Energy transition priorities are being reshaped by a range of factors defining today’s world.
Electrification is driving rapid growth in energy demand across transport, industry and digital infrastructure, while AI advancements and data centre expansion are placing increasing pressure on power systems. Geopolitical developments are recalibrating investment priorities. There is growing urgency to scale clean energy and diversify supply chains, with a stronger focus on solutions that align climate objectives with energy security and global competitiveness.
Recent IEA data shows energy transition investment reaching record levels globally, with particularly strong growth in EMEA. Investment has been strongest in electrified transport, renewable power, and grid infrastructure.
Against this backdrop, Mizuho EMEA hosted a panel discussion, chaired by Naoaki Chisaka, Deputy Head of CIB Banking, to look at how the energy transition is evolving, where momentum is building, where challenges remain, and where opportunities lay for Mizuho to support the transition.
The rise of renewables
“Today, around 80% of global energy investment is going into renewables. About half of European electricity comes from renewable sources, and solar alone has become a very large global market” stated Charlie Hodges, Partner at Augusta & Co, a Mizuho company.
A combination of policy support, strong corporate demand and increasingly mature supply chains has made renewables one of the most attractive areas of investment globally. Wind and solar are often among the most competitive technologies to build and can typically be deployed faster than many conventional alternatives, although permitting in Europe remains uneven and, in many markets, still represents a significant bottleneck rather than a straightforward advantage.
In the Middle East, the energy story has long been shaped by the need for power and water. Historically, abundant oil and gas supported electricity generation and desalination, but solar is now one of the cheapest forms of power in the region, making it attractive not only for electricity generation but also for water production through reverse osmosis. As a result, much of the current investment in regional power build-out is now going into renewable energy.
However, the transition is not a simple replacement story.
“There is still a live debate about whether this is a true transition or simply an addition of renewable capacity alongside fossil fuels to meet rising energy demand. Even so, the economics of renewables are improving steadily, and over time that should lead to a more meaningful shift in the overall energy mix,” shared Junaid Belo-Osagie, ED, Infrastructure and Advisory at Mizuho EMEA.
Grid capacity, stability, and connectivity
Despite strong investment in generation, grid infrastructure remains a key bottleneck in meeting rising energy demand. In hindsight, the industry delivered renewable generation faster than it built the transmission needed to support it.
Our panellists emphasised that unlocking the next phase of the transition depends heavily on solving this infrastructure challenge.
“Grid capacity is a major constraint,” noted Kieran Douglas, Head of Energy, Power and Resources & Head of UK Corporate Coverage at Mizuho EMEA. “Unlike hydrocarbons, electricity cannot yet be transported economically over very long distances without extensive infrastructure. Across the UK and Europe, grid networks are old, patchy, and in need of very significant investment.”
“Grid capacity cannot be separated from grid stability. Wind and solar are intermittent, so systems still need dependable baseload support to maintain stability when renewable output drops,” said Dexter Maitland, Head of Power and Energy Transition at Mizuho EMEA in agreement.
One of the key players stemming out of the need for sustained consistency in energy supply is battery energy storage systems (BESS). By storing electricity at scale through rechargeable batteries, BESS allow surplus energy generated during periods of low demand to be deployed when demand rises, helping grid stabilisation and serving as a backup in times of need. As a result, they are attracting significant investment as a practical short- to medium-term solution to support stability and continuity in the transition to a more resilient energy system.
Mizuho and Augusta & Co are proud to support clients in this space across EMEA, unlocking investment opportunities and driving growth in one of the energy sector’s fastest-growing markets. Read more here to see how we have been partnering with clients in this space.
On the other hand, attention and investment is also shifting towards new energy carriers to support cross-border supply. One such example is hydrogen.
“Hydrogen offers a way to transport energy where grid infrastructure cannot, particularly across borders, by converting it into a transportable fuel or energy carrier,” said Junaid. “It also plays an important role in hard-to-abate sectors such as aviation, maritime and heavy industry, where direct electrification is not feasible.”
Clear business models supported by political will
Rising financing costs are reshaping the energy sector, with Charlie noting that the increase in cost of capital has been one of the most significant shifts in recent years. In response, investors are becoming more selective, seeking stronger returns and clearer business models.
Kieran identified two stand-out issues that need to be addressed to create an enabling environment for energy transition investment: business model clarity and political will.
“Long-term investment depends on predictable regulation, planning regimes, and policy support. Government support remains essential, and without long-term commitment and political stability, the pace of transition will be slower than it needs to be,” he shared.
There are examples where this is already working. The Japanese Strategic Energy Plan formulated by the Ministry of Energy, Trade and Industry outlines how various energy sources are expected to contribute to the Japanese energy mix by 2030 and 2040. It leverages existing and emerging technologies to achieve decarbonisation in a steady, phased manner to ensure energy security.
Junaid highlighted: “Japan shows how political will can shape energy strategy. Its long-term commitment to add hydrogen to the energy mix demonstrates how policy can accelerate both technology development and market formation.”
Supporting our clients through the transition
The energy transition continues to present a compelling long-term opportunity, but progress will depend on building the right infrastructure, scaling viable technologies, and maintaining stable policy frameworks that can translate today’s momentum into lasting progress.
Mizuho recognises that today’s environment is complex, but it also offers important opportunities to continue supporting our clients’ decarbonisation journeys through financing, advisory and partnerships.
We understand that transition in the real economy is not uniform, with no one-size fits solution; decarbonisation depends on understanding the specific challenges faced by each sector, the technologies available, the investment required and the need to balance ambition with commercial reality.
