Renewables overtake coal as global power demand jumps 3.6%
SkimNews Take
Passing coal during a demand boom — not a flat-decline phase — means renewables are expanding the grid rather than displacing within it, signaling a far larger capital cycle than past fuel transitions.
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- IEA forecasts global power demand will grow 3.6% in 2026 and 3.8% in 2027, lifting consumption from 28,600 TWh to 30,700 TWh as industry, air conditioning, appliances, EV charging, and data centers drive the increase.
- Renewables are projected to overtake coal as the world's largest electricity source this year, with their share of the global power mix rising from 33% in 2025 to 37% in 2027 on generation growth above 8%.
- Solar generation is expected to grow roughly 600 TWh in 2026, matching its 2025 record increase, and to surpass wind to become the second-largest renewable electricity source after hydropower.
- China's electricity demand is forecast to grow 5.5% in 2026 driven by manufacturing and EV charging, while India's rebounds to 7% and US/EU demand rises about 2%.
- LNG disruptions through the Strait of Hormuz pushed Asian and European gas prices to their highest since the 2022-23 energy crisis, prompting several countries to switch from gas to coal and triggering emergency energy-use measures.
- Pakistan and Bangladesh are seeing electricity consumption squeezed as higher fuel costs and reliance on imported LNG hit price-sensitive Asian markets harder.
- EU and Japan wholesale electricity spot prices jumped more than 30% year over year in Q2 2026, while US prices held broadly stable and India's rose less than 10%.
Why it matters: The headline narrative of renewables overtaking coal obscures that coal generation is still expanding right now — pushed up because high gas prices are forcing fuel switching — which lifts power-sector emissions roughly 1% in 2026 before leveling off in 2027. Meanwhile, the same renewable boom is producing more negative wholesale prices, exposing how inflexible current grids are at absorbing variable supply.
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