Global clean energy capacity increased from 120 GW to 530 GW annually over the period and is projected to reach 730 GW annually by 2035. This rapid expansion in renewable energy generation marks a significant shift in a well-established market and will be a key driver behind five emerging trends.
Market Trends
The first trend highlights that global power demand is expected to grow by one-third over the next decade. Asia-Pacific will contribute 66% of this growth, with India playing a significant role. In well-established energy markets like Europe and North America, electrification and rising energy needs from data centers will drive substantial additional demand.
The second trend indicates that the majority of new power capacity to meet rising demand will come from renewable sources. By 2035, renewables are expected to contribute 90% of new power generation and comprise 70% of total power capacity.
The third trend shows that conventional thermal fuels, particularly natural gas, will remain essential, offering baseload power and system flexibility. Fossil fuels, including coal in certain markets, will contribute the remaining 30% of power capacity.
The fourth trend predicts a significant rise in investment in renewables, battery storage, and hydrogen, averaging $775 billion annually through 2030—40% higher than 2023 levels, adjusted for inflation. Asia-Pacific will attract 46% of this investment, followed by Europe at 26% and North America at 16%.
The final trend in energy markets is driven by two key factors. First, the retirement of most coal generation in the US and Europe, along with a slowdown in coal use in China. Second, the widespread adoption and decreasing costs of renewables. These shifts are expected to reduce global CO2 emissions from power generation by 10% by 2035, even with increased power demand and capacity.
The global energy landscape is undergoing transformative changes driven by rising power demand, the rapid growth of renewables, and the continued role of thermal fuels like natural gas. Substantial investments in renewable energy, battery storage, and hydrogen are reshaping power systems, with Asia-Pacific leading the way in adoption. Meanwhile, the shift away from coal and the declining costs of renewables will contribute to a significant reduction in global CO2 emissions, underscoring a clear trend toward a more sustainable and flexible energy future.
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How can governments and industries accelerate the transition to renewable energy while ensuring energy security and meeting rising global power demand?