The start-up phase completed, the energy transition enters a phase of industrialization

In fifteen years, the energy transition in Switzerland and around the world has moved from an embryonic stage to one of concrete reality. The 2022 energy crisis further confirmed its importance: the explosion in fossil fuel prices—particularly gas—combined with the low availability of the French nuclear fleet, highlighted the crucial role of indigenous renewable generation and energy efficiency, both from the point of view of economic profitability and that of the resilience of the energy system. Thus, a wind investment could have been amortized in a single year at the peak of the crisis.

On the environmental front, the continued rise in global temperatures unfortunately confirms scientific forecasts and underlines the urgency of energy decarbonization. This reality does not, however, prevent the energy transition from running into headwinds and coming under strong pressure. Notably, there has been a slowdown in decarbonization commitments within companies: after rising from around 1% to more than 30% in five years, the number of firms setting a "net zero" target has stalled (MSCI Institute indicator for listed companies).

Moreover, fossil fuel consumption continues to increase globally. At a more local level, the solar and heat pump markets are declining sharply (by more than 30% in 2025), while the electric vehicle market has experienced a clear slowdown in its growth over the past two years in Switzerland.

Three main factors likely explain this situation. On the one hand, the strains weighing on the European economy, particularly on its industrial sector; on the other, the deliberate choice of the world's largest economy to rely on cheap fossil fuels; and finally, the very success of the energy transition. By its scale, it inevitably brings new challenges. These are notably economic, with investments that are no longer marginal; technical, due to increasing integration into the energy system; and political, given its high visibility.

In 2025, global investments in renewables and electrification surpassed those dedicated to oil, gas and coal, according to the International Energy Agency.

Many notable advances

Will it stop for that reason? The answer is clearly no. In 2025, global investments in renewables and electrification surpassed those dedicated to oil, gas and coal, according to the International Energy Agency. China and India—two major greenhouse gas emitters—see their energy- and cement-related emissions stagnate, even decrease for the former, and slow down markedly for the latter.

Also in China, electric vehicle sales have exceeded 50% of the total market, making the country the world's largest automotive market. The same is true in Switzerland, where the electric vehicle market continues to progress.

In our country, photovoltaic installations also remain at record levels despite the recent slowdown, while grid battery capacities are increasing strongly. After years of procedures, several wind projects are finally reaching the end of the avenues for appeal.

New challenges ahead

The energy transition therefore will not stop, but it will have to meet the following new challenges:

• Systemic integration of intermittent renewable generation (e.g. photovoltaics, wind): These will have to fully assume their new role in the resilience of the energy system. This is the end of the 'produce-and-forget' ('produce and forget') model. Their development must be accompanied by dedicated flexibilization solutions and additional means (batteries, pumped hydro storage, demand flexibility, etc.).
• Investments and skills needs: The energy transition will require a doubling, even tripling, of historical investments  and the same will be true for the increase in available skills. This particularly concerns electrical distribution and transmission networks, which will need to be strengthened. This dynamic, combined with long payback periods, will put pressure on transition companies, notably energy distributors.
• Sharp increase in electricity consumption: The electrification of mobility and heating is accompanied by rapid growth in demand from data centers linked to artificial intelligence. In Texas, operator ERCOT forecasts a doubling of demand in five years, largely attributable to these centers. This figure may seem high, but the installation of a single "AI" data center in a canton would produce a comparable effect, given the projects currently envisaged.
• Reaching physical potentials: The scale of developments will require a massive mobilization of available potentials, notably for biomass or roof surfaces. The biomethane consumed in Switzerland (3.7 TWh) is, for example, already higher than the domestic production potential and is therefore mostly imported.
• Evolution of market models: Regulation and market models will need to find a balance between stability—in Switzerland, energy laws have been revised at a sustained pace since the Energy Strategy 2050—and adaptation to new paradigms. They involve remuneration for flexibility and contribution to security of supply, management of price balances in a context of production at almost zero marginal cost, control of externalities, incentives for market participants and dynamic pricing, etc.

For the energy transition, the kick-start phase is now over, which is welcome. We are now entering a phase of industrialization, and therefore of rationalization, in the sense of the "pragmatic reset" advocated by Michael Liebreich.

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