Energy security and affordability have become key policy considerations in many regions, particularly as the global energy transition has entered a more turbulent, complex phase, shaped by infrastructure realities and geopolitical risk, as well as decarbonisation ambitions.

Consultancy Boston Consulting Group (BCG) identifies seven macro shifts and four major implications raised by these shifts in a report called ‘The Energy Transition’s Next Chapter’.

The greater urgency around energy security has profound implications for the energy transition, the report states.

Increasingly, countries are focusing on expanding the share of their energy that comes from indigenous sources and many are also seeking to build localised value chains for critical low-carbon technologies, often through trade protections and industrial policy.

BCG says the cost of delivering large-scale grid infrastructure has increased about six-fold since the last major build-out in the 1960s, driven primarily by permitting delays, labour constraints, rising technical complexity and supply chain bottlenecks. This is the case not only for electricity grids, but more broadly across all energy infrastructure.

These pressures now risk slowing the energy transition and raising end-user costs. Energy affordability, especially for the poorest households, has deteriorated over the past 25 years, most notably in recent years. This has contributed to an erosion of support among consumers for the transition.

"The evolving and complex environment we observe today does not signal a retreat from the energy transition overall. In many cases, energy security and affordability can be aligned with decarbonisation goals,” notes BCG senior partner Maurice Berns.

For him, the question is not whether these transitions will continue, but how and at what pace. “It is essential for countries to reduce the overall cost and accelerate the build-out of enabling infrastructure.”

From a continental perspective, BCG South Africa MD and partner Kesh Mudaly explains that Africa faces a dual imperative; firstly, to meet a projected growth in electricity demand; and secondly, to simultaneously connect the nearly 600-million people who still lack access to electricity.

“Our regional analysis shows that conventional grid expansion alone is insufficient to meet this timeline. Closing this gap requires an acceleration of investment into a strategic blend of energy solutions, from utility-scale projects to the decentralised minigrids and offgrid systems that will deliver over half of all new connections, to power inclusive growth and prosperity,” Mudaly says.

The key to success, however, will not be a one-size-fits-all solution, but rather tailored, country-specific strategies that attract investment and pragmatically balance the energy quadrilemma of sustainability, affordability, security of supply and job creation, he adds.

The report outlines a new "build the assets" phase. After decades of focusing on maintaining or upgrading existing energy infrastructure, the industry is moving into a new era characterised by large-scale capital build-out.

Global energy capital expenditure is expected to rise by about 50%, from about $7-trillion to about $10-trillion from 2024 to 2030, which is equivalent to 1.5% of global GDP, with much of the investment to be spent on grids and renewables.

This marks a structural shift, particularly for advanced economies such as the US and Europe.

As a result, the cost of capital is becoming the single-largest driver of system economics. However, companies and supply chains are not yet configured for this capital-intensive build-the-assets phase.

Other key insights from the report include how AI data centres are driving electricity demand, as well as electrification of transport, buildings and industry. Electricity demand is poised to rise by more than 7 PWh in the 2020s and 2030s.

BCG also finds that firm, dispatchable power is resurging, with both nuclear power and natural gas generation capacity rising by an expected 40% through to 2040.

Additionally, the demand trajectory for oil and gas is higher than expected. Even in accelerated transition scenarios, sectors such as aviation, heavy transport and petrochemicals currently lack scalable alternatives, keeping oil demand structurally resilient.

Meanwhile, gas – particularly liquefied natural gas – is seeing a more robust and strategic expansion, with global demand expected to rise 80% by 2040 and 38 new importing countries projected to be joining the market.

BCG says technology cost trajectories are diverging. While solar, onshore wind and batteries have achieved cost reductions of up to 90% since 2010, costs for critical strategic solutions such as green hydrogen and long-duration storage remain higher than previously anticipated.

The BCG report concludes with recommendations for role-specific actions that key players such as grid owners and operators, large consumers and energy producers and suppliers can take to advance the energy transition, along with options for policymakers as they navigate it.

"Roughly two-thirds of energy-related emissions can be addressed using commercially viable and soon-to-be viable technologies, especially in parts of power generation and in electrifying certain end uses,” the consultancy states.

It adds that progress can be accelerated by doubling down on proven technologies and placing strategic bets, strengthened through clear and stable policy frameworks.

That said, BCG global chairperson Rich Lesser reiterates that no single, one-size-fits-all energy transition exists.

“Starting points vary widely, and strategies must be tailored – not just at the national level, but in many cases regionally and locally. What works in Germany may not work in Indonesia or the US.”

In Africa, Mudaly says the energy narrative is fundamentally about growth and access. “Our challenge is unique in that we must address energy poverty and drive economic development simultaneously with the global energy transition.

“This is not about slowing down; it is about strategically harnessing our diverse resources to build a reliable, affordable and sustainable power system that can uplift hundreds of millions of people,” he concludes.