IEA: Renewable Energy Expected to Cover 90% of Global Electricity Demand Growth by 2025

Global electricity demand is forecast to grow by 3.3% by the end of 2025 and by 3.7% in 2026, with renewable energy—primarily wind and solar—expected to account for more than 90% of this increase.

These findings come from the International Energy Agency’s (IEA) Electricity Mid-Year Update 2025, which indicates that despite slower economic activity limiting new power generation investments, electricity consumption continues to rise. The report also highlights that electricity demand is projected to grow at more than double the pace of total energy demand this year.

Asia-Pacific as the Main Growth Driver

The Asia-Pacific region is expected to lead this growth, with electricity demand projected to exceed 15,000 TWh by the end of 2025. Within this, China is forecast to surpass 10,000 TWh in 2026, contributing to nearly half of the global increase in electricity demand.

Although China’s annual electricity demand growth is slowing slightly—from 7% in 2024 to 5% in 2025—its large industrial base ensures its significant influence on the global power market.

Renewable Energy and Energy Storage Transforming the Grid

The IEA report underscores that renewable energy, especially solar, will be central to meeting this rising demand. Depending on weather conditions and market trends, renewables could overtake coal as the world’s leading source of electricity generation as early as 2025 or by 2026.

The share of wind and solar in the global electricity mix is expected to grow from 15% in 2024 to 17% in 2025, and reach 19% in 2026, while coal’s share is forecast to drop below one-third for the first time in a century. Solar generation alone is projected to increase by 27% year-on-year in 2026, while coal-fired generation is likely to remain stable.

In the United States, solar generation rose by approximately 30% from late 2024 to mid-2025, driving an 11% increase in total renewable generation. Meanwhile, Europe is expected to see only a modest 2% rise in renewable output this year, due in part to weaker wind resources. Nevertheless, low-emission sources in Europe’s electricity mix are expected to climb from 71% in 2024 to 75% by 2026.

Electricity Prices and the Role of Energy Storage

The report also notes notable regional variations in power prices. In the EU, wholesale electricity prices were up roughly 30% in the first half of 2025 compared to the same period in 2024, largely driven by higher natural gas prices. The US and Japan also recorded increases of around 40% and 15%, respectively.

By contrast, the Nordic region experienced a 20% decline in electricity prices due to stronger wind and hydropower output. Australia also saw a decrease in prices, supported by an 86% rise in battery energy storage system (BESS) output, which helped stabilize its grid as renewable energy penetration grew.

Zero and negative electricity prices are becoming more frequent in markets with high renewable capacity. In Germany, the Netherlands, and Spain, negative price hours doubled to 8–9% during the first half of 2025. France, meanwhile, recorded zero or negative prices on 90% of the days in May.

Building the Future of the Power Grid

The IEA emphasizes that while the rapid growth of renewable energy is reshaping global power markets, it must be matched by investments in transmission networks, energy storage, and other flexibility solutions to maintain grid stability and affordability.

As electricity demand continues to rise and renewables take a dominant role in meeting this growth, the development of robust grid infrastructure and large-scale energy storage systems will be critical for ensuring a reliable, sustainable energy future.