Energy investment in 2026: “It’s speed first, cost second, clean third”

The energy sector in 2026 will be shaped by the massive, unprecedented explosion in energy demand in advanced economies as a result of the AI race.  

In the three decades between 1990 and 2020, increases in energy demand in OECD countries rarely ventured past 1% in aggregate. But in 2024 demand grow increased to 2.2% and is expected to keep on this faster trajectory.

Businesses have been accelerating their efforts to adjust. In the past year Big Tech has increasingly put capital behind securing its energy supply, with companies like Meta, Google and Amazon investing more money in various types of baseload energy projects to power its data centres.

There has been a palpable shift away from net zero and towards an abundance of energy. The last half-decade’s emphasis on sourcing clean energy has given way to an urgency for more. The time pressure is real and there is a sense that for a nation to win the AI race, it will also have to solve the problem of energy supply.

 ”Where I see the risk is, are we able to put all the pieces together in a timeframe that everyone wants? Is there a real national strategic advantage in winning the AI race? Because to do that, you need all this infrastructure, and to have all of this infrastructure, you need all these pieces to come together,” says Pradeep Tagare, head of investments at National Grid Partners.

“Fundamentally, it's hard to get all these pieces to come together in an accelerated timeframe. That's the challenge.”

Need to win

“The priorities are clearer now. It’s speed first, cost second, clean third,” says Alejandro Solé, chief investment officer at TechEnergy Ventures, the VC arm of industrial conglomerate Techint Group’s energy division, Tecpetrol.

AI has changed the calculus for the large energy customers in tech. Whereas five years ago, tech companies were tripping over themselves to sign renewable power purchase agreements to shore up their green bona fides, they now care far less how green it is.

“The mandate has now changed to: I need to win,” says Solé.

“The velocity and pragmatism with which the world has refocused on this topic has been surprising. There are a lot of good energy startups that, if they’re not at the centre of AI, it’s as if no one is interested, even if they have a lot to offer.”

On the upswing

In terms of venture deal flow, the energy sector was famously unique in its resiliency through the venture downturn, with the number of corporate-backed funding rounds relatively constant even as they dipped in other sectors.