Around $3.3 trillion was invested across the global energy system in 2025, but batteries garnered less than $70 billion of the total, despite the much-vaunted clean power transition, according to latest analysis by McKinsey & Company.
Figures released on September 1 show that no single fuel type is yet replacing another at global level, with markets now financing both fossil fuels and low-carbon energy simultaneously and at a broadly comparable scale.
In 2025, fossil fuels, power generation and low-carbon tech benefited from $1.8tn of the total, with around $540 billion going to the upstream oil sector (the largest fossil-fuel capital expenditure category), and some $440 billion spent on solar — the largest clean-energy category.
With growth in global solar capacity of about 30% over the past year, decarbonisation appears to be thriving while fossil fuels are declining. However, McKinsey said the full picture is more complex and shows the long-predicted fossil fuel ‘peak’ remains elusive.
According to McKinsey, the global energy system ultimately has to deliver across four dimensions: affordability, reliability, resilience, and emissions reduction. The challenge is that no single energy carrier leads on all four.
Liquefied natural gas is cost-effective in many markets and can be made compatible with emissions goals through abatement, carbon capture and storage, or methane control. But it carries resilience risks.
In 2025, more than 62% of internationally traded LNG originated from just three countries — Australia, Qatar and the US, McKinsey said. Similarly, China supplies more than 80% of global solar modules and more than 85% of the world’s battery cell production capacity by monetary value.
“Such concentrated supply chains pose a resilience risk for low-carbon technologies, potentially even greater than the gas-dependency challenge facing Europe.”
According to McKinsey, optimising the energy system for only one of these dimensions is no longer sufficient. A system designed primarily around cost could be vulnerable during supply disruptions, extreme weather events and geopolitical turmoil.
Similarly, a system optimised for emissions reduction may come under pressure on affordability and reliability, while designing a system around resilience could falter in terms of emissions goals.
“The next phase of the energy transition will require not just greater low-carbon capacity but also more investment in the assets that enable system performance.
“A more balanced investment framework is needed — one that evaluates technologies not only by deployment speed or headline cost but also by their contribution to overall system value.”
Systems that perform best by 2030 are likely to be those that treat resilience, reliability, and affordability as integral parts of decarbonisation rather than trade-offs against it.
The analysis is available in full online.
