Global power demand to grow 3.6% in 2026 as renewables overtake coal: IEA
The International Energy Agency (IEA) projects global electricity demand will grow 3.6% in 2026 and a further 3.8% in 2027, pushing global consumption from about 28,600 to 30,700 terawatt-hours (TWh).
For the first time at a global scale, renewable electricity generation is projected to overtake coal generation in 2026, after the two sources were near parity in 2025.
Renewable generation is projected to expand at roughly 8% a year, rising from about 33% of global electricity generation in 2025 to around 37% by 2027; solar PV alone is expected to add about 600 TWh of generation in 2026, matching 2025's record expansion and making solar the second-largest renewable source after hydropower.
Demand growth is being driven by industrial activity, electric vehicle adoption, air conditioning and household appliance use, and data centre expansion.
India-specific figures cited in the report show electricity demand rebounding sharply, with renewables and gas trends diverging from the domestic coal-dependent baseline.
The International Energy Agency (IEA) and India's Association Status
The IEA is a Paris-based autonomous intergovernmental organisation, established in 1974 (under the OECD framework, following the 1973-74 oil crisis) to coordinate policy on energy security and, more recently, clean energy transitions and data. It is distinct from the IAEA (nuclear-focused) and OPEC (an oil-producer cartel).
Key Details
- The IEA has full "member countries" (mostly OECD/industrialised economies) and separate "association countries" — India holds association country status, meaning it engages closely with IEA work and reporting (as reflected in its NDC being tracked in the IEA policy database) without full membership voting rights.
- The IEA's core historical mandate includes coordinated strategic petroleum reserves among members; its mandate has since broadened to cover renewables, efficiency, and clean-energy investment tracking.
- IEA's annual/periodic outlooks (like this power demand report) are widely cited benchmarks for tracking the global energy transition.
This report is a flagship IEA output tracking the pace of the renewables-versus-fossil-fuel transition worldwide — exactly the kind of data India, as an association country, draws on for its own energy planning and NDC reporting.
"Renewables Overtaking Coal" — What the Generation-Mix Shift Means
Global generation share moving from coal-dominant to renewables-dominant is a structural milestone, not merely a one-year statistical blip: it reflects sustained capacity additions (mainly solar and wind) outpacing new coal capacity, alongside falling renewable costs and grid integration improvements.
Key Details
- Renewables' share of global generation is projected to rise from about 33% (2025) to about 37% (2027), an 8% annual expansion rate.
- Solar PV is the single largest incremental contributor, projected to add roughly 600 TWh of new generation in 2026 alone.
- This is a global aggregate trend; individual large economies (including India and China) still rely heavily on coal for grid stability and base-load power even as they add renewable capacity rapidly.
The renewables-overtaking-coal milestone is a useful global benchmark against which to measure India's own, slower-paced coal-to-renewables transition, discussed below.
India's Energy Transition: NDC Targets and the Continuing Role of Coal
India's Nationally Determined Contribution (NDC) under the Paris Agreement commits to achieving about 50% of installed electric power capacity from non-fossil-fuel sources by 2030 (a target updated in August 2022 ahead of COP27). Unlike the global generation-mix trend, this is an installed-capacity target, not a generation-share target — coal continues to supply the majority of actual electricity generated in India because it runs at much higher capacity utilisation than intermittent renewables.
Key Details
- India reportedly reached 50% non-fossil-fuel installed capacity ahead of the 2030 deadline, driven by rapid solar and wind capacity additions.
- Despite this capacity milestone, coal still supplies the bulk of actual electricity generated in India, because renewables (solar/wind) have lower capacity utilisation factors than coal/gas plants.
- The IEA report notes India's electricity demand rebounding by about 7% in 2026 (up sharply from 1.6% in 2025), with peak demand hitting a record and gas-fired generation falling, reflecting strong industrial/services growth and heatwave-driven cooling demand.
India's trajectory — rising installed renewable capacity but continued generation-share reliance on coal — illustrates why the global "renewables overtake coal" milestone in generation terms is not yet mirrored domestically, even as capacity-based NDC targets are being met early.
- Global electricity demand growth: 3.6% in 2026, 3.8% in 2027 (IEA projection); absolute demand rising from ~28,600 TWh to ~30,700 TWh.
- Renewables' share of global generation: ~33% (2025) rising to ~37% (2027); renewables projected to overtake coal globally in 2026.
- Solar PV addition in 2026: approximately 600 TWh of new generation, matching 2025's record pace.
- India: electricity demand growth rebounds to ~7% in 2026 (from 1.6% in 2025); peak demand hit a record 270.8 GW in May; variable renewables crossed 100 GW in July; renewables reached ~16.5% of India's electricity mix by mid-2026; gas-fired generation fell 15% year-on-year.
- India's NDC target: ~50% of installed electric power capacity from non-fossil-fuel sources by 2030 (updated August 2022), reported as achieved ahead of schedule.