IEA Forecasts Renewables to Overtake Coal by 2026

The International Energy Agency forecasts that renewables will overtake coal as the world's largest source of electricity generation in 2026. Global electricity demand is expected to accelerate, growing by 3.6 percent in 2026 and 3.8 percent in 2027, driven by industrial expansion, data centers, electric vehicles, and increased cooling needs during heatwaves.

Despite the rise of renewables, global coal-fired generation is projected to increase by 1.4 percent in 2026. This trend stems from a conflict between the United States and Iran that has caused regular blockages of the Strait of Hormuz since March 2026. These disruptions have affected 20 percent of global liquefied natural gas transits, pushing energy prices 30 percent higher than the first half of 2025.

Regional impacts vary, with India projecting a 7 percent demand increase and China 5.5 percent. In India, the Ministry of Power mandated that imported coal-fired plants operate at full capacity between April and June 2026 to prevent shortages following record peak loads in May. Consequently, global carbon dioxide emissions from electricity generation are projected to rise by 1 percent in 2026, with a 6 percent increase in Southeast Asia offset by a 5 percent decline in the European Union.