Renewable Energy Becomes Largest Contributor to Global Energy Growth
Renewable energy has become the largest contributor to global energy supply growth for the first time outside of the 2025 economic recession period. Nevertheless, the increase in clean energy usage has not yet been sufficient to curb the rise in global carbon emissions, which have once again reached record levels.
The Statistical Review of World Energy 2026 report, released by the Energy Institute, shows that the total global energy supply increased by 1.7 per cent throughout 2025. All major energy sources recorded their highest consumption for the second consecutive year, driven by rising electricity demand and global economic growth.
The report, prepared in collaboration with Ember, Kearney, and KPMG, notes that solar power was the primary driver of low-carbon energy growth, contributing approximately 72 per cent of new capacity additions. Globally, solar power generation increased by 30 per cent in 2025, while battery-based energy storage capacity surged by 66 per cent, strengthening the role of both technologies in the energy transition.
Global electricity demand also grew by 3 per cent, outpacing the growth of the total energy supply. This increase was driven by the rising use of electric vehicles, the expansion of data centres, and the electricity requirements for artificial intelligence (AI) technologies.
For the first time, renewable energy combined with hydropower has surpassed coal as the world’s largest source of electricity generation. Concurrently, fossil fuel-based power generation has begun to decline.
Despite these advancements, global carbon emissions still increased by 1.1 per cent throughout 2025. The report highlights differing trends between nations; carbon emissions in the United States rose by 3.2 per cent, primarily triggered by a 13 per cent increase in coal-fired power generation. In contrast, emission growth in China reached only 0.3 per cent, while India recorded 0.9 per cent.
The Energy Institute also assessed that global energy efficiency improvements are still falling short of targets. Energy intensity relative to GDP growth improved by approximately 2 per cent, which remains below the 4 per cent annual efficiency improvement target agreed upon at COP28.
Disparities in energy transition pathways are becoming increasingly evident across various regions. China maintains its position as a leader in solar and wind power development, with capacity exceeding the combined total of all other nations, while coal usage continues to decline. India also recorded a simultaneous decrease in coal, oil, and gas-based power generation, while renewable energy generation increased by nearly 24 per cent. In Europe, renewable energy generation grew by approximately 7 per cent, while the United Kingdom recorded a 37 per cent growth in solar power generation.
Energy Institute President Andy Brown stated that the continuous increase in energy demand means that issues of energy security, affordability, and sustainability are becoming increasingly decisive for global policy direction. Meanwhile, Energy Institute Chief Executive Nick Wayth assessed that the global energy system is at a turning point.
“We are seeing an exciting replacement of fossil fuels within the electricity sector, but global emissions continue to rise and pressure on energy security is increasing. These findings underscore the importance of accelerating efficiency, electrification, and investment in clean technologies worldwide,” Wayth said in a statement on Wednesday.
Ember’s Interim Managing Director, Aditya Lolla, noted that the growth of renewable energy and electrification is now increasingly driven by economic, efficiency, and energy security considerations.
On the other hand, KPMG noted a shift in global oil production centres. The Americas now produce approximately 20 per cent more oil than the Middle East, altering global energy trade flows and prompting companies to adjust their business strategies to regional dynamics.
Kearney added that the growth of renewable energy must be accompanied by the development of power grids, energy storage systems, and supporting infrastructure to ensure the energy transition can proceed more rapidly and sustainably.