Global energy demand growth in 2025 slowed from the previous year, but electricity demand remained much stronger than overall consumption. The International Energy Agency said total global energy demand rose 1.3% in 2025, slightly below the previous decade’s 1.4% average and well below 2024 levels. The agency attributed the slowdown to weaker economic growth, less extreme temperatures in some regions, and faster deployment of efficient technologies.
Even with that moderation, electricity use continued to grow much faster. The IEA said global electricity demand increased by about 3%, more than twice the rate of overall energy demand growth. That pace was slower than in 2024, partly because India and Southeast Asia saw less severe heatwaves and lower cooling demand. Still, it remained above the average of the last decade.
The strongest headline in the report was the role of solar PV. The IEA said solar was the single largest contributor to global energy supply growth in 2025, accounting for more than 25% of the increase. It was the first time a modern renewable source led growth in global primary energy supply. Natural gas ranked second, contributing 17% of the increase, reflecting its continued importance in electricity generation.
In financial markets, that mix matters because it shows two forces operating simultaneously. Electricity demand is rising rapidly, driven by new technologies and industrial activity, while the supply response is becoming more diverse. Solar is scaling faster than any other source, yet gas remains essential in many systems. That combination supports investment cases in both grid modernization and flexible generation.
Renewables and Nuclear Covered Most Demand Growth
The IEA said that renewables and nuclear together accounted for nearly 60% of all growth in energy demand last year. It also said power generation from those sources exceeded total growth in electricity demand. That is a significant result because it suggests lower-emissions generation expanded fast enough to absorb all additional electricity consumption globally.
The scale of solar growth was especially notable in the power sector. According to the IEA, the additional 600 terawatt-hours of solar PV generation in 2025 marked the largest structural increase ever recorded in a single year for any electricity generation technology. That growth contributed to a decline in global coal-fired electricity generation, even though coal demand trends differed sharply by country.
The report also highlighted battery storage as the fastest-growing power technology in 2025. Roughly 110 gigawatts of new battery storage capacity were added during the year, exceeding the largest-ever annual capacity additions for natural gas. At the same time, more than 12 gigawatts of nuclear reactor capacity began construction, reflecting renewed momentum for nuclear projects in several regions.
These figures reinforce a broader market shift. New power systems are being built around generation, storage, and grid flexibility rather than generation alone. Solar can add large volumes of low-cost power, but batteries and nuclear help address reliability and dispatchability concerns. For investors, that means the energy transition story is increasingly about infrastructure depth rather than a single technology race.
Oil, Coal and Gas Trends Diverged Across Economies
The IEA said global oil demand rose 0.7% in 2025, broadly in line with its earlier projections. One reason growth remained limited was the rapid rise in electric vehicle adoption. The agency said electric car sales increased by more than 20% to over 20 million units, meaning about one in four new cars sold worldwide was electric. That continued to constrain demand for road fuels.
Coal trends were more mixed. The IEA said stronger renewable growth reduced coal use in Chinese power generation, while coal demand increased in the United States because high gas prices encouraged gas-to-coal switching in electricity production. Even so, the agency said the overall rate of global coal demand growth slowed in 2025.
Regional differences were also pronounced. The IEA said energy demand growth in the United States reached its second-highest level this century, excluding post-recession recovery years. That was driven by strong electricity demand from data centers, robust industrial activity, and colder winter temperatures. In China, which still accounted for the largest share of global energy demand growth, the growth rate slowed sharply to 1.7% as renewables displaced less efficient coal and energy efficiency gains strengthened.
Those divergences are important because they show the global energy system is not moving in a uniform direction. Different fuel prices, weather conditions, industrial trends, and policy structures are producing different national outcomes. That makes country-level analysis more important for energy equities, fuel markets, and infrastructure planning.
Emissions Growth Slowed, but Advanced Economies Reversed Course
The IEA said global energy-related CO2 emissions grew by around 0.4% in 2025. It reported that China’s emissions declined, supported by the rapid deployment of renewables and other low-emissions technologies. India’s energy-related emissions were flat for the first time since the 1970s, excluding the pandemic period, thanks to an unusually strong monsoon that helped curb growth.
By contrast, emissions in advanced economies increased because of colder winter conditions and greater fossil fuel use. The IEA said emissions from advanced economies rose 0.5%, while those from emerging and developing economies increased 0.3%. It was the first time since the 1990s that advanced economy emissions grew faster than those of emerging and developing economies.
The report closes with a broader structural point. Since 2019, cumulative deployment of low-emissions technologies has avoided annual fossil fuel consumption equal to the entire energy demand of Latin America. In aggregate, technologies such as solar, wind, and heat pumps now displace natural gas demand equivalent to about half of annual global LNG exports. That gives the global energy demand growth 2025 story a wider significance. Demand still rose, but the composition of supply is changing in ways that are becoming harder for markets to ignore.
