IEA: Nuclear, Renewable Generation Continue to Displace Coal to 2030

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Written by John Egan for IIR News Intelligence (Sugar Land, Texas)

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Summary

Global demand for electricity is expected to grow strongly to 2030, underscoring the need for additional investments in grids and flexibility, such as batteries, according to a report released last Friday by the International Energy Agency (IEA).

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Demand Rising Fastest in Emerging Economies

The world's emerging economies are projected to continue powering global electric demand growth through the end of this decade, the International Energy Agency (IEA) said in its Electricity 2026: Analysis and Forecast to 2030, released Friday.

Global electricity demand increased year-over-year by 3% in 2025, following 4.4% year-over-year boost in 2024. The IEA report projected that global electric demand will grow by over 3.5% per year, on average, through the end of the current decade, eclipsing overall worldwide energy demand growth by at least 2.5 times.

Rising demand is being propelled by increasing industrial use of electricity, the continued uptake of electric vehicles, more air conditioning and the expansion of data centers and artificial intelligence (AI), the 225-page report said.

Emerging economies are expected to account for about 80% of worldwide electric demand growth through 2030, the agency estimated. China's torrid growth in electricity use over the 2015-2025 period, when it rose by about 6.5% per year, will moderate over the next five years, when it is expected to grow at an annual rate of about 4.5%, the IEA forecast.

"While emerging and developing economies remain the main engines of electricity demand growth," the agency noted, "consumption from advanced economies is also rising after 15 years of stagnation." Power demand growth in advanced economies is expected to account for about one-fifth of the global increase in power demand through 2030.

Click on the image at right to see a graphic on regional electricity demand growth since 2015, with projections through 2030.

"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 IEA Director of Energy Markets and Security Keisuke Sadamori. "Meeting this demand (growth) will require annual investment in grids to rise by 50% by 2030. Expanding flexibility will also be crucial as power networks continue to evolve--so will a strong focus on security and resilience."

U.S. Demand Growth Propelled by Data Centers

In the U.S., electricity demand rose 2.1% in 2025 and 2.8% in 2024, the report said. It forecasts domestic electric demand growth will slow to a compound annual growth rate (CAGR) of about 1.9% over the 2026-2030 period. But the composition of that demand growth is notable: whereas prior periods were marked by growth driven by electricity going to industrial uses, cooling, transportation and heat pumps, fully 50% of U.S. electric demand growth will come from data centers and AI for 2026-2030.

Aside from data centers, the "Buildings" sector will continue to increase its use of electricity from greater deployment of space cooling and heat pumps.

Click on the image at right to see U.S. electric demand growth, by sector, since 2015 and projected future growth to 2030.

Global Shift to Low- and No-Emissions Power Continues

The report predicted that about 50% of the world's electricity in 2030 will be generated by nuclear and renewables, up from approximately 43% in 2025. Natural gas use also will rise, though at a more moderate pace, while coal use is forecast to continue its long, slow decline for the rest of this decade.

The IEA report said "strong growth in renewables and a steady rise in both nuclear and gas output in many regions will displace global coal-fired generation in (the) forecast. Coal use in the power sector is expected to shift to a declining trajectory, with its share of the electricity mix falling to 27% by 2030, from 34% in 2025."

Click on the image at right to see recent history and IEA's forecast for the world's electricity fuel mix to 2030.

Once again, there are wide variances across regions for the future electricity fuel mix. China's buildout of wind and solar generation is expected to sharply accelerate over the 2026-2030 period, far outstripping its use of other fuels to generate electricity, the IEA said. In the U.S., an increasing portion of electricity will be generated by natural gas and renewables through the rest of the decade while coal use falls.

Electric fuel mix projections are critically dependent on several variables, including weather, fuel prices and local political and regulatory choices. In the U.S., for example, coal use increased in 2025 compared to earlier years, partly as a result of President Donald Trump's affinity for fossil fuels and his hostility to renewable energy, both of which have been channeled into federal policy choices. For more on that, see January 27, 2026, article - Coal Use by U.S. Power Plants: Winning a Battle but Still Losing the War?

The Electricity 2026 report predicted that the ongoing fight for market share among fuels used in electric generation will hold worldwide annual emissions of carbon dioxide (CO₂) from the power sector roughly flat between now and 2030.

Batteries Critical, But Stuck in Queues

An evolving worldwide electricity industry will have growing need for more transmission lines, to move power, and batteries, to store power, the Paris-based energy agency said. Transmission lines and batteries provide electric companies added flexibility in matching demand and supply, the IEA added. But the world is under-investing in transmission lines, and many battery storage projects--mainly in the U.S.--remain stuck in interconnection queues.

The report said, "A lack of grid capacity is emerging as a critical bottleneck in many regions, driving higher levels of congestion and slowing the deployment of new electricity generation, storage and demand." The report looked at a range of measures that regulators and system operators are adopting to "move fast and connect things," such as enabling more capacity to be integrated more quickly through regulatory reforms and deployment of technologies that can deliver rapid grid upgrades."

The report said that "over 2,500 gigawatts (GW) of battery projects--encompassing renewables, storage, and projects with large loads, such as data centers--currently are stalled in connection queues worldwide." Nearly 80 GW of that stuck battery capacity is in the U.S.

Key Takeaways

• Global electric demand is projected to grow at an average annual rate of approximately 3.5% for the 2026-2030 period, faster than the growth rate in 2025 but slower than in 2024, according to a new report from the International Energy Agency.
• The IEA report projected sharp gains in nuclear and renewable generation and a continued gradual decline in the use of coal to generate electricity for the remainder of this decade.
• Use of natural gas to generate electricity is expected to continue growing for the next five years.
• As much as 50% of U.S. electric demand growth over the next five years will come from data centers and AI, the agency said.
• The IEA said more investment is needed in transmission.
• Further steps are needed to get battery energy storage projects out of interconnection queues and into the market, it said in its Electricity 2026 report.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).