Global Energy Shift: Renewables Overtake Fossil Fuels in 2025 as Electricity Dominates Supply

The war launched by the United States and Israel on Iran has caused an unprecedented disruption in global energy markets, bottlenecking 20 percent of the world’s supply of oil and liquefied natural gas. While the full impact on climate change efforts remains uncertain, two new reports released this week provide the clearest picture yet of the path the world was on before the conflict sent oil prices soaring.

The reports, from the International Energy Agency (IEA) and the think tank Ember, confirm that the world is entering an “age of electricity.” Core economic activities—such as driving cars, heating buildings, and running industrial processes like steelmaking—are increasingly powered by electricity instead of fossil fuels. Crucially, a growing share of this electricity now comes from renewable sources.

2025: A Banner Year for Renewable Energy

The analyses confirmed that 2025 was a landmark year for renewable energy. Solar power emerged as the single biggest source of new electricity generation, while the broader suite of carbon-free sources—including wind, nuclear, and hydropower—exceeded the overall rise in electricity demand. This means renewables began displacing fossil fuels in power generation.

“This was a year when the economy boomed, electricity demand grew very healthily—and still all that demand growth was met with renewables.”

For the first time in over a century, renewables edged out coal in global electricity generation in 2025. This progress was driven by China and India, the world’s two most populous countries, which together account for 42 percent of global fossil power generation. Both nations saw electricity generated by fossil fuels decline for the first time this century.

China and India Lead the Charge

Like other countries, China and India have rapidly expanded their solar, wind, and battery infrastructure. The cost of batteries fell by 45 percent in 2025, a steeper decline than the 20 percent drop tracked in 2024.

Another key sign that 2025 marked a turning point: Unlike in past years, the plateau in fossil fuel use was not tied to a recession. Global economic growth remained normal, indicating that renewable energy is driving a structural shift away from fossil fuels in electricity generation.

Fossil Fuels Still Play a Role—But the Trend Is Clear

Despite this progress, oil, gas, and coal use are not nearing extinction. However, the data suggests that the energy transition is no longer theoretical—it is actively reshaping the global energy landscape.