Global energy demand grew at a slower pace in 2025 than the year before, but electricity consumption continued to rise much faster than overall demand – with solar PV becoming the largest contributor to growth in global energy supply for the first time, according to a new International Energy Agency (IEA) report.

The latest edition of the IEA’s Global Energy Review provides a comprehensive global assessment of trends across the energy sector in 2025.

Based on the latest data, it covers energy demand, electricity generation and use, energy technology deployment, and energy-related carbon dioxide (CO2) emissions.

The report shows that overall global energy demand growth slowed to 1.3 per cent in 2025, slightly below the previous decade’s average of 1.4 per cent and significantly lower than in 2024.

The main reasons for this slowdown were lower global economic growth, less extreme temperatures in some regions, and rapid uptake of more efficient technologies.

At the same time, global electricity demand increased by around 3 per cent – well over twice the rate of overall energy demand growth.

Although electricity demand growth was slower than in 2024, reflecting factors such as lower cooling demand in India and Southeast Asia amid less severe heatwaves, it remained above the average of the past decade.

Electricity demand growth was driven by multiple sectors across buildings and industry – and boosted by fast-growing demand from electric vehicles and data centres.

All major fuels and technologies expanded to meet rising demand, but at very different rates. Solar PV was the single largest contributor to growth in global energy supply in 2025, accounting for more than 25 per cent of the increase – the first time on record that a modern renewable source has led global primary energy supply growth.

Natural gas took the next largest share, at 17 per cent, reflecting its role in power generation in many countries.

Overall, renewable sources and nuclear met nearly 60 per cent of all growth in energy demand – and power generation from these sources exceeded total growth in electricity demand.

Global oil demand rose by 0.7 per cent, in line with IEA projections. This reflected continued growth of electric vehicles, which constrained demand for road fuels.

Electric car sales in 2025 increased by over 20 per cent to more than 20 million units – making up around one in four new car sales worldwide.

 Strong renewables growth reduced coal use in power generation in China, while coal demand increased in the US as high natural gas prices drove gas-to-coal switching in electricity generation.

Overall, the rate of coal demand growth slowed in 2025.

“Global energy demand continued to increase in 2025 against a complex economic and geopolitical backdrop, with one trend unmistakeable: the expanding electrification of economies,” said IEA Executive Director Fatih Birol. “Electricity consumption is growing much faster than overall energy demand – and one energy source is growing much faster than any other. Solar PV accounted for over a quarter of all of the world’s energy demand growth – more than any other source, for the first time – followed right after by natural gas. In today’s rapidly shifting landscape, countries that prioritise resilience and diversification will be best placed to manage volatility and deliver secure and affordable energy in the years ahead.”

Beneath the global totals, trends diverged sharply across major economies. Energy demand growth in the United States rose to its second-highest level this century – excluding post-recession recovery years – boosted by strong electricity demand from data centres, robust industrial activity and also colder winter temperatures.

Meanwhile, China accounted for the largest overall share of global energy demand growth last year, but its growth rate dropped sharply to 1.7 per cent as renewables displaced coal, which is less efficient, and broader energy efficiency gains strengthened.

At the same time, growth in global energy-related CO2 emissions slowed in 2025, rising by around 0.4 per cent. According to the report, China’s emissions declined in 2025, supported by a surge in renewables and other low-emissions technologies.

India’s energy-related CO2 emissions were flat for the first time since the 1970s – excluding the Covid-19 pandemic – with the effects of an unusually strong monsoon season playing a significant role in curbing emissions growth.

By contrast, in advanced economies, an especially cold winter pushed fossil fuel use and emissions higher.

Taken together, these developments meant that emissions from advanced economies grew faster (+0.5 per cent) than those from emerging and developing economies (+0.3 per cent) for the first time since the 1990s.

In the electricity sector, the additional 600 terawatt-hours of solar PV generation worldwide in 2025 marked the largest structural increase ever recorded in a single year for any electricity generation technology, contributing to a decline in coal-fired electricity generation globally.

Battery storage was the fastest-growing power sector technology in 2025.

The roughly 110 gigawatts of new battery storage capacity added during the year exceeded the largest-ever annual capacity additions for natural gas.

Meanwhile over 12 gigawatts of nuclear power reactors began construction in 2025, amid renewed momentum for nuclear projects in several regions.

Cumulative deployment of low-emissions technologies since 2019 now avoids annual fossil fuel consumption equivalent to the entire energy demand of Latin America.

In the aggregate, use of technologies such as solar PV, wind power and heat pumps now displaces natural gas demand equivalent to half of all global annual LNG exports. -OGN/TradeArabia News Service