IEA calls peak coal, even as “Age of Electricity” takes hold to boost global power demand

The Paris headquartered International Energy Agency (IEA) has indicated that the world has already passed “peak coal”, even with an expected huge boost in global power demand caused by the “age of electricity”.

A new IEA report published on Friday, Electricity 2026, says electricity demand will increase by an average of 3.6 per cent each year over the remainder of the decade, driven by rising consumption from industry, electric vehicles, air conditioning, and data centres.

This continues the recent trend that saw electricity demand grow 3 per cent year-on-year in 2025 and 4.4 per cent in 2024, which the IEA blamed on “intense heat waves and strong industrial activity”.

“At a moment of significant uncertainty across energy markets, one certainty is that global electricity demand is growing much more strongly than it did over the past decade,” said Keisuke Sadamori, IEA director of energy markets and security.

“In this Age of Electricity, the increase in global power consumption through 2030 is set to be equivalent to adding more than two European Unions.”

Emerging economies remain the main driver of electricity demand growth, accounting for nearly 80 per cent of additional electricity consumption through 2030. However, advanced economies will also play their part, with electricity demand growth accelerating again after what the IEA described as 15 years of stagnation.

As the so-called ‘Age of Electricity’ takes hold, the IEA expects half of the world’s electricity to come from renewables and nuclear by 2030, with total generation from renewables overtaking coal.

The most remarkable aspect of the report is this graph above, which clearly shows coal (in brown) increasing in recent years – thanks to massive investment in China and India – but heading downwards for the rest of the decade.

It indicates that the peak was reached in 2024, and the bulk of new generation comes from solar, followed by wind, and then gas. Nuclear accounts for a small fraction of new generation.

The IEA says renewable generation increased by 9 per cent in 2025, down slightly on the 9.6 per cent increase seen in 2024, but still well above the 6.4 per cent average seen over the past decade.

This trend will continue through the next five years, with the IEA predicting renewable output to grow by around 1,000 terawatt-hours (TWh) annually through 2030, led by solar PV, which is expected to account for 600 TWh on its own.

After a 1.4 per cent increase in 2024, the IEA saw coal generation remain relatively flat in 2025, with declines in both China and India offset by gains in the United States, Eurasia, and other Asian markets.

The IEA expects coal-fired output to continue contracting by 0.9 per cent on average annually through the remainder of the decade, though it will still remain the largest single source of electricity through 2030.

Driving the decline of coal’s relevancy is the plateauing in China, which is responsible for over half of the world’s coal-fired generation, helped by a similar decline in use in India – both of which were driven in part by increases in renewable energy generation.

The gravitational weight of China and India on global coal generation is highlighted by the fact that global levels remained relatively flat, even as coal-fired generation rose in the United States thanks to a range of factors, including federal policy support halting coal plant retirements.

Coal’s position in China’s energy mix is expected to continue declining through 2030 due to continued increases in renewable and nuclear power generation. Similarly, the IEA forecasts coal will decline in both the European Union and the United States through to 2030.

The IEA expects the decline of coal in India, however, to be temporary, with coal-fired output projected to resume rising over the next five years.  

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