Global electricity consumption is forecast by the International Energy Agency (IEA) to grow by 3.6% in 2026 and a further 3.8% in 2027, following 3% growth in 2025. Key drivers include industry, air conditioning, electric vehicles, household appliances and data centres. At the same time, disruptions to LNG supplies through the Strait of Hormuz and rising gas prices have increased power generation costs in several regions and led to greater reliance on coal.
Renewable energy generation continues to expand rapidly and is expected to become the world’s largest source of electricity in 2026, overtaking coal. Its share of global electricity generation is projected to rise from 33% in 2025 to 37% in 2027. Solar power is growing particularly quickly: solar generation is expected to increase by around 600 TWh in 2026, surpassing wind power for the first time to become the second-largest source of renewable electricity after hydropower.
Demand growth is expected to remain strong across the world’s largest economies, reaching 5.5% in China, 7% in India, and around 2% in the United States and the European Union. Global CO₂ emissions from power generation are forecast to rise by around 1% in 2026 before stabilising in 2027, supported by continued growth in renewables and nuclear power. Meanwhile, the growing share of renewable generation is contributing to greater price volatility and more frequent periods of negative wholesale electricity prices, increasing the importance of energy storage and demand-side flexibility.
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