Renewables Now Larger Than Coal

Source: AP Photo/John Locher

For the first time, renewables have overtaken coal as the world’s largest source of electricity, marking a pivotal shift in the global energy transition. Despite surging demand, clean energy is scaling fast enough to meet new needs and curb emissions. With global clean-energy investment projected to reach $2 trillion in 2025, the shift reflects not ideology but market momentum transforming the world’s energy and financial systems.

Why This Matters

• Investors: Renewables are outperforming and creating long-term opportunities in clean infrastructure, storage, and electrification.

• Businesses: Transitioning to low-carbon energy reduces costs, secures supply, and aligns with tightening sustainability and disclosure standards.

• Policymakers: Coordinated public investment can accelerate deployment, strengthen grid resilience, and sustain competitiveness in the clean-tech economy.

  
  

What is Happening

For the first time on record, renewable power has outpaced coal as the world’s largest source of electricity. In the first half of 2025, solar and wind together generated 34.3% of global electricity, compared with coal’s 33.1%, according to new analysis by the energy think tank Ember.

Solar output grew by a record 31%, while wind grew 7.7%, together adding more than 400 terawatt hours of clean electricity, more than the total increase in global demand over the same period, and enough to power 37.7 million U.S. households for an entire year.

What This Means

This marks a decisive moment in the global energy transition. Even as electricity demand continues to grow—driven by electric vehicles, data centers, and population growth in developing regions—renewables are scaling fast enough to meet new needs and displace fossil generation. With total fossil fuel output beginning to decline, the trend suggests that global power-sector emissions may finally begin to plateau.

Why Happening Now

Four major economies—China, India, the European Union, and the United States—account for nearly two-thirds of global electricity demand and power sector CO2 emissions.

Among them, China’s transformation stands out. In the first half of 2025, it added more solar and wind capacity than the rest of the world combined. As a result, fossil generation fell by 2% and emissions dropped 1.7%, equivalent to the emission of ten million cars in the U.S.

India is following a similar path, rapidly deploying renewables while reducing coal dependence.

In the United States, 96% of new capacity added in 2024 was carbon-free, yet demand has outpaced renewable growth this year. In Europe, weak wind and hydropower generation contributed to a temporary rise in coal and gas use, highlighting needs for greater resilience within clean-power systems.

China Leading

China’s clean-energy expansion has surpassed even its own government’s expectations. Nearly half of all new cars sold in China are electric, and its 30,000 miles of high-speed rail lines run entirely on electricity.

Yet the country still consumes more coal than the entire rest of the world combined and emits more greenhouse gases than the United States and the European Union together. This makes China’s transition both a global challenge and a crucial source of hope.

What Comes Next

Despite political and policy backlash in some regions, momentum continues to build worldwide. Governments from California and New York to capitals across the E.U. are advancing 100% clean-power mandates.

In the private sector, companies signed more than 90 gigawatts of clean power purchase agreements in 2024, the highest ever recorded. And according to the International Energy Agency, global clean-energy investment is projected to reach $2 trillion in 2025, twice the amount flowing into fossil fuels.

Policy, technology, and capital are now converging to mark a structural turning point in global markets. For investors, it is not ideology, it is market momentum that is reshaping the world’s industrial and financial systems in real time.