Global renewable energy generation surpasses coal for first time

Global wind and solar generation surpassed coal for the first time in H1 2025, marking a critical inflection point where renewables are now meeting global electricity demand growth and beginning to displace fossil fuels, according to Ember research. This milestone was primarily driven by significant renewable expansion in China and India, with solar power growing by nearly a third year-over-year. While the US and Europe experienced increased fossil fuel reliance due to demand outstripping renewable capacity or weather impacts, this trend, supported by IEA forecasts of renewables more than doubling by 2030 led by solar, signals a fundamental shift in global energy investment and market dynamics.

Analysis

The first half of 2025 marked a significant inflection point as global wind and solar farms collectively generated more electricity than coal plants for the first time, according to Ember research. Solar power surged by nearly a third year-over-year, meeting 83% of the global increase in electricity demand, while wind power grew by over 7%. This achievement signals clean power's capacity to meet demand growth and begin displacing fossil fuels.

This renewable energy surge was predominantly driven by China and India, with China adding more renewable capacity than the rest of the world combined, resulting in a 2% reduction in its fossil fuel use. India's substantial renewable growth led to a 3.1% and 34% decline in its coal and gas consumption, respectively. Conversely, the US experienced a 17% increase in coal generation as demand outpaced its renewable sector, and the EU saw increased gas and coal use due to weather-related slumps in wind and hydro.

The International Energy Agency (IEA) forecasts global renewable capacity to more than double by 2030, with solar PV accounting for 80% of new clean energy additions. China is projected to remain the largest growth market, followed by India, alongside emerging solar growth in regions like Saudi Arabia and Southeast Asia. This sustained growth trajectory underscores a fundamental shift in global energy investment and market dynamics towards decarbonization.

Key Decisions for Investors

• Increase exposure to solar PV and wind energy sectors, particularly companies involved in manufacturing and project development, given their accelerating displacement of fossil fuels and projected growth.
• Focus on investment opportunities in emerging markets like China, India, and Southeast Asia, which are identified as primary drivers of future renewable energy capacity expansion.
• Monitor policy developments and grid infrastructure investments in developed markets (US, EU) to assess their renewable integration challenges and potential for future growth despite recent fossil fuel increases.