A new report from the International Energy Agency forecasts that renewables and nuclear power will together account for half of the world’s electricity generation by the end of this decade, as global power demand continues to grow strongly.
According to Electricity 2026, the IEA’s latest annual assessment of global electricity systems and markets, worldwide power demand is set to rise by more than 3.5% a year on average through 2030. Electricity generation from renewables, natural gas and nuclear is expected to expand in parallel to meet this growth.
The report finds that electricity demand is increasing at least two and a half times faster than overall energy demand, driven by higher industrial electricity use, rapid uptake of electric vehicles, increased cooling demand, and the expansion of data centres and artificial intelligence. While emerging and developing economies remain the main drivers of demand growth, consumption in advanced economies is also rebounding after 15 years of stagnation, accounting for around one fifth of the total increase through 2030.
On the supply side, renewable power generation – supported by record levels of solar PV deployment – is now in the process of overtaking coal-fired generation, after the two were virtually level in 2025. Nuclear power output has also reached a new record. Together, renewables and nuclear are projected to generate 50% of global electricity by 2030, up from 42% today.
Natural gas-fired generation is also expected to grow over the period, reflecting rising demand in the United States and the ongoing shift from oil to gas in the Middle East. Coal generation, by contrast, is projected to decline globally, falling back to around 2021 levels by the end of the decade. As a result, global carbon dioxide emissions from electricity generation are expected to remain broadly flat through 2030.
The IEA warns that these trends – combining rapid demand growth with a more weather-dependent generation mix – will require a major expansion of electricity grids and system flexibility. More than 2,500 gigawatts of projects worldwide, including renewables, storage and large electricity users such as data centres, are currently delayed in grid connection queues.
The report estimates that faster grid expansion, alongside grid-enhancing technologies and regulatory reforms that allow more flexible connections and usage, could enable up to 1,600 gigawatts of these projects to be integrated in the near term.
“At a moment of significant uncertainty across energy markets, one certainty is that global electricity demand is growing much more strongly than it did over the past decade,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security. He added that meeting this demand would require annual investment in grids to increase by around 50% by 2030, alongside a stronger focus on system flexibility, security and resilience.
The report also highlights rapid growth in utility-scale battery storage, which is playing an increasingly important role in providing short-term flexibility. Markets including California, Germany, Texas, South Australia and the United Kingdom have all seen strong recent growth in battery capacity.
At the same time, the IEA notes that electricity affordability is becoming a growing concern. Household power prices in many countries have risen faster than incomes since 2019, while elevated prices are also placing pressure on industry. Policymakers are therefore increasingly focused on market design and regulation that deliver not only investment, but also greater efficiency and flexibility across the power system.
Finally, the report stresses the need to strengthen the security and resilience of electricity systems, as risks rise from ageing infrastructure, extreme weather, cyber threats and other emerging vulnerabilities. Modernising system operations and improving the physical protection of critical infrastructure will be essential, the IEA concludes.
