IEA Electricity Mid-Year Update 2026: Key Milestones and Trends for the Global Power Sector

While hydropower remains the largest renewable source globally, solar is now the second-largest renewable electricity source and is closing fast . The IEA projects that solar PV alone will account for more than 60% of total renewable generation increases through 2030 . In a related regional milestone, solar became Europe's largest electricity source in June 2026, generating a record 52 TWh and supplying 25% of EU power, ahead of nuclear (21%), gas (15%), wind (14%), and coal (8%) . Globally, solar was the single biggest contributor to energy supply growth in 2025, accounting for more than 25% of the total increase — the first time a modern renewable has led global primary energy growth .

Rising Electricity Demand Led by China and India

Global electricity demand is accelerating significantly. The IEA forecasts growth of 3.6% in 2026 and 3.8% in 2027, up from 3% in 2025 . The main drivers are industrial expansion, increased use of air conditioning and heat pumps, electric vehicles, and data centres .

• China: Demand growth is expected to rise to 5.5% in 2026 from 5.2% in 2025, driven by rising EV adoption and stronger manufacturing activity .
• India: The IEA expects India's electricity demand to grow 6.4% annually through 2030, making it the world's fastest-growing major electricity market, fuelled by manufacturing and data centres .

Carbon Emissions: A 1% Rise in 2026, Then a Projected Plateau

Contrary to an earlier expectation of an immediate plateau, the IEA now projects CO₂ emissions from power generation will rise approximately 1% in 2026 due to increased coal burn, and then flatten out in 2027 as renewables continue scaling . The near-term uptick is directly linked to the Iran war driving up fossil fuel costs and boosting coal-fired generation . Regional disparities are stark: Southeast Asia is expected to see its emissions grow by 6%, while the European Union should record a 5% decline .

Coal: Temporary Rise, Structural Decline

• Coal-fired generation is rising 1.4% in 2026 (after remaining roughly flat in 2025), driven by war-related gas price spikes . Gas-dependent developing nations have been hit hard by rising LNG prices, forcing them to switch to coal .
• Despite this near-term blip, coal's share of the global generation mix is declining structurally and is projected to fall to its lowest level in a century — around 32% — as renewables, nuclear, and gas continue to erode coal's position .

Key caveat: The IEA's earlier forecast for a clean plateau in coal generation and power-sector emissions has been complicated by the 2026 Iran conflict . The structural trend remains toward coal's long-term decline and decarbonization, but the precise timing of the emissions peak has shifted.