieri added the challenge in the energy landscape has shifted from choosing between different technologies to keeping up with demand by using a mixture of fossil fuels, renewables and nuclear.

But he told me generation is only one part of the equation, and improving transmission and distribution capacity on electric grids was also critical in both the U.S. and Europe.

“We need to be able to work on the supply side to keep up with the demand by using all possible energy sources,” said Pieri.