The global energy sector is entering a period of uncertainty that could affect investment decisions, according to the Reuters Events Energy Transition Insights Report 2025. For trustees and administrators of Texas public employee retirement systems, understanding these shifts is important for evaluating risks, monitoring portfolio exposure, and ensuring fiduciary oversight in a changing market. Note: Readers must sign up with Reuters Events to download the full Global Energy Markets Insights Report.

The report, based on surveys of more than 1,400 senior energy professionals, found that over half of respondents expect their organization’s energy transition strategy to change within the next 12 months. Political and economic factors were cited as major influences, alongside long-term business strategy, which remains the leading driver of transition planning.

Key Findings

The 2025 report outlined several significant shifts shaping the energy transition:

• Strategy drivers are shifting: A majority of respondents, 61 percent, said long-term business strategy is the primary reason for their transition efforts. Political and economic pressures increased to 47 percent, marking a sharp rise from previous years, according to Reuters.
• Regional differences in renewable energy growth: Nearly 70 percent of Asia-Pacific respondents and 51 percent of European respondents said they expect to increase their investment in renewables, compared with 36 percent in North America. In the U.S. and Canada, 22 percent said they expect renewable energy investment to decline, reflecting more caution than in other regions.
• Investment priorities remain steady but are evolving: Operational efficiency, energy storage, and digitization or artificial intelligence continue to dominate as the top investment destinations. Reuters noted that solar photovoltaic projects slipped in priority, a change linked to policy shifts and supply chain pressures.
• Revenue outlook remains positive: Despite market uncertainty, most respondents expect revenues from clean energy sources to increase in the near term. Across renewables, utilities, hydrogen, and oil and gas, a majority of forecasters expect increased revenue from non-fossil sources over the next three years.

Actionable Insights

The report highlighted several themes that energy organizations are using to guide decisions in a volatile environment:

• Long-term vision balanced by near-term pressures: While most companies continue to view the energy transition as central to future competitiveness, Reuters found political and economic conditions are having a growing influence on strategy development. More than 47 percent of respondents cited these factors as drivers.
• Operational efficiency as a universal priority: Investments to make existing assets more efficient ranked at the top across all regions. According to Reuters, efficiency upgrades are viewed as a lower-risk way to strengthen transition plans compared with large-scale, capital-intensive projects.
• Renewables outlook varies by region: Reuters reported that investment sentiment remains strongest in Asia and Europe, while North American respondents showed more caution, with 22 percent expecting renewables investment to decline in 2025.
• Emerging focus on digitalization and grid infrastructure: The study noted that asset digitization, artificial intelligence, and grid upgrades are drawing more capital as organizations adapt to policy and market changes. These areas are expected to complement rather than replace renewables.

Responding to Trump’s Second Term

Nearly half of respondents reported that their organization has adapted its overall strategy in response to policies enacted during the first 100 days of the Trump administration. Another third said they are waiting to see what happens before making major changes.

The report noted some early signs of investment shifts away from North America, with Europe, Asia, and the Middle East identified as likely beneficiaries. Offshore wind projects were seen as particularly vulnerable, while grid infrastructure and asset digitization were expected to gain.

Survey respondents also highlighted the challenges faced by renewables and hydrogen developers under current policies, although overall expectations for long-term clean energy revenue growth remain positive.

Financial Impact

The report stated that investment growth in renewables is expected to slow in the short term. However, revenues from clean sources are still projected to increase. About 60 percent of respondents across most sectors anticipate growth in non-fossil fuel revenue during the next three years. Nuclear power was the exception, with just under half expecting growth and 15 percent forecasting a decline.

Compared to last year, fewer organizations expect significant increases in renewable energy investment. In 2024, a 30 percent growth forecast is anticipated, with a potential increase of over 40 percent. In 2025, that number fell to 22 percent, with more respondents predicting slower gains of 0 to 10 percent. Reuters reported that the results reflect supply chain turbulence, financial constraints, and a shift away from capital-intensive projects.

Why This Matters for TEXPERS Members

The Reuters report tracks global trends, but the implications reach directly into the work of Texas public retirement system trustees and administrators. Pension systems are long-term investors. That means short-term policy changes and market turbulence—such as those highlighted in the report—can impact fund performance, asset allocation strategies, and fiduciary oversight.

For trustees, this research is a reminder to:

• Monitor how global policy and economic shifts may influence the performance of energy and infrastructure assets in retirement portfolios.
• Ask investment managers how they are positioning funds in response to regional differences in energy transition investments.
• Recognize that operational efficiency, grid infrastructure, and digitization are emerging priorities worldwide, potentially shaping where future opportunities and risks lie.
• Keep the focus on fiduciary duty: ensuring beneficiaries’ retirement security while navigating markets marked by uncertainty and change.

By staying informed on these developments, TEXPERS members can better evaluate risks, opportunities, and governance practices that support the long-term health of their pension funds.

About the Survey

Reuters reported that the survey is based on data collected in the first and second quarters of 2025. Respondents included decision-makers from renewable energy developers, utilities, oil and gas companies, independent power producers, and grid operators across multiple regions.