Global power demand growth in 2025 was met entirely by low-carbon energy for the first time, marking a historic turning point as fossil fuel generation shifted from a supplementary role to being displaced, according to a recent study.

The 2026 Statistical Review of World Energy, compiled by the Energy Institute in collaboration with Ember, Kearney and KPMG, showed global power generation rose 3% in 2025 to 32.2 TWh.

Notably, the increase in renewable power generation (861 TWh) exceeded the absolute rise in global power demand (855 TWh) for the first time in 2025, directly leading to a net decline in fossil fuel generation. Globally, as total fossil fuel generation fell, renewables and hydropower surpassed coal as the largest incremental source of power supply.

Clean energy growth accelerates

Renewables became the largest source of growth in global energy supply in a non-recession year for the first time in 2025, with solar contributing 71% of the increase, the report said. In the power sector specifically, solar generation rose 30%, with record new installed capacity of 511 GW, and its share of the global power mix (8.7%) exceeded that of wind (8.4%) for the first time, nearly matching nuclear.

Meanwhile, global battery storage capacity rose 66% to 302 GW, further cementing its position as the fastest-growing clean energy technology. The explosive growth of clean power directly squeezed the space for coal-fired generation.

Regional divergence in fossil fuel consumption

Despite the renewable breakthrough, global total energy demand still rose 1.7% in 2025, with fossil fuels accounting for 86% of total energy supply. Coal consumption rose 0.7% year on year, with China's coal consumption flat and India's growth slowing to 0.6%. In contrast, U.S. coal consumption rose 10% year on year due to a sharp increase in natural gas prices.

The report attributed this mainly to slowing coking coal demand and the stunning 40% annual growth in solar generation. Meanwhile, China's energy structure is undergoing profound change, with gasoline and diesel demand declining for two consecutive years thanks to the adoption of electric vehicles, even as its oil consumption continues to grow.

India, the world's second-largest coal consumer, saw its coal consumption rise just 0.6% in 2025, well below the 3.6% average growth rate of the past decade, as mild weather reduced power demand while wind and solar generation set new records.

In stark contrast to Asia, U.S. coal consumption rebounded strongly by 10% in 2025. The report made clear this was not a policy shift but a market-driven reversal for coal power. U.S. natural gas prices surged over 50% in 2025, sharply reducing the economics of gas-fired generation, forcing power companies to turn to more competitive coal.

This shift was directly reflected in generation data, with U.S. coal-fired power output rising 93.2 TWh in 2025 while natural gas generation fell 61.8 TWh. This highlights that economic competition among fossil fuels remains a key variable affecting carbon emissions during the energy transition, and underscores the potential obstacles that energy system resilience and price volatility pose to emission reduction efforts.

Carbon emissions rise in tandem

Global energy-related carbon dioxide emissions rose 1.1% in 2025 to 35.81 billion tonnes, the report said. The United States became the single largest contributor to global emissions growth, accounting for more than one-third of the total increase. North America was also the only region where carbon intensity rose in 2025, directly linked to its significant rebound in coal-fired generation.

"This year's report shows the energy system at a tipping point: record demand, historic breakthroughs in low-carbon electricity, and increasingly divergent regional pathways," said Dr Nick Wayth, CEO of the Energy Institute.

He said encouraging trends of fossil fuel displacement are visible in the power sector, but global emissions are still rising and energy security pressures continue to intensify.