Renewables Overtake Coal

Why It Matters

The shift reshapes power markets, accelerates investment in clean technologies, and raises the stakes for meeting international climate targets.

Key Takeaways

• Renewables reached 34% of global electricity mix in 2025.
• Solar contributed 75% of net generation increase, adding 636 TWh.
• Coal’s share fell to 33%, its steepest decline since 2000.
• Fossil fuels still generate 57% of electricity, hindering climate goals.

Pulse Analysis

The 2025 energy landscape marks a watershed moment as renewables surpass coal to become the dominant source of electricity worldwide. This transition, fueled by a dramatic 75% share of solar in the net generation increase, reflects a two‑decade trajectory of falling technology costs, supportive policies, and massive scale‑up of wind farms. While renewables now hold 34% of the mix, the overall demand for electricity continues to rise, underscoring the importance of clean‑energy capacity to meet growth without reverting to carbon‑intensive sources.

Solar’s rapid expansion—adding 636 TWh—has been driven by record‑low panel prices, streamlined permitting, and robust corporate procurement. Simultaneously, wind installations have expanded across onshore and offshore markets, benefitting from improved turbine efficiency. These dynamics have compressed coal’s share from a 41% peak to 33% and nudged gas down to 24.4%, prompting utilities and investors to re‑evaluate legacy assets. The declining economics of coal, coupled with heightened ESG scrutiny, are accelerating retirements and redirecting capital toward battery storage and grid‑modernization projects that accommodate intermittent renewables.

Despite the progress, fossil fuels still generate roughly 57% of global electricity, a hurdle for achieving net‑zero goals. The continued decline of nuclear—down to 8.9%—removes a low‑carbon baseload option, intensifying the need for flexible resources such as demand‑response, pumped hydro, and emerging green hydrogen solutions. Policymakers must balance the pace of renewable integration with grid reliability, while investors eye opportunities in next‑generation storage, smart‑grid technologies, and carbon‑capture for remaining fossil plants. The coming decade will determine whether the momentum can translate into a fully decarbonized power sector.