Renewable energy is set to overtake the world's use of coal by early 2025 and will account for more than one-third of the world's total electricity generation, according to a report released by International Energy Agency (IEA) on January 24.

The IEA's "Electricity 2024" report forecasts that nuclear power generation is forecast to reach record highs by 2025, rebounding from recent declines.

By 2026, the report projects, renewables and nuclear will account for almost half of the world's power generation, against below 40% in 2023.

IEA Executive Director Fatih Birol said in a statement that it's "encouraging that the rapid growth of renewables and a steady expansion of nuclear power are together on course to match all the increase in global electricity demand over the next three years."

"This is largely thanks to the huge momentum behind renewables, with ever cheaper solar leading the way, and support from the important comeback of nuclear power, whose generation is set to reach a historic high by 2025," Birol said. "While more progress is needed, and fast, these are very promising trends."

The changing electricity mix will drive down emissions from the power sector—currently the world's largest source of carbon dioxide emissions—even as demand rises, IEA said.

In 2023, global electricity demand grew by 2.2%, lower than 2.4% in 2022, but the demand is forecast to accelerate, with a 3.4% yearly average between 2024 and 2026.

The increase is mainly caused by several factors such as the electrification of homes and businesses, the increasing electric vehicles  and industrial growth.

Data centers are also driving significant growth around the world. The IEA projects that electricity use from data centers globally could double between 2022 and 2026, reaching a demand roughly equivalent to Japan's.

(Writing by Rebecca Liu  Editing by Harry Huo)
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