Five Strategic Directions for Future Energy Development
In the pursuit of carbon neutrality and a sustainable future, the global energy system is undergoing profound transformations along the following five strategic directions:
Renewable Energy: From Supplement to Dominance
Renewable energy sources such as solar and wind power are becoming the backbone of the global energy transition due to their cleanliness, unlimited availability, and rapidly decreasing technological costs.
Breakthroughs in Photovoltaics
Crystalline silicon solar cell efficiency continues to rise, while frontier technologies such as perovskite and tandem cells are emerging. Laboratory conversion efficiencies have reached 33.9%, as demonstrated by the Swiss Federal Institute of Technology Lausanne in 2023. Meanwhile, large-scale production and technological advancements in PV modules have drastically reduced the levelized cost of electricity—from a staggering $76/W (approximately $76,000/MWh) in 1977 to as low as $0.03/kWh in optimal projects by 2023—making solar power highly competitive.
Offshore Wind Expansion
Wind turbines are increasing in single-unit capacity, blade length, and tower height. While onshore wind is already well-established, future growth will focus on offshore wind, particularly in deep-sea areas beyond 50 meters in depth. Floating wind turbines (e.g., China’s 15MW “Three Gorges Lead” demonstration project) overcome the limitations of fixed foundations, accessing stronger and more stable wind resources. These systems can achieve over 4,000 full-load hours annually.
Other Renewable Sources
Geothermal, marine energy (including tidal and wave energy), and biomass will also play a role based on local conditions, diversifying the renewable energy mix.
Integrated Multi-Energy Systems
Addressing the intermittency and variability of renewables is critical. This involves intelligently coordinating solar, wind, hydropower, energy storage, and dispatchable sources (such as pumped hydro, gas turbines, or advanced nuclear) to form integrated multi-energy systems. One example is the Longyangxia integrated wind-solar-hydro-storage project in Qinghai, China, with a total capacity exceeding 30GW—currently the largest of its kind globally—providing stable power output to the regional grid.
Nuclear Energy: Re-examining Safety, Efficiency, and Sustainability
As a stable, low-carbon baseload power source, nuclear energy will continue to play a key role, with future efforts focusing on technological innovation and enhanced safety.
Fourth-Generation Reactors
Compared to current second- and third-generation pressurized water reactors, fourth-generation systems offer improvements in fuel utilization, inherent safety, waste management, and proliferation resistance. For instance, thorium-based molten salt reactors (like the pilot built in Wuwei, Gansu, China) leverage more abundant thorium and operate safely at high temperatures. Fast breeder reactors (e.g., Russia’s BN-1200) can “burn” plutonium from spent fuel and convert depleted uranium into fissile material, increasing natural uranium utilization from ~1% to over 60%, thereby significantly extending fuel supplies and reducing high-level waste.
Small Modular Reactors (SMRs)
With capacities typically under 300MW, SMRs offer modular design, reduced upfront costs, faster construction, and greater flexibility. They are well-suited for remote areas or as replacements for small coal-fired plants, facilitating broader social acceptance and faster deployment of nuclear energy.
Controlled Nuclear Fusion
Dubbed the “ultimate energy source,” fusion mimics the Sun’s energy production and uses deuterium and tritium from seawater as fuel—generating minimal long-lived radioactive waste. The ITER project aims to achieve a Q>10 energy gain by 2035. Simultaneously, compact high-field fusion initiatives such as SPARC (by MIT and Commonwealth Fusion Systems) are advancing, with goals to validate high-field superconducting magnets by 2025. Though commercial viability remains decades away, fusion holds vast potential.
Hydrogen Energy: Building a Zero-Carbon Fuel and Industrial System
As a clean energy carrier, hydrogen can be converted to electricity via fuel cells, emitting only water, making it a key solution for hard-to-decarbonize sectors such as transportation and industry.
Green Hydrogen Production
Today, most hydrogen is produced from fossil fuels (gray hydrogen), generating significant CO₂ emissions. The future lies in green hydrogen—produced via water electrolysis powered by renewable energy. While traditional alkaline electrolyzers operate at ~70% efficiency, proton exchange membrane (PEM) electrolyzers exceed 80% and respond rapidly to fluctuating renewable inputs. Large-scale green hydrogen projects are emerging worldwide, such as Australia’s “Asian Renewable Energy Hub,” targeting an annual output of up to 1 million tons.
Storage and Transportation Innovations
Hydrogen’s low density poses challenges for storage and long-distance transport. Solutions include high-pressure gas storage, cryogenic liquid storage (-253°C), solid-state storage (e.g., metal hydrides), and conversion to more transport-friendly carriers like ammonia (NH₃), which liquefies more easily and has established logistics infrastructure. Saudi Arabia’s NEOM project plans to export green ammonia globally. Hydrogen blending into natural gas pipelines is also gaining attention.
Expanded End-Use Applications
Hydrogen has diverse applications, including fuel cell vehicles, trains, ships, and aircraft; industrial processes such as steelmaking and chemical production; building heating; and long-duration grid-scale energy storage.
Energy Digitalization: Intelligent Management and Efficient Coordination
Integrating information technologies—such as AI, big data, IoT, and cloud computing—into energy systems is essential to enhance efficiency, safety, and enable large-scale renewable integration.
Virtual Power Plants (VPPs)
By digitally aggregating distributed energy resources (DERs)—like rooftop PV, batteries, EVs, and controllable loads—VPPs function as “virtual” generators that participate in energy markets and grid services. For example, Germany’s Next Kraftwerke aggregates over 5.5GW of DERs and responds to grid commands in under 100 milliseconds, effectively mitigating renewable variability.
AI-Based Forecasting and Dispatch
AI algorithms improve forecasting of renewable output (e.g., reducing wind and solar prediction errors by 20%) and optimize grid power flows, minimizing transmission losses and curtailments. For instance, the PJM grid in the U.S. reduced wind curtailment by 12% through AI-based dispatch.
Smart Energy Management
Using IoT and big data platforms enables real-time monitoring, analysis, and optimization across the entire energy chain—production, transmission, and consumption. Smart meters and home energy management systems facilitate demand response by encouraging off-peak electricity usage and peak shaving.
Blockchain and Energy Trading
Blockchain technology offers a foundation for decentralized energy trading platforms, enabling peer-to-peer transactions within communities, improving transparency and efficiency.
Biomass and Carbon Utilization: Key to Negative Emissions and a Circular Economy
Biomass is the only renewable carbon source, offering unique advantages for power, heat, fuels, and bio-based products. When combined with carbon capture, utilization, and storage (CCUS), it can deliver net-negative emissions.
Third-Generation Biofuels
Compared to first-generation biofuels (based on food crops) and second-generation (using agricultural and forestry waste), third-generation fuels utilize non-edible biomass such as algae. Algae absorb CO₂ through photosynthesis and have high oil yields—up to 15,000 liters per hectare, far exceeding corn (~200 liters/ha). This makes them suitable for hard-to-electrify sectors like aviation and shipping. Companies like ExxonMobil have already achieved commercial production of sustainable aviation fuel (SAF).
Bioenergy with Carbon Capture and Storage (BECCS)
By capturing CO₂ from biomass power generation or industrial processes (e.g., cement, steel), and then utilizing or storing it, BECCS can theoretically remove CO₂ from the atmosphere—since the CO₂ emitted was initially absorbed during biomass growth. The Stockholm Exergi plant in Sweden is exploring this pathway by integrating biomass CHP with carbon sequestration.
Biomass Gasification and Pyrolysis
These processes convert biomass into bio-syngas or biochar, which can be used for electricity, heating, or as soil amendments—enhancing energy efficiency and adding value to biomass resources.
Reconstructing the Human-Energy Relationship: Toward Sustainable Symbiosis
The future energy transition is not merely a shift in technologies and fuels—it represents a fundamental transformation in how human societies access, distribute, and use energy. It requires rethinking and reshaping the relationship between humanity and energy.
Conceptual Shift: From “Extractive Development” to “Symbiotic Circularity”
For centuries, fossil fuel use has followed an extractive model: unidirectional extraction, combustion, and emission. This approach has pushed Earth’s ecosystems to their limits. Future energy systems must align with sustainability frameworks such as the Planetary Boundaries concept (Rockström, 2009), integrating energy activities within ecological cycles. This entails:
Carbon cycle balance: Emissions must be drastically reduced to net zero, or ideally negative, stabilizing atmospheric CO₂ at safe levels. Global annual CO₂ emissions currently stand at around 36 billion tonnes; to meet the Paris Agreement goals, this must fall below 20 billion tonnes per year (accounting for natural carbon sinks).
Efficient and circular resource use: Maximize energy efficiency and minimize waste. Promote circular material flows in energy systems, such as recycling materials from decommissioned solar panels and wind turbine blades, reducing reliance on virgin resources.
Coordination with water and land resources: The development of renewable energy must consider impacts on water use (e.g., hydropower, thermal plant cooling, hydrogen production) and land occupation (e.g., large-scale PV farms, biofuel crops), aiming for harmony between energy development and ecological protection. Current global freshwater use is about 4,600 km³/year; future energy systems must remain within sustainable limits.
Redefining Social Equity: Energy Democratization and Inclusive Access
Energy transition must address social equity to avoid worsening inequality.
Eliminating energy poverty: Hundreds of millions still lack reliable modern energy. Off-grid and microgrid-based clean solutions—such as solar home systems (SHS)—can quickly and affordably bring electricity to rural and remote areas. In Bangladesh, SHS has reached 20 million rural people, cutting per capita electricity costs by around 60%. The IEA calls for connecting 780 million people to clean electricity by 2030 and providing clean cooking solutions to 2.8 billion people still relying on traditional biomass by 2050.
Just transition: Ensure fossil fuel workers and communities are supported during the energy transition to prevent mass unemployment and social instability. This includes government-led reskilling programs, job assistance, and social protection.
Energy democratization and community engagement: Encourage community ownership and management of distributed energy projects, allowing more people to benefit from energy production and consumption. Implement personal carbon accounts to incentivize individual energy-saving behavior and enable active citizen participation in the transition.
Policy-Technology-Market Synergy: Building a Supportive Transition Framework
A successful energy transition requires coordinated efforts across government policy, technological innovation, and market mechanisms.
Policy leadership and top-level design: Governments must establish clear, stable, and ambitious long-term energy strategies and goals (e.g., carbon peaking and neutrality targets). Carbon pricing mechanisms (e.g., carbon taxes and emissions trading systems, ETS) can internalize environmental costs and drive investment in clean energy. The EU Carbon Border Adjustment Mechanism (CBAM), expected to be fully implemented by 2026, is pushing global carbon prices upward, now over $80/ton—affecting global supply chains. Robust energy laws, standards, and planning are also essential.
Technology R&D and industrial incubation: Increase investment in cutting-edge energy technologies, supporting the full innovation chain from basic research to commercialization. Establish public or private clean energy funds (e.g., a proposed $10 billion global fund) to accelerate the maturity and adoption of disruptive technologies.
Market mechanisms and financial support: Improve power market structures to accommodate high shares of renewables (e.g., capacity markets, ancillary service markets). Develop green finance systems—through green bonds, loans, and transition finance—to channel capital into clean energy and emissions reduction projects. China’s Renewable Energy Development Fund has surpassed 500 billion RMB, providing subsidies that ensure a reasonable internal rate of return (IRR) for wind and solar projects and attract private investment.
International cooperation and global governance: As a global challenge, energy transition requires enhanced international collaboration to share technologies, experiences, and best practices. Initiatives such as transnational grid alliances (e.g., the proposed Asia Super Grid) can facilitate regional energy integration and cross-border renewable energy flows. Stronger climate negotiations and policy coordination under the UN framework are essential.
Conclusion and Global Action Initiatives
The history of human energy development is a continuous pursuit of higher energy density, greater efficiency, and broader applicability—a grand narrative of technological innovation driving social progress. Over the past few centuries, fossil fuels have powered the prosperity of modern civilization with unprecedented force, but also altered the Earth’s climate at an equally unprecedented pace, leading to severe resource and environmental challenges.
In the next 30 years, humanity will undergo the most profound and urgent energy system transformation since the Industrial Revolution. The shift from fossil fuel dominance to a sustainable energy paradigm is not only a matter of technological pathways but also a comprehensive transformation of development philosophy, economic models, and global governance frameworks. Achieving this transition will require coordinated efforts and decisive action at the global level.
Based on in-depth insights into the history of energy development and analysis of future trends, this white paper proposes the following global action initiatives:
Accelerate the Commercialization of Clean Energy Technologies
Establish international cooperation mechanisms and multilateral/bilateral funding frameworks to support the R&D, demonstration, and large-scale deployment of advanced clean energy technologies (e.g., advanced nuclear, controlled fusion, green hydrogen, CCUS, and next-generation energy storage). A Global Clean Energy Innovation Fund of no less than USD 10 billion is recommended, with a focus on disruptive innovation and cross-disciplinary integration.
Reform Global Energy Governance
Strengthen international energy cooperation and dialogue, build and improve global and regional governance mechanisms, and promote the interconnection of energy infrastructure and cross-border energy trade. Initiatives such as the development of continental and intercontinental supergrids (e.g., across Asia, Africa, and Europe) should be encouraged to optimize global energy resource allocation.
Enhance Climate Policy and Carbon Market Linkages
Countries should set more ambitious carbon reduction targets and establish effective and interconnected carbon pricing mechanisms. Gradually raise carbon prices to reflect the true social cost of climate change and redirect capital flows toward low-carbon sectors. Promote research and adoption of international carbon credit systems using technologies such as blockchain to enhance market transparency and efficiency.
Advance the Digitalization and Intelligence of Energy Systems
Increase investment in smart grids, virtual power plants, and AI for energy applications to build efficient, flexible, and resilient modern energy infrastructure capable of supporting high penetration of renewables.
Foster a Culture of Sustainable Energy Consumption and Civic Participation
Integrate energy literacy education into national curricula to raise public awareness of energy and climate issues. Promote energy efficiency standards and green consumption habits. Explore household carbon account systems based on incentive mechanisms to encourage and reward low-carbon behaviors, making energy transition a participatory cause for all citizens.
Ensure Justice and Inclusivity in the Energy Transition
Formulate policy safeguards to support workers and communities affected by the fossil fuel phase-out, ensuring a smooth and just transition. Make energy poverty eradication and energy accessibility a core agenda item of global energy transition efforts. Through technology transfer and financial aid, assist developing countries in achieving widespread access to clean energy.
The energy transition is humanity’s essential path forward and a fundamental requirement for achieving sustainable development goals. History has shown that every energy revolution comes with both enormous opportunities and challenges. Today, we stand at a new historical juncture. Seizing this transformative opportunity to build a clean, efficient, secure, and inclusive energy future is not only about addressing the climate crisis—but also about opening a new chapter in human civilization that is more prosperous, equitable, and sustainable.
