Diverse and resilient energy production is needed to meet future demand,
global report says
[November 12, 2025] By
ALEXA ST. JOHN
Electricity demand will rise much faster than overall energy growth in
the coming decades, underscoring the need for diversified energy
sources, according to an analysis released Wednesday.
The report by the International Energy Agency said renewable energy, led
by solar power, will grow faster than any other major source in the next
few years and that coal and oil demand will likely peak globally by the
end of this decade. The report noted that many natural gas projects were
approved in 2025, due to changes in U.S. policy, indicating worldwide
supply will rise even as questions remain about how it will be used.
Meanwhile, global nuclear power capacity is set to increase by at least
a third by 2035 after being stagnant for years.
The release of the annual World Energy Outlook coincided with U.N.
climate negotiations in Brazil this week where global leaders are
calling for ways to curb the planet's warming.
Regional dynamics
The IEA says building greater resilience in energy systems is especially
important as data centers, heating and cooling, electrification and more
drive energy demand. Investment in data centers is expected to reach
$580 billion this year, exceeding investment in the oil supply,
according to the report.
Growing economies including India and nations in Southeast Asia, the
Middle East, Africa and Latin America, will “increasingly shape energy
market dynamics in the years,” the IEA said, noting their potential for
solar power.
China, meanwhile, has accounted for half the global growth in demand for
oil and gas, and more than half for electricity, since 2010.
“In a break from the trend of the past decade, the increase in
electricity consumption is no longer limited to emerging and developing
economies,” IEA Executive Director Fatih Birol said in a release. Birol
said that electricity use is also rising in advanced economies.
Nations are grappling with meeting demand while preparing for the risks
brought on by the planet’s warming. The IEA says the world is falling
short on universal energy access and climate change goals. Around 730
million people still live without electricity, according to the IEA, and
despite progress, nearly one-quarter of the global population still
relies on inefficient cooking methods that hurt their health or the
environment. 2024 was also the hottest year on record.
Nations should diversify their energy sources and cooperate to expand
supply chains for critical minerals used to make things like batteries
for electric vehicles and components for solar and wind power
generation, the IEA said. This also includes making quick improvements
to the grid, energy storage and broader infrastructure.
“When we look at the history of the energy world in recent decades,
there is no other time when energy security tensions have applied to so
many fuels and technologies at once,” Birol said. “With energy security
front and (center) for many governments, their responses need to
consider the synergies and trade-offs that can arise with other policy
goals – on affordability, access, competitiveness and climate change.”
In a conference call Wednesday, Birol said: “We will still use oil, we
will still use gas. But the growth of electricity demand is
spectacular.”
He noted the role transportation plays in accounting for 45% of global
oil consumption, for example. “How the electrification of the
transportation takes place, especially in countries beyond China and
Europe, will determine the shape of the oil demand and growth.”
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Workers install panels at a solar project May 21, 2025, in Galena,
Alaska. (AP Photo/John Locher, File)
 Global reaction
Wednesday's edition of the yearly report is the first released since
the start of U.S. President Donald Trump’s second term. Trump's
administration has for a second time opted out of the Paris
agreement, rolled back dozens of climate regulations, slashed
federal support for renewable energies such as wind and solar power
and is reversing the “endangerment finding” that sits at the core of
U.S. climate policy.
Trump has pledged his support instead to the fossil fuel industry,
investing in coal and loosening restrictions on pollution.
But energy analysts said the shift to clean power is happening
regardless of climate policy around the world.
“The evidence on the ground is overwhelming. EV sales are taking off
in many emerging countries, solar is permeating even through the
Middle East,” said Dave Jones, chief analyst at global energy think
tank Ember. "Renewables and electrification will dominate the
future.”
Maria Pastukhova, energy transition program lead at climate change
think tank E3G, said the report makes “the choices for the global
energy system and the global economy unambiguous.”
“If countries want to grow their economies and protect their
citizens from roller-coaster energy prices, they need to focus
relentlessly on energy efficiency and the (decarbonization) of
energy demand,” Pastukhova said.
Others, however, were critical of how the outlook addressed oil and
gas. Ben Backwell, CEO of the Global Wind Energy Council, said the
outlook does not fully capture the momentum in renewables, and that
it should have emphasized the trajectory for renewable energy is
accelerating, driven by the decreasing cost of the technologies,
strong policy support and the move toward electrification.
“We’re accelerating,” he added. “You can see it all around the world
and we can see it in our numbers for last year, but also in our
numbers for the first half of this year. It looks very, very
exciting, both for wind and for solar, in fact, and for next year,
even more so.”
The outlook foresees the likelihood of surpassing the warming
threshold of 1.5 degrees Celsius (2.7 degrees Fahrenheit)
established in the Paris Agreement. Nonetheless, Stephan Singer,
global energy senior advisor at CAN International, a global network
of environmental organizations, said getting below that point is
still possible.
The IEA addressed some of the criticism in the call Wednesday. It
said that it sees differences economically, politically and with
regard to clean energy efforts across the globe, and that its
analysis tries to account for those differences.
“In a nutshell, the IEA is backsliding. As a global think tank, the
IEA has largely failed to represent where most countries in the (Organisation
for Economic Co-operation and Development) and the developing world
are, as they’re supporting net zero emissions with 98% CO2 emissions
reductions by mid-century," Singer said.
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Associated Press reporters Jennifer McDermott in Providence, Rhode
Island, and Sibi Arasu in Bengaluru contributed to this report.
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