Renewable electricity generation rises as coal retreats. What did 2025 bring?

 In 2025, global energy demand grew more slowly than in the previous year. Electricity demand saw the strongest growth, most of which was met by renewable energy sources (RES), according to a new analysis by the International Energy Agency (IEA). 

According to the IEA analysis, year-on-year energy demand growth reached 1.3%, significantly below the 2% recorded in 2024. The historical average for the past decade is 1.4%, making last year’s growth rate relatively typical. 

The European Union saw the slowest growth in energy demand, with demand for coal and oil even declining. By contrast, natural gas was the main driver of higher demand in Europe. China once again recorded the fastest growth in consumption, with significant increases in renewable and nuclear power generation. 

"Global energy demand continued to grow in 2025 against a complex economic and geopolitical backdrop, with one trend unmistakable: the expanding electrification of economies," said IEA Executive Director Fatih Birol.

The full report contains a range of interesting data and statistics. Here are some of the most important or unusual findings:

Electricity

Global electricity demand growth slowed to around 3% in 2025, while renewable generation matched coal-fired generation for the first time. Emerging markets and developing economies accounted for 80% of global demand growth.

China was the main driver, with consumption exceeding 9 500 TWh (up 5.1% year on year, less than in 2023–2024). In the US, demand growth slowed to 2% (from 2.8% in 2024), with data centres accounting for around 50% of the increase in consumption. In the EU, demand recovered slightly, rising by 1%, supported by a colder winter and a partial recovery in industry.

Gas

Global natural gas demand grew by just 1% in 2025, a significant slowdown from 2.8% in 2024. In the EU, demand rose by around 3% (the strongest growth since 2021), mainly due to higher gas-fired power generation and colder temperatures at the start of the year. EU gas-fired power generation rose by almost 8% year on year, driven by higher electricity demand and lower wind and hydropower output. Higher gas prices, however, curbed consumption in industry.

In China, gas demand growth slowed to 2% (from 7% in 2024). In the US, gas demand grew by slightly more than 1%. In the buildings sector, growth was around 9%, mainly due to colder weather. In the power generation sector, demand fell by around 3.5%, driven by higher renewable generation and a partial return to coal. In Japan, gas consumption fell by almost 1%, mainly due to higher electricity generation from nuclear power.

Factors affecting electricity demand

Global electricity demand grew significantly across all sectors in 2025, with the buildings sector the main driver, accounting for almost 45% of the total year-on-year increase. This trend was supported by structural factors, particularly the continued electrification of end-use consumption, the growing number of household appliances, and the rapid expansion of air-conditioning units and heat pumps. Rising data centre demand also played a significant role in some regions.

Factors affecting natural gas demand

Natural gas demand followed different trends across regions in 2025, driven by a combination of macroeconomic conditions, price dynamics and weather factors. In the United States, consumption rose slightly year on year, mainly due to a colder winter and greater heating needs.

At the same time, demand in the power sector declined as renewable generation increased and gas became less price-competitive against coal following a sharp rise in spot prices. These price pressures led to some substitution of gas with coal in the energy mix.