Global Energy in 2026: Shifts, Opportunities, and Innovations

January 21, 2026

The year 2026 is emerging as a pivotal moment in the global energy landscape — one shaped by complex interactions between accelerating clean energy deployment, sustained fossil fuel use, evolving geopolitics, and powerful new demand drivers like artificial intelligence (AI). This transitional period is marked by record-high energy demand, increased electrification, shifting investment patterns, and major institutional recalibrations of energy security, sustainability, and economic growth.

Here are the top 10 game-changing shifts that will redefine global energy in 2026:

Record electricity and overall energy consumption

Global energy demand has been climbing steadily, setting the stage for 2026. In 2024, total energy use rose by about2.2%, reaching nearly 650 exajoules (EJ), reflecting growing electrification and higher living standards. Electricity demand grew even faster,4.3%, thelargest increase outside of post-recession rebounds,driven by rising appliance use, industrial activity, and the expansion of digital infrastructure such as data centers and AI computing facilities.

Emerging markets remain the primary engines of global energy demand growth, with emerging and developing economies accounting for more than 80% of total energy demand growth, and Developing Asia alone responsible for about three‑fifths of this increase, due to rapid industrialization, urbanization, and widespread electrification across sectors including industry, transport, and buildings.

In China, for example, electricity consumption grew by about 7%, reflecting strong uptake of electricity‑intensive manufacturing, rising air conditioner ownership, and expanding digital infrastructure. Overall, China and India are projected to contribute around 60% of global electricity demand growth through 2026.

Advanced economies saw moderate rebounds: the US grew 1.7%, while the EU’s electricity use rose about 1.6%, the first sustained increase since 2017.

These historical trends highlight how structural changes, technological adoption, and economic growth are shaping energy consumption patterns. Looking into 2026, these factors are expected to continue influencing global energy demand, with electrification and digital infrastructure acting as major drivers of electricity consumption across both emerging and developed economies.

Renewables’ unprecedented growth

Renewables continue to be a fast‑growing segment of the global energy system, driven by strong deployment of solar PV and wind and expanding into new regions and sectors. According to the International Energy Agency (IEA), global renewable power capacity is expected to increase by about 4,600 GW between 2025 and 2030, more than doubling the capacity added over the previous five years. Solar PV accounts for nearly 80% of this growth, and wind and hydropower contribute significantly as well.

Renewable generation growth is reshaping the electricity mix, and renewables are projected to become the largest source of global electricity generation by 2026, overtaking coal as the dominant supply source. Though a recent analysis of global electricity generation from January to June 2025 shows that renewables produced about 5,072 terawatt-hours (TWh), surpassing coal’s 4,896 TWh for the first time on record, full-year 2025 data are still being compiled.

Solar PV and wind combined are also forecast to supply a rising share of generation through 2026, with their combined share of global electricity expected to exceed 19% by 2026, up from about 17% in 2025. This growth reflects strong policy support, lower technology costs, and expanding procurement mechanisms such as competitive auctions in major markets including China, India, and Europe.

However, challenges remain that could shape the pace of deployment, including supply chain constraints, permitting delays, and financing barriers in some regions, as noted in recent IEA analysis.

Fossil fuels remain hard to replace

Even as renewables expand rapidly, fossil fuels remain deeply embedded in the global energy system, with overall consumption of coal, oil, and natural gas rising in recent years.

Renewables may have accounted for the largest share of energy supply growth, but fossil fuels still contribute significantly to growth as total energy use increases, reflecting that clean energy additions are largely additive rather than fully displacing traditional sources. In 2024, natural gas demand grew the most, by about 2.7%, with China recording the largest absolute increase of over 7% in gas demand.

Meanwhile, oil demand rose modestly by 0.8%, and coal consumption increased by about 1% as high temperatures drove up power generation needs. Natural gas, including liquefied natural gas (LNG), is expected to see further demand growth through 2026 as supply expands, with the IEA projecting a 7% increase in global LNG supply in 2026, the largest annual rise since 2019, which is anticipated to support stronger demand, particularly in Asia.

Coal’s role in the global energy mix remains complex because many regions continue to build and operate substantial coal capacity even as renewable generation grows. For example, China approved 25 gigawatts (GW) of new coal power projects in the first half of 2025, a modest decline compared with recent annual averages. Newly proposed and revived projects totaled 53 GW in the first half of 2025, the largest first-half volume in more than a decade, showing that developers continue to expand fossil fuel generation even as China works toward its 2030 carbon peak.

(Also read: Power for the People: Making Electricity Fair, Affordable, and Reliable)

The erosion of net-zero ambitions

Some nations have begun to reassess or slow their net-zero commitments as the practical challenges of implementation become more apparent. For example, policy reviews and climate action monitoring indicate that many current net‑zero pledges lack strong legal backing or enforcement mechanisms, making them difficult to implement effectively and raising doubts about their credibility in practice.

Only a small fraction of countries with net‑zero targets have actually legally embedded those targets, with just 27 countries in the EU doing so, covering only about 16% of global emissions, which suggests a gap between ambition and enforceable action.

In some cases, political shifts have led to major parties abandoning net-zero by 2050 targets, as seen in Australia, where key political groups formally dropped support for a mid‑century net‑zero pledge amid debates over economic impacts and competitiveness. These practical concerns are echoed in broader analyses showing that only about one‑third of nationally determined contributions explicitly support transitioning away from fossil fuels, reflecting reluctance or hesitation to fully align policy with a fossil‑free trajectory.

Additionally, the Dutch government officially lowered its 2040 offshore wind capacity target, reducing the planned figure from 50 GW to a range of 30 to 40 GW based on updated assessments of future electricity demand and feasibility, reflecting a shift toward more realistic planning amid broader energy system constraints.

The combination of economic risks, political resistance, and implementation hurdles is prompting some governments to scale back or delay net‑zero pathways, highlighting that ambitious climate targets often face real‑world constraints when translated into actionable policies.

Global energy investment growth

Global energy investment entered 2026 at historically high levels following a record year in 2025, when total spending surpassed $3 trillion, underscoring how energy security, supply resilience, and geopolitical risk have become central investment drivers. Investment momentum is expected to remain strong in 2026 as governments and corporations continue to prioritize reliable energy access alongside decarbonization goals.

Investment in clean technologies, including renewables, nuclear power, electricity grids, energy storage, low-emissions fuels, efficiency, and electrification, reached a record $2.2 trillion in 2025. This surge was driven not only by efforts to cut emissions but also by stronger industrial policy support, heightened energy security concerns, and the increasing cost competitiveness of electricity-based solutions.

Current investment patterns point to the rapid emergence of what analysts describe as a “new Age of Electricity.” Ten years ago, global spending on fossil fuel supply exceeded investment in power generation, grids, and storage by roughly 30%. That relationship has reversed, with investment in electricity-related infrastructure estimated to be about 50% higher than total spending on oil, natural gas, and coal development.

The shift is especially evident in low-emissions power. Global investment in clean electricity generation has nearly doubled over the past five years, driven primarily by solar PV deployment. Spending on solar, including both utility-scale projects and rooftop installations, has reached approximately $450 billion, making it the largest single category in global energy investment.

Capital flowing into battery storage is also accelerating, with investment exceeding $65 billion, reflecting the growing need for flexibility as electricity systems expand and diversify.

At the same time, fossil fuel investment remains substantial. Spending on oil, gas, and coal supply stayed above $1 trillion, due to concerns over supply security, price volatility, and regional demand growth, particularly in Asia and the Middle East.

(Also read: IMF: Path to 50% Renewable Energy Hinges on P11-Trillion Investment)

Nuclear: A resurgent component

Nuclear power is gaining renewed momentum globally as countries seek reliable, low-emission sources of electricity to support energy security and climate objectives. Nuclear generation is set to reach a new record level and continue rising into 2026, propelled by restarts of reactors in Japan, completed maintenance in France, and the commissioning of new units in China, India, Korea, and other markets.

Nuclear power currently contributes around 10% of global electricity supply and remains the world’s second-largest source of low-emissions electricity, behind hydropower, highlighting its enduring role in the clean energy mix.

Major capacity additions are underway, with more than 60 reactors under construction, adding more than 70 GW of capacity, the largest expansion of its kind since 1990. This expansion reflects heightened interest from governments in over 40 countries that include nuclear energy in their energy strategies to enhance supply reliability and reduce dependence on fossil fuels.

Technological innovation is also reshaping the sector. Small modular reactors are gaining attention as a flexible alternative to traditional large plants, potentially offering lower costs and shorter construction times, which could accelerate deployment later this decade.

In addition, recent strategic agreements, such as the 2026 US–Slovakia civil nuclear cooperation pact, signal a geopolitical dimension to nuclear expansion, with nations seeking both energy security and technological leadership.

Rethinking renewable energy’s green claim

As renewable energy deployment accelerates worldwide, analysts are increasinglyexamining the full lifecycle environmental impacts of key technologies such as solar panels and offshore wind turbines. Solar photovoltaic systems, while essential for reducing greenhouse gas emissions, present emerging challenges at the end of their useful life.

With the rapid expansion of solar energy over recent decades, the world isfacing a growing surge of end-of-life PV panels. The International Renewable Energy Agency (IRENA) projects that by2050, global solar panel waste could total as much as78 million metric tons.

Solar panels typically last 25 to 30 years, after which disposal and recycling become complicated because panels contain hazardous materials that can leach into soil and water if not managed properly. Currently, the lack of widespread infrastructure and inconsistent regulatory approaches across regions make it difficult to scale solar panel recycling.

Wind energy is a key component of the global renewable power mix, yet its large composite blades create a growing waste challenge. Constructed mainly from fiberglass and epoxy resin, these blades are built to endure severe weather, making recycling difficult. Today, most decommissioned blades are sent to landfills because of their size, material complexity, and limited recycling options.

In Europe alone, approximately 25,000 tonnes of turbine blades were expected to reach the end of their life each year by 2025, a volume projected to double by 2030 as more early-generation turbines are retired.

AI and digital infrastructure

One of the most significant energy trends heading into 2026 is the sharp increase in electricity demand tied to artificial intelligence and digital infrastructure. Global electricity consumption from data centers is projected to more than double to around 945 TWh by 2030, with AI‑focused workloads driving the largest share of this growth. Electricity consumption by AI‑optimized data centers is expected to increase more than fourfold by 2030.

This surge in power consumption reflects the proliferation of compute‑intensive applications, larger AI models, and expanding data center capacity in major markets, with data centers expected to account for over 20% of total electricity demand growth through 2030.

The US, China, and Europe are set to remain the largest consumers of electricity for data centers in the coming years. China and the US alone are expected to account for nearly 80% of global growth in data center power demand through 2030. Meanwhile, other regions are emerging as growth hotspots. Southeast Asia, for example, is projected to more than double its data center electricity use by 2030, shaped in part by major hubs in Singapore and southern Malaysia, signaling its rising importance in the global digital infrastructure landscape.

Data center electricity demand is projected to grow strongly, but it will account for less than 10% of global electricity growth. Other factors, including industrial output, electrification, electric vehicles, and air conditioning, drive broader demand. Concentrated in key locations, data centers pose unique grid integration challenges.

Grid upgrades

Modern power grids must be expanded and modernized to handle rising demand, integrate large volumes of wind and solar generation, and maintain a stable supply without blackouts. More than 3,000 GW of renewable projects are waiting for grid connections, illustrating how current network capacity is becoming a bottleneck for clean energy deployment.

BloombergNEF (BNEF) estimates that roughly$21 trillion in grid upgrades will be needed globallyby 2050 to stay on a net-zero emissions path. While this represents a significant investment, it is far lower than the projected$38 trillion annual cost of inaction by mid-century, highlighting the economic urgency of modernizing electricity networks.

Major economies are committing billions to grid infrastructure. In China, the State Grid plans to invest 4 trillion yuan (about $574 billion) between 2026 and 2030 to strengthen high‑voltage links and expand distribution networks as the country ramps up renewable capacity.

In Europe, grid operators are boosting investment caps to attract funding and improve reliability after outages highlighted weaknesses, with Spain proposing a 62% increase in grid investment through 2030 to support rising demand from data centers and renewables.

Some countries are already feeling the strain. The Netherlands has reported significant grid congestion, leaving thousands of renewable generators and large users stuck waiting for connections because network capacity has not kept pace with deployment.

These examples show that while grid investment is central to achieving clean energy goals in 2026 and beyond, scaling up infrastructure quickly and coordinating upgrades remain formidable challenges for governments and utilities worldwide.

Geopolitical complexity

Global energy decision-making in 2026 is shaped increasingly by geopolitical forces rather than unified global coordination. Nations are adjusting their energy strategies based on diplomatic alignment, strategic competition, and risks tied to supply chains. Tensions between major powers, including the US and China, are influencing how countries approach energy security and decarbonization, with clean energy partnerships, trade disputes, and strategic industrial policies all playing a role. For example, deeper rivalry in the energy transition has positioned clean technology leadership and resource access as central geopolitical goals.

One of the most acute supply chain risks is the heavy global reliance on manufacturing and processing in a small number of locations for critical clean energy components such as solar panels, batteries, and rare earth elements. China continues to dominate key segments of these supply chains, with a high share of global polysilicon and rare earth processing capacity. This concentration exposes many countries to disruption risk if geopolitical tensions or policy shifts intervene, prompting diversification efforts in the US, Europe, and other regions.

Regional alliances and energy diplomacy are reshaping traditional energy geopolitics. Europe has been increasing imports of US LNG as part of its strategy to reduce dependence on other suppliers and enhance energy security, while Africa and the Middle East pursue partnerships that leverage their resource wealth for strategic leverage in global markets.

Balancing the energy transition with global equity

As 2026 unfolds, the global energy landscape underscores the delicate balance between decarbonization ambitions and practical energy needs. While renewables and low-carbon technologies are expanding rapidly, fossil fuels remain essential to meeting the world’s rising electricity demand, particularly in emerging economies. Overly aggressive decarbonization could drive up electricity prices, disproportionately affecting lower-income populations and slowing industrial development in countries striving to lift millions out of poverty.

For many developing nations, reliable and affordable power is critical for economic growth, education, and healthcare. Prematurely phasing out fossil fuels without adequate alternative capacity risks energy shortages, higher costs, and social strain. Poorer countries should be allowed to balance environmental responsibility with energy security.

Ultimately, 2026 highlights a core lesson for policymakers and investors: achieving sustainability requires pragmatic, inclusive strategies that integrate renewables, maintain essential fossil fuel infrastructure, and ensure affordable power for all, particularly for the world’s most vulnerable populations.

Sources:

https://www.iea.org/reports/global-energy-review-2025/global-trends

https://www.iea.org/reports/electricity-mid-year-update-2025/executive-summary

https://www.iea.org/reports/renewables-2025/executive-summary

https://www.reuters.com/sustainability/climate-energy/global-renewable-power-output-overtakes-coal-first-time-report-says-2025-10-07

https://www.iea.org/reports/electricity-mid-year-update-2025/supply-renewables-grow-the-most-followed-by-gas-and-nuclear

https://www.iea.org/reports/global-energy-review-2025/global-trends