Renewable Energy Overtakes Coal

Renewable Energy VS Coal

Five weeks ago, the International Energy Agency (IEA) projected that renewables would overtake coal as the largest source of global electricity generation by the end of 2025 at the earliest, and by mid-2026 at the latest. The good news? It happened much sooner than the IEA anticipated. As shown in Figure 1, renewables have already surpassed coal as the leading source of electricity generation worldwide in the first half of 2025.

Figure 1 - Global generation, Jan-Jun of each year (TWh). Source: DailyMail, Ember

Since the Industrial Revolution, global electricity demand has risen steadily alongside economic growth and industrialisation. However, the same reliance on coal that once fuelled development has also made the power sector one of the largest sources of greenhouse gas emissions. Today, as countries attempt to move away from fossil fuel-based economies toward decarbonisation, many are prioritising the electrification of key sectors such as transport, heating, and industry. As illustrated in Figure 2, this transition shows the challenge of decoupling growing electricity demand from fossil fuel dependence, as coal, oil, and gas still dominate the global electricity mix.

Figure 2 - Electricity production by source, World. Source: Our World In Data.

This achievement has rightly made global headlines, marking a milestone driven by the rapid expansion of solar and wind energy. As electricity demand continues to rise, renewable generation must accelerate to keep pace. So far in 2025, global demand has increased by 369 TWh, with wind and solar together meeting 109% of this additional demand. As a result, coal generation has fallen by 27 TWh (-0.6%). Overall, renewables now account for around 40% of global electricity generation.

It is important to note, however, that electricity demand represents only a portion of total energy demand, as it excludes consumption from sectors such as transport, heating, and industry. These sectors still rely heavily on fossil fuels like oil and natural gas. At first glance, this might make the achievement seem less significant. Nevertheless, the sustained growth of renewables (as shown in Figures 1 and 2) marks a crucial step toward reducing dependence on coal, and in time, the remaining fossil fuels. When combined with electrification and broader decarbonisation strategies, this progress remains an important milestone to celebrate.

Drivers behind the shift to renewables

Wind and solar are the two largest renewable energy sources and together they have driven the surge that enabled renewables to surpass coal as the leading source of electricity. In particular, solar energy has acted as the main engine of this growth, expanding by an impressive 200% over the past three years, including a 31% increase in the first half of 2025 alone. This has raised its share in the global electricity mix from 6.9% to 8.8%. Wind power, by contrast, grew more modestly by 7.7%, bringing its global share to 9.2%.

Figure 3 - Global Coal Production. Source: Our World In Data.

Much of this growth in renewable energy generation has been concentrated in a few key countries, notably China and India. China, the world’s largest electricity consumer, expanded solar generation by 43% and wind generation by 16%, while India increased its wind and solar generation by 29% and 31% respectively. Ironically, these same countries have also become the biggest coal producers to meet the energy demands of their rising populations.

In Europe, however, weaker wind conditions and rising electricity demand meant that renewable growth did not fully keep pace, leading to a greater reliance on natural gas. Nevertheless, as shown in Figure 4, renewables still generated 54% of the EU’s electricity, an increase of 1.3% compared to the previous year.

Figure 4 - Share of renewables in net electricity generation, Q2 2024 and Q2 2021. Source: Eurostat.

What does this mean for the future?

Considering this milestone and looking ahead, countries will need to accelerate the expansion of renewable energy generation to meet both current and future electricity demand while reducing reliance on fossil fuels. The growing push for electrification across sectors as part of broader decarbonisation strategies will only increase electricity needs. This highlights the importance of scaling up renewable sources more rapidly and aggressively. Without stronger commitment and investment, the transition to a low-carbon energy system risks falling short of global climate goals.