World's reliance on renewable energy set to surpass fossil fuels by 2026, as per the International Energy Agency's prediction.
In a significant shift in the global energy landscape, renewable energy sources are poised to take the lead in electricity generation, with coal-fired power set to decline significantly. This transformation is driven by falls in coal consumption in China and the EU, leading to a decline in power-sector emissions.
According to the International Energy Agency (IEA), the coming decline of coal is attributed to "continued renewables growth and higher coal-to-gas switching in multiple regions." This shift is expected to result in a reduction of coal's share of global electricity generation below 33%, its lowest in a century.
On the other hand, gas power is expected to rise by 1.3% this year and next. However, the increase in global electricity demand out to 2026 will be met primarily by renewables, especially wind and solar, which are projected to cover more than 90% of the increase. Renewables, specifically wind and solar, topped 4,000 terawatt hours (TWh) in 2024 and are expected to pass 6,000TWh by 2026.
The growth in electricity demand is contributing to the expansion of renewables. The IEA identifies new demand for electricity as coming from industry, domestic appliances, growing use of air conditioning, ongoing electrification of heat and transport, and the expansion of data centers.
By 2026, global electricity demand is projected to grow rapidly—about 3.3% in 2025 and 3.7% in 2026—the fastest pace in over a decade. This growth will be overwhelmingly met by renewables, especially wind and solar PV. These renewable sources are expected to surpass coal as the world’s largest power source by 2025 or 2026.
Modest growth for hydro power will also contribute to renewables' rise. The shift to wind and solar is happening despite global electricity demand growing much faster over the next two years than the average for 2015-2023.
The global reduction in coal-fired electricity generation will result from declines in China and the EU, which will only be partially offset by increases in the US, India, and other Asian nations. Renewables could overtake coal as early as this year, depending on weather-related impacts on the output of wind and hydro capacity.
This energy transition will lead to CO₂ emissions from electricity leveling off in 2025 and slightly declining in 2026, although these trends depend on weather and fuel prices. The transition necessitates investments in grid flexibility, storage (e.g., batteries), and stable supply to handle intermittent generation and price variations.
This projected shift marks a pivotal milestone in the global energy transition, emphasizing renewable energy’s dominant role while fossil fuel use, especially coal, contracts in the power sector over the near term.
- The International Energy Agency (IEA) attributes the coming decline of coal to "continued renewables growth and higher coal-to-gas switching in multiple regions," leading to a reduction of coal's share in global electricity generation below 33%.
- Renewables, especially wind and solar, are expected to surpass coal as the world’s largest power source by 2025 or 2026, as they will cover more than 90% of the increase in global electricity demand out to 2026.
- The growth in electricity demand is contributing to the expansion of renewables, with new demand coming from industry, domestic appliances, growing use of air conditioning, ongoing electrification of heat and transport, and the expansion of data centers.
- Modest growth for hydro power will also contribute to renewables' rise, but the shift to wind and solar is happening despite global electricity demand growing much faster over the next two years than the average for 2015-2023.
- The global energy transition will necessitate investments in grid flexibility, storage (e.g., batteries), and stable supply to handle intermittent generation and price variations, as this transformation in energy sources could lead to CO₂ emissions from electricity leveling off in 2025 and slightly declining in 2026.
