Global energy markets are facing a new challenge. What’s behind it? “Greater digitalisation, automation and electrification”, says Global X Commodities Research Analyst Roberta Caselli.
New economic activities – not least the meteoric rise of artificial intelligence (AI) and the corresponding infrastructure boom – are driving rising demand for electricity, and boosting the profile of several non-traditional power sources in the process.
Before joining GlobalX in 2022, Caselli covered base and precious metals at JPMorgan, oil products and risk management at commodity trading house Eni Trade and Biofuels, and fixed income derivatives, equity, and portfolio construction at Bloomberg. In the latest edition of Aureon Sessions, she explains what new demand means for energy systems, and how electricity’s growing share of energy use is driving development in nuclear and solar.
Powering AI
As new technologies become central to daily life, the discussion around energy is increasingly a discussion around electrification. “We appear to be moving towards a more electricity-intensive energy system,” Caselli notes.
The expansion of electric vehicle charging networks, industrial automation, and building cooling and heating demands are creating “a different energy challenge from the one markets faced a decade ago … the transition is likely to involve not only replacing higher carbon generation, but also expanding generation and grid capacity to accommodate new sources of demand”.
One key driver of this trend is the AI boom, Caselli explains, as powering and cooling server racks represents one major challenge, while ensuring reliable power supply, grid connections and power transmission infrastructure is another. According to the International Energy Agency (IEA), global data centre electricity consumption reached 485 TWh in 2025, accounting for approximately 1.5% of global electricity demand, and is projected to nearly double to 950 TWh by 2030, representing around 3% of the total. “This illustrates the growing overlap between the energy and AI themes,” she notes, as the power needs of AI have driven major investment – and investor interest – into previously overlooked energy sources.
Nuclear’s second act
Perhaps the biggest winner of AI’s energy bottleneck has been nuclear. Once considered a relic of a bygone era, nuclear is witnessing a strong resurgence in private investment and government support around the world.
Two advantages of nuclear as a power source have brought it back into the conversation, Caselli explains.
First, “nuclear plants can provide large-scale, continuous electricity with relatively low operational carbon emissions”. Second, “nuclear power has historically achieved high capacity factors relative to many other generation technologies, allowing reactors to operate at a high output for much of the year”. This means nuclear ticks all the boxes for policymakers and companies looking to advance decarbonisation initiatives without sacrificing reliable supply.
The result is a policy about-face in many parts of the world. Italy’s Senate approved a return to nuclear development in September 2026, while Switzerland is reportedly considering lifting a ban on development in place since 2018. In May 2026, the Nuclear Alliance of EU Member States set a target of 150GW in nuclear power generation by 2050, compared to a current capacity just below 100GW. The US, meanwhile, is aiming to quadruple nuclear capacity by mid-century, with various policy measures advanced to “reduce licensing costs and regulatory barriers for advanced reactor designs.”
Technological advancements are another tailwind for nuclear development, Caselli explains, highlighting the emergence of small modular reactors (SMRs). “The SMR concept is receiving increased attention because it may offer a path to smaller, more flexible nuclear projects that can be manufactured in modules and deployed in a location where traditional large reactors may be less practical,” she says.
Government investment is helping to accelerate SMR development and deployment. A joint US-Japan initiative, announced in March 2026, will see GE Vernova [GEV] and Hitachi [HTHIY] build SMRs in Tennessee and Alabama at a cost of $40bn.
Construction of large-scale reactors has also increased in recent years, as shown in the graph below, as countries like China, the UK and India look to expand their nuclear fleets.
This nuclear renaissance, Caselli notes, has transformed a legacy energy source into “potential strategic infrastructure in a world requiring low carbon electricity”.
The solar surge
Resurgent nuclear is not meant to be the only solution to growing electricity demand, Caselli admits. Instead, it can work to complement “variable sources such as solar and wind within a diversified power system”.
Solar, in particular, has emerged as a market favourite among renewable energy sources. Its “scalability, increasing cost competitiveness and alignment with the electrification of the economy” has allowed it to transition “from a niche clean energy topic to a more mainstream source of power generation”, Caselli notes.
The numbers make the case. IEA data shows that 56GW of solar PV capacity was added globally in 2015; in 2025, solar PV accounted for 605GW of renewable capacity additions. BloombergNEF expects solar to become the world’s single largest source of electricity by 2032.
The advantages of solar are clear, Caselli stresses, and its expansion has been supported by “manufacturing scale, technological improvements, and falling costs”. More frequent heatwaves have also increased the appeal of solar, she notes, as demand for air conditioning during the summer “contributes to higher electricity demand, even as gas or LNG supplies appear under pressure”. Policymakers are increasingly turning to solar to fill that gap.
Working together
Even if the energy mix of the future is radically different from the energy mix of today, it is likely to remain, precisely, a mix. Caselli underlines that nuclear and solar can be deployed together in a way that complements their respective strengths.
Whether it’s governments looking to ensure energy sovereignty or hyperscalers looking to power massive compute, “nuclear can provide really reliable baseload power and fuel density advantages, while renewables can offer scale, declining costs and rapid deployment”.
Ultimately, this represents nothing less than a wholesale transformation of the global energy market, Caselli notes. In the long term, major players will be looking to “[rebuild] the power system around security, resilience and electrification”.
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