Bain & Company: energy leaders optimistic on scaling up AI and carbon capture

Global energy leaders feel increasingly enthusiastic about AI and digital tools and executives feel increasingly positive about the business cases for emerging technologies, energy storage as well as carbon capture, utilisation, and storage, according to Bain & Company’s 2025 Energy & Natural Resources Executive Survey.

The survey found that optimism around AI and digital tools is surging, with 72% of executives saying they feel positively about the 5-to-10-year business case for these technologies. Executives are also more sanguine about the business cases for energy storage (47% feel positively about this business case), renewables (45%), and circularity (39%), as well as carbon capture, utilisation, and storage (43%), the survey found.

Bain’s annual survey of more than 700 executives across oil and gas, utilities, chemicals, mining, and agribusiness offers a pulse check on industry leaders’ views on the energy transition’s challenges and opportunities, providing perspective on how they’re balancing those investments with other business priorities.

Overhauling ERP systems

While companies may have been able to put off major technology investments without significant consequences in recent years, executives are starting to recognise that those days are over, according to Bain & Company. Most say they are planning technology-enabled improvements across multiple key functions, and one of the first items on the agenda is overhauling their ERP systems – more than 60% anticipate their next ERP transformation will take place within the next three years.

“There are two major topics at the top of executives’ agendas: managing capital cost inflation and driving transformation through AI and ERP,” said Grant Dougans, a partner and leader in Bain’s Energy & Natural Resources practice. “For many, ERP transformation is no longer just an IT upgrade – it’s a strategic imperative. As software vendors phase out support for legacy systems, companies are realising that modernising their ERP can unlock powerful new business capabilities and technology tools, such as AI-driven demand forecasting, to drive efficiency and growth.”

Legacy assets key to meeting near-term energy demand

Despite record-breaking global investments in clean energy last year, the leaders of the companies tasked with delivering on the transition have become less optimistic about when the world will achieve net-zero carbon emissions, the survey found.

Nearly half (44%) of energy and natural resources (ENR) executives now expect the world to reach net-zero emissions by 2070 or later, a steep jump from the 31% that felt this way in 2024. Similarly, only 32% expect it by 2050 – a reversal from previous surveys, when around 40% to 50% foresaw net zero by 2050.

On average, oil and gas executives anticipate peak oil around 2038, a clear signal that sector leaders expect legacy assets to play a crucial role in meeting energy demand for the foreseeable future.

“Our findings make clear that what has been described as the energy transition is better understood as the dual challenge of delivering ever-increasing volumes of energy while simultaneously pushing to decarbonize,” said Joe Scalise, partner and global head of Energy & Natural Resources at Bain & Company.

“Executives remain optimistic that meaningful decarbonisation is on the horizon, perhaps just not as quickly as they originally imagined. The industry is going through a period of great innovation and transformation, and executives’ agendas are fuller than ever. Those that remain hyper focused on enacting their priorities amid this barrage of challenges will lead the way in the next era of energy.”

The era of enthusiasm for environmental, social, and corporate governance–driven investment is giving way to a harder-nosed focus on ROI. Tighter budgets, constrained balance sheets, and rapidly rising capital costs are forcing companies to make tough calls about where to place their bets, according to Bain & Company.

Executives continue to say their top roadblock to scaling up their transition-oriented growth energy (TGE) business is finding enough customers willing to pay higher prices to create sufficient ROI, with a greater portion pointing to a lack of shareholder support as a major issue this year. Other top obstacles include government policy and regulation as well as a lack of cash or capital.

Capital project costs continue to rise

More than three-quarters of executives say their capital project costs rose at least somewhat over the past 12 months, and one in 10 executives experienced extreme cost increases surpassing 20%. To deliver projects more effectively, executives intend to improve capital allocation across their portfolios, more tightly scope projects, and do a better job of engineering project value and designing project concepts. Nearly half plan to deploy technologies, including AI, to help improve project execution and outcomes.

Utilities cautiously confident about meeting AI-driven energy demands

Bain estimates data centers’ annual global energy consumption could more than double by 2027, consuming 2.6% of global energy power and costing more than $2 trillion in new energy generation resources.

Utilities executives are clear-eyed about the challenge. Most believe they can manage the demand spike, though many (43%) say that’s only if everything goes right. For utilities worldwide, the top three solutions to meet increased demand from AI and data centers are investing in more renewables, prolonging the lifespan of existing assets, and adding more natural gas assets. Nuclear is seen as a potentially important lever in North America, though executives in other regions aren’t much considering it.

To fund these investments, North American utilities executives want to put more of the onus on data centre customers via electricity price increases and project co-investments.