IEA Sees Global Electricity Demand Up 3.6 Percent in 2026 as Renewables Overtake Coal
Global electricity demand is set to grow about 3.6 percent in 2026 and about 3.8 percent in 2027, accelerating from around 3 percent in 2025, the International Energy Agency said in its Electricity Mid Year Update published on 23 July 2026. On the agency’s figures, world electricity consumption rises to about 30,700 terawatt hours in 2027, from 28,600 in 2025, an increase of about 2,100 terawatt hours, or roughly 7.3 percent over two years on our calculation, as power systems adjust to a series of recent shocks.
The agency attributed the faster growth to industrial expansion, rising ownership of appliances, the accelerating uptake of electric vehicles, air conditioning and heat pumps, and the continued expansion of data centre capacity tied to artificial intelligence. It said renewables would become the world’s largest source of electricity in 2026, overtaking coal, with their share of generation rising from about 33 percent in 2025 to about 37 percent in 2027, a gain of roughly four percentage points on our calculation. Solar power output is set to increase by around 600 terawatt hours in 2026, overtaking wind, while nuclear generation grows more than 4 percent in 2027.
The update also flagged pressures on the fuel supply side. It noted that disruptions to liquefied natural gas flows through the Strait of Hormuz affected close to a fifth of global supply, helping push natural gas prices to their highest levels since the energy crisis of 2022 and 2023 and prompting some switching from gas to coal in parts of Asia and Europe. Among large markets, the agency put demand growth at about 5.5 percent in China and about 7 percent in India in 2026, against close to 2 percent in both the United States and the European Union.
Why it matters: Electricity demand and the fuel mix behind it are central to the energy economics that shape the Gulf, both as a major exporter of oil and gas and as a region building large amounts of new power and data centre capacity. The agency’s finding that renewables are overtaking coal globally, even as gas prices rise on supply disruption, points to a market in transition, and the strain on liquefied natural gas supply is directly relevant to Gulf producers and to the price of the gas the region both consumes and exports.
Outlook: The balance of the next two years will depend on how quickly renewable capacity is added, the path of natural gas prices, and the pace of electrification and data centre growth. The agency’s projections imply that clean generation will meet a growing share of demand, but that periods of tight gas supply can still lift costs and push some systems back toward coal, leaving the transition uneven across regions.
Sources: International Energy Agency, Electricity Mid Year Update 2026.
