By 2026, the report estimates that renewables and nuclear will jointly contribute to nearly half of the global power generation, up from less than 40 percent in 2023. This shift is crucial as the United Nations emphasizes the transition to clean energy as a key factor in limiting global warming to 1.5 degrees Celsius above preindustrial levels.
IEA Executive Director Fatih Birol highlighted the promising trends of renewables, led by affordable solar power and the resurgence of nuclear power, as key factors meeting the increased global electricity demand over the next three years.
At the COP28 climate summit in Dubai, participants agreed on a plan for phasing out fossil fuels and committed to tripling renewable capacity by 2030. This shift in the electricity mix is expected to reduce emissions from the power sector, which is currently the largest source of carbon dioxide emissions worldwide.
Despite a modest 2.2 percent growth in global electricity demand in 2023, an acceleration to an average annual increase of 3.4 percent is projected from 2024 to 2026. This surge is driven by factors like home and business electrification, the proliferation of electric vehicles, and industrial expansion.
Significant growth in electricity usage from data centers worldwide is anticipated, potentially doubling between 2022 and 2026. Regulatory updates and technological advancements are essential to manage this energy consumption increase effectively.
Emissions from the electricity sector are expected to decrease following a 1 percent rise in 2023, with a more than 2 percent reduction projected in 2024 and continued declines in subsequent years. This reduced carbon intensity in electricity generation will enhance the emissions savings from electrifying cars and appliances.
Natural gas-fired power is predicted to see a modest increase over the next three years, primarily replacing coal power. While Europe has witnessed sharp declines in gas power, growth in the United States, Asia, Africa, and the Middle East is expected due to available liquefied natural gas supplies.
By 2026, fossil fuels are forecasted to account for 54 percent of global generation, dropping below 60 percent for the first time in over five decades. The U.S. is anticipated to boost renewable generation by approximately 10 percent annually between 2024 and 2026, surpassing coal generation in 2024.
The report warns of potential risks to clean energy trends, including droughts impacting hydropower, extreme weather affecting electricity reliability, and supply chain interruptions threatening new renewable and nuclear projects.
Keisuke Sadamori, IEA’s director of energy markets and security, underscores the need for continued investment in grid infrastructure to integrate incoming renewable energy and sustain the power sector's trajectory towards emissions reduction goals.