In a groundbreaking projection, the International Energy Agency (IEA) anticipates that renewable energy sources will outpace coal, emerging as the predominant global electricity source by early 2025. According to the IEA’s latest report on the electricity market published on Wednesday, renewables are expected to constitute 37 percent of total electricity generation by 2026, up from the current 30 percent in 2023. This transformation is primarily attributed to the decreasing costs of photovoltaic solar energy.
The report also underscores a decline in electricity generation from coal, with an average annual reduction of 1.7 percent until 2026. The decrease is primarily linked to the anticipated decline in China’s use of fossil fuels. The share of fossil fuels in global electricity generation is predicted to dip from 61 percent in 2023 to 54 percent in 2026, marking a notable shift below 60 percent for the first time since 1971.
IEA Executive Director Fatih Birol commented on the significance of these changes, stating, “The power sector currently produces more CO2 (carbon dioxide) emissions than any other in the world economy.” He further highlighted that the rapid growth of renewables and the steady expansion of nuclear power are on track to meet the entire increase in global electricity demand over the next three years.
The report forecasts that nuclear power generation will reach an all-time high by 2025, driven by new reactors in various markets, including China, India, Korea, and Europe. Together, nuclear energy and renewable sources are expected to contribute to almost half of the world’s electricity generation by 2026, compared to just under 40 percent in 2023.
While the report notes a slower increase in global electricity demand in 2023, with a rise of 2.2 percent compared to 2.4 percent in 2022, IEA anticipates an acceleration to an average of 3.4 percent from 2024 through 2026. The majority of this surge, approximately 85 percent, is expected to come from outside advanced economies, notably China, India, and Southeast Asian countries.
Additionally, the IEA report highlights a significant increase in electricity consumption worldwide, driven by data centers, artificial intelligence, and the cryptocurrency sector. Consumption is projected to more than double from 460 terawatt-hours (TWh) in 2022 to over 1,000 TWh in 2026.
