Diego Hernandez Diaz

Data centers are reshaping the energy sector, straining power systems but also sparking innovation across generation, grid design, and business models. This article was developed as part of McKinsey's partnership with the Financial Times' Energy Source Forum. Read the companion piece on FT.com. Data centers are often viewed as a new source of strain on power systems, disrupting traditional infrastructure needs and raising costs. But this captures only part of the story.

A potential increase in tanker traffic through the Strait of Hormuz could reduce immediate fuel price pressure. But jet fuel prices and crack spreads could remain volatile while inventories are rebuilt and supply chains normalize. Heading into the summer travel season, jet fuel demand is set to rise due to increased leisure travel—but supply needs have eaten into reserves held by many countries.

Following our first stock take in 2024, we conducted a follow-up review of the energy transition in 2025 by evaluating the deployment of clean energy technologies in key regions against net-zero targets. With now over a decade since the landmark Paris Agreement, the global focus on decarbonization and sustainability has unlocked tangible gains in renewable energy build-out and energy efficiency. To date, 77 percent of global economies have a net-zero target, either proposed or legislated.