INDUSTRY REPORT
“ Trends in global power generation markets range from slowing global oil demand growth and the rising deployment of electric cars to the rapidly expanding role of electricity.”
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INDUSTRY REPORT
THE POWER MIX
Global energy investment is set to increase in 2025 to a record US $ 3.3 trillion, despite headwinds from elevated geopolitical tensions and economic uncertainty.
According to analyst Precedence Research, the global powergeneration market size was calculated at US $ 2.10 trillion in 2024, is projected to grow to US $ 2.27 trillion in 2025 and reach around US $ 4.55 trillion by 2034. The market, it believes, is poised to grow at a CAGR of 8.04 % between 2024 and 2034.
With intensifying geopolitical strains and heightened uncertainty about global economic prospects, oil markets are undergoing structural changes as the key drivers of supply and demand growth of the past 15 years start to fade, according to the latest edition of the International Energy Agency’ s( IEA’ s) medium-term outlook. As the Israel-Iran conflict focuses attention on immediate energy security risks, the new IEA medium-term outlook sees global oil supply increase set to far outpace demand growth in coming years. According to the report, accelerating sales of electric cars, which reached a record 17 million in 2024 and are on course to surpass 20 million in 2025, have kept a peak in global oil demand on the horizon. Based on the current outlook, electric vehicles are set to displace a total of 5.4mb / d of global oil demand by the end of the decade. The replacement of oil with natural gas and renewables for power generation in the Middle East, particularly in Saudi Arabia, is also expected to weigh on global oil demand growth in the coming years.
Policies aimed at diversifying countries’ energy mixes have also been implemented at an accelerated rate over the past two decades, especially in the power sector. Today, more than three-quarters of global power sector demand is covered by policies aimed at diversifying power generation, relying on measures such as utility obligations, tax credits and other incentives. In recent years,
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46 | ismr. net | ISMR September 2025