Simply put, “energy transition” refers to a shift in energy sources — the materials used to power our world. While it might seem like a trendy term, the concept is anything but new. In fact, society has already undergone two major “energy transitions,” moving from firewood to coal to oil. And now, we’ve reached another pivotal point in the energy revolution.   

At its core, this energy transition is about moving from a reliance on traditional, carbon-based sources to more efficient and lower carbon options, such as renewables (wind, solar, hydropower) and even nuclear energy. It’s also about modernizing our power grid, making it more efficient, reliable, resilient, and decentralized. In short, we’re not simply looking to swap energy sources, we’re reshaping how energy flows through our communities and our lives. And just like the energy transitions of the past, technology plays a critical role in driving and defining this next era of energy.   

Why the Energy Transition Matters Now 

The urgency of this transition stems from multiple factors — regulatory commitments, private sector initiatives, and our evolving consumption habits. Governments worldwide have agreed to ambitious energy goals, such as those outlined in the Paris Climate Accords, which set a target to reduce emissions by 43% by 2030. Countries are working toward meaningful changes in their energy systems to meet this timeline and those outlined in other agreements. 

On the private sector front, many companies are committing to more sustainable energy practices for a variety of reasons, including cost savings, a sense of social and environmental responsibility, and to maintain a competitive edge. The evolving expectations of consumers are driving businesses to rethink their energy strategies — particularly consumers belonging to Gen Z, a group dubbed “the sustainability generation” and known for spotting inauthentic brand promises.  

What makes this moment so important is that the world is not just shifting to cleaner energy sources, but is also laying the groundwork for a global infrastructure that can support increasing demands for sustainable solutions and a growing population. Already, there are more than three times as many people in the world as there were in the mid-20th century, and the population is expected to increase by nearly 2 billion in the next 30 years. This transition will address not only energy production, but also the technology and infrastructure needed to maintain a resilient, decentralized energy network. 

Technology’s Role: Now and Into the Future 

Technology is making the energy transition both possible and essential. It’s not just transforming how we produce and use energy, but also driving demand in ways that make this shift more urgent — while evolving our relationship with energy.  

One example of how innovation is — literally — driving the need for the energy transition is electric vehicles (EVs). Improvements in EV technology kickstarted EV adoption, and now, having more EVs on the road is intensifying demand for infrastructure upgrades. That demand is evidenced by government initiatives, like the U.S. Department of Transportation’s recent announcement of $521 million in grants to build out the national vehicle charging network. These types of investments support the growing adoption of electric mobility, reducing reliance on gasoline while empowering consumers to take a more active role in the energy ecosystem.  

Data centers are another interesting factor in this energy transformation. Technologies like AI, cloud computing, 5G networks, and cryptocurrency have caused an uptick in energy demand at data centers, due to the amount of computing power they require. Estimates show that data center electricity consumption for the U.S. alone could reach nearly 260 terawatt-hours (TWh) by 2026, roughly equivalent to Japan’s total energy consumption. However, technology is already solving its own energy usage issues, with advances in AI and energy-efficient technologies helping to mitigate this impact. One excellent example is Brainchip’s Akida™ on-chip learning technology, which reduces reliance on cloud computing by enabling AI processing to occur locally, thereby lowering latency and energy consumption while enhancing security.  

The data centers that support many of today’s promising technologies are also spurring innovation in energy-efficient temperature control. Cooling systems account for about 40% of data centers’ energy usage, and already, smart HVAC systems are making an impact. Supported by IoT solutions from companies like Eaton, Microchip Technology, and Intellias, these technologies optimize energy use, predict maintenance needs, and ensure that both enterprises and consumers are part of a more efficient, responsive energy grid. 

Looking forward, the future of energy lies in decentralized systems powered by smart technologies. From small modular reactors (SMRs, a new type of nuclear plant) to battery storage systems operating at residential, commercial, and grid scales, there are already a variety of innovations being developed and deployed that help make more localized energy usage possible.    

Just as digital health solutions revolutionized health care, empowering individuals to take more control of their own well-being, decentralized energy systems will allow businesses and individuals to generate, store, and distribute their own energy. Eaton’s "everything as a grid" approach exemplifies this shift by integrating various energy sources and storage solutions into a cohesive, flexible system. This enhances grid stability, while also helping consumers manage their energy use more effectively, reducing reliance on centralized power plants. In the same vein, Haus.me’s self-sustaining, solar-powered homes show the potential for entirely off-grid living, offering energy efficiency that’s 20 times greater than the average U.S. household. These advancements highlight the transformative potential of smart home technologies and energy management systems. By enabling more efficient and sustainable living, they pave the way for a future where energy resilience and innovation are at the forefront. 

As we stand on the brink of this new energy era, it’s clear that the transition is about more than just changing our power sources; it’s about leveraging technology to build a sustainable, efficient, and resilient energy system capable of meeting society’s evolving needs. From smart grids to decentralized energy solutions, the advancements we develop and embrace today will shape the evolution of our power infrastructure for generations to come.  

See It at CES 

The energy transition is a multifaceted process requiring innovation across many sectors –– and CES is the only place where you can see the full picture. Discover solutions from forward-thinking companies in energy/power, EV infrastructure, and other key industries now, then join them in Las Vegas for up-close looks at their latest advancements.