Global electricity use is growing again, but renewables are expected to overtake coal as the world’s largest source of electricity this year, according to the International Energy Agency (IEA).
The IEA’s latest Electricity Mid-Year Update forecasts that global power demand will grow 3.6% in 2026 and another 3.8% in 2027, up from 3% growth last year.
That would push global electricity consumption from 28,600 terawatt-hours (TWh) in 2025 to 30,700 TWh in 2027. Industry, air conditioning, appliances, EV charging, and data centers are driving the increase.
Renewables are expected to cover a growing share of that demand. Renewable electricity generation is forecast to rise by more than 8% this year, lifting its share of the global power mix from 33% in 2025 to 37% in 2027.
Solar keeps surging
Solar is once again doing much of the heavy lifting.
The IEA expects solar generation to grow by around 600 TWh in 2026, matching its record increase in 2025, followed by another strong year in 2027. Solar is also forecast to pass wind this year to become the world’s second-largest source of renewable electricity after hydropower.
That growth is helping countries diversify their electricity supplies at a time when natural gas markets are being rattled by the war in the Middle East.
Disruptions to liquefied natural gas (LNG) shipments through the Strait of Hormuz sent gas prices in Asia and Europe to their highest levels since the 2022-23 energy crisis. Some regions introduced emergency measures to curb energy use, while several countries in Asia and Europe switched from gas to coal to keep electricity costs under control.
Additional LNG supplies, particularly from North America, have eased some of the pressure. But the IEA says rising renewable generation has also helped power systems weather the shock by reducing their dependence on imported fuel.
China, India, and the US push demand higher
China’s electricity demand is forecast to grow 5.5% in 2026, driven by manufacturing and expanding EV charging. India’s growth is expected to rebound to 7% after weather-related weakness last year.
Electricity use in both the US and European Union is forecast to grow by nearly 2%. In the US, data centers are contributing to rising demand after nearly two decades of relatively flat electricity consumption.
Higher fuel costs and supply disruptions are having the opposite effect in more price-sensitive Asian markets that rely heavily on imported LNG. Electricity consumption is being squeezed in countries including Pakistan and Bangladesh.
Weather remains a big wild card. The IEA warns that a stronger-than-expected El Niño could push electricity demand even higher by increasing air-conditioning use. At the same time, it could reduce hydropower and wind generation in some regions, forcing power systems to lean more heavily on other energy sources.
Coal pushes emissions higher – for now
Global carbon emissions from electricity generation are forecast to rise by around 1% in 2026 before leveling off in 2027.
Coal generation is increasing as high gas prices encourage fuel switching, but continued renewable growth and a strong rise in nuclear output are expected to prevent power-sector emissions from climbing again next year.
The LNG shock is also showing up in wholesale electricity prices. Average spot prices in the EU and Japan jumped by more than 30% year over year during Q2 2026. US wholesale prices remained broadly stable, while prices in India rose by less than 10%.
Meanwhile, the rapid buildout of renewables is producing more periods of negative wholesale electricity prices in some markets. That’s a clear sign that grids need more flexibility to absorb abundant wind and solar when they’re available.
Battery storage, demand response, and other flexible resources will become increasingly important as daily electricity price swings grow wider. The IEA asserts that grids will need to get much better at matching the world’s new power demand with increasingly variable supplies.
Read more: IEA: Global EV sales headed for another record year despite the early stumble
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