Wood Mackenzie reveals sharply divergent regional power market trajectories in latest Global Outlook

Global power markets are entering a period of unprecedented transformation characterized by sharply divergent regional paths, according to Wood Mackenzie's latest H1 2025 regional power Strategic Planning Outlooks.

While Asia Pacific experiences a massive investment boom driven by an energy storage revolution, the United States grapples with robust demand growth amid rising policy uncertainty, and Europe faces implementation challenges despite sustained decarbonization commitments.

Asia Pacific powers ahead with surge in investment
Asia Pacific's power markets are experiencing an unprecedented investment surge, with generation investments projected at US$3.9 trillion over the next decade – 44% higher than the previous ten years. Energy storage has emerged as a mainstream technology, accounting for 14% of investments through 2034 and surpassing both coal and gas power.

"Asia Pacific has reached a pivotal turning point in decarbonization," said Alex Whitworth, vice president, head of Asia Pacific Power and Renewables Research at Wood Mackenzie. "Power sector carbon emissions have likely peaked in 2024 as renewables rapidly displace coal generation, with the combined share of hydro, solar and wind generation set to climb from 27% in 2024 to 40% by 2030."

The region's energy storage revenues are poised for explosive growth, surging from US$14 billion in 2024 to US$184 billion by 2035 as storage's share of on-grid sales expands from less than 1% to over 11%.

US and Canada Face Demand Surge Amid Policy Headwinds 
American and Canadian power markets are experiencing robust demand growth, with US and Canada demand projected to grow at 2% annually through 2050 – up from the previous 1.6% forecast. However, policy uncertainty from potential trade actions and regulatory changes introduce new costs and development risks.

"Large customers remain willing to pay premiums to secure reliable supply, fueling accelerated growth despite policy headwinds," noted Ryan Sweezy, director of North America Power and Renewables. "The combination of stronger demand, higher commodity costs and increased thermal generation is driving a bullish price environment, with power prices rising 10-50% above previous forecasts across most markets."

Nuclear capacity is expected to grow by 9 GW through 2060 as utilities seek clean firm power sources, while solar and storage add 2.4 TW of capacity. Wind development faces headwinds from adverse regulatory actions, resulting in 17% lower additions by 2050 compared to previous outlooks.

Europe Balances Ambition with Implementation Reality 
European power markets face a more challenging outlook as global trade tensions dampen economic growth and investor confidence. While political commitment to decarbonization remains strong, policymakers confront mounting complexities in delivering the energy transition.

Permitting and grid connection hurdles continue to impede progress, with offshore wind development facing particular pressure from rising costs and delivery constraints. Despite these near-term headwinds, the fundamental trajectory toward decarbonization persists, though the pace may prove more measured than initially anticipated.

“Power prices are expected to follow gas costs downward toward 2030, supported by increasing renewable supply, though long-term price stability will depend on enhanced flexibility solutions and higher carbon pricing as thermal generation becomes increasingly sidelined,” said Peter Osbaldstone, director, Europe Power for Wood Mackenzie.

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