IEA: India’s Electricity Demand to Grow 7% as Renewables Overtake Coal Globally
The IEA says rapid growth in solar generation is helping meet rising power demand, while renewables are set to become the world’s largest source of electricity
Renewable electricity generation is forecast to grow by more than 8% this year, led by solar PV.
Visual Credits: Wikimedia Commons
Global electricity demand is expected to grow by 3.6% in 2026, driven by industry, cooling, electric vehicles (EVs) and data centres, while renewable energy is set to overtake coal as the world’s largest source of electricity generation for the first time, according to the International Energy Agency’s (IEA) Electricity Mid-Year Update 2026.
Renewable electricity generation is forecast to grow by more than 8% this year, led by solar PV, which remains the fastest-growing source of electricity. The IEA expects global electricity demand to rise further by 3.8% in 2027, after growing 3% in 2025.
India, one of the world’s fastest-growing major electricity markets, is expected to see electricity demand rise by 7% in 2026 after a slower 2025. IEA said that rapid industrial activity and severe summer heatwaves pushed power demand to record highs.
During these periods, solar supplied more than 60 GW, around 22% of India’s daytime peak electricity demand, highlighting its growing role in meeting rising consumption.
The report also found that India’s expanding solar capacity and reliance on domestic coal helped shield its electricity market from volatility in global gas prices during the West Asia conflict. While international prices rose during the first half of the year, India’s wholesale electricity spot prices declined by around 10%.
Renewables take the lead
Globally, electricity generation from renewable sources is expected to grow from 33% in 2025 to 37% by 2027, the IEA report said. Solar PV, with the most growth, is expected to overtake wind power this year to become the world’s second-largest source of renewable electricity generation, after hydropower.
According to the report, rapid growth in solar generation is helping meet rising daytime demand, particularly during periods of high air-conditioning use.
Electricity demand is expected to remain strong across major economies. In China, consumption is projected to grow by 5.5% in 2026, supported by manufacturing, EV charging, digital services and air conditioning. In the United States, demand is forecast to increase by 1.8% this year and 3% in 2027, driven by expanding data centres, industrial activity and cooling needs. Europe's electricity demand is also expected to recover, growing by 2.1% in 2026.
The next challenge
While solar is increasingly meeting daytime electricity demand, there are structural challenges that need to be addressed. As solar output drops at sunset, rapidly rising evening peak loads continue to place heavy demands on national grids. In India and other developing economies, utilities still have to rely on coal-driven thermal power generation to cover evening consumption.
Maintaining long-term grid security will require countries to pair solar expansion with substantial investments in battery storage, grid modernization, and complementary round-the-clock clean energy sources such as wind, nuclear, and pumped hydropower, according to the report.