The world is entering a new era of falling power sector emissions. This chapter begins by examining why power sector emissions are likely to fall in 2025 – leaving 2024 as the peak of fossil generation – and then examines how fast global power emissions may fall this decade, as policymakers gear up to triple global renewable capacity and expand other clean sources.
Solar energy is leading the energy revolution, unlocking the possibility of achieving the tripling goal, and putting the electricity sector on course toward climate targets. We look at how the rise in new solar capacity in 2024 surpassed expectations and how growth in 2025 will continue.
We then contrast the weak electricity demand growth in 2024 – especially in OECD countries – with the big rise expected in 2025 and beyond. The future expansion of electrification – with China leading on this – and also the growth in data centers and rising use of air conditioning are significantly adding to electricity demand. We highlight just how important it is to avoid wastefulness and inefficiency, which reduce our ability to quickly reduce emissions.
Finally, we look at case studies of policies that have helped three very different countries – China, Brazil, and the Netherlands – achieve rapid growth in solar and wind in the last few years.
Through these four trends, we explore the factors behind the rapid and profound changes rippling through the electricity sector and set out the reasons why these changes will only accelerate in the coming years.
2024 was likely the peak of fossil generation, unlocking a new era of falling power sector emissions. Solar and wind have dramatically slowed emissions growth and many countries are already past peak power emissions. We forecast that power sector emissions will likely fall in 2025 – and would likely have done so already in 2024 had it not been for droughts reducing hydro generation. In last year’s report, we estimated that there would be a 0.4% reduction in power sector emissions in 2024, but because of the record fall in hydropower generation emissions instead grew by 1%.
In the years ahead, solar and wind additions are forecast to be sufficient to reduce power emissions, even under scenarios of high electricity demand growth. The fact that solar and wind will continue to increase gives confidence that power sector emissions will not just plateau but fall. Tripling global renewable electricity capacity by 2030 could supercharge the transition, and has the potential to help halve power sector emissions by 2030.
The growth of solar and wind has set the conditions for a peak and decline in power sector emissions. Solar and wind have already dramatically slowed emissions growth and many countries are past the peak.
Clean electricity growth – led by solar and wind – has helped to slow the growth in fossil fuels by almost two-thirds in the last ten years. Fossil fuel generation rose on average by 3.5% per year from 2004 to 2013, slowing to 1.3% per year from 2014 to 2024.
Fossil fuel electricity generation was 22% lower in 2024 than it would have been if solar and wind generation hadn’t been built. Between 2006 and 2024, wind and solar have avoided 19 gigatonnes of CO2 emissions, which is over half of 2024’s total global CO2 emissions.
Although power sector emissions reached an all-time high in 2024, solar and wind have prevented emissions rising even faster.
More than half of economies are already at least five years past a peak in electricity generation from fossil fuels. Emissions from these 118 power sectors have fallen by a quarter in the last decade. Collectively, they represent 43% of global electricity demand.
Many developed economies peaked over a decade ago. European countries have seen the biggest falls – fossil generation in the UK has fallen by 63% since its peak in 2008, Greece by 57% (having peaked in 2007), Spain by 59% (2005) and Germany by 42% (2007). The biggest falls have happened in the last few years as solar and wind power have accelerated.
Other key developed economies have peaked, and seen smaller falls. Fossil generation in the US has fallen by 16% since its peak in 2007, Canada by 26% (having peaked in 2001), Australia by 24% (2009), Japan by 29% (2012) and South Korea by 13% (2018).
Collectively, OECD countries saw power sector emissions peak in 2007, with a fall of 28% since then.
Falling power sector emissions are already the reality for many countries, and the scene is now set for global emissions to start falling.
Looking back in time, it is likely that 2024 will have been the peak of power sector emissions.
Clean capacity growth was already enough to deliver an emissions decline in 2024, but a record fall in hydro generation prevented that. Power sector emissions will likely fall in 2025, due to solar surging and a rebound in hydro generation, even as electricity demand picks up.
A signal is emerging from the noise of year-on-year variability: the world is at the peak, and about to enter a new era of falling power sector emissions.
Power sector emissions will fall, but the pace of the decline depends on how fast the world embraces clean electricity.
Power sector emissions will inevitably reduce given current forecasts for solar and wind, but the step up to tripling renewables would almost halve them.
The analysis showed that many national plans are behind the curve of current renewables growth and need updating to keep up; this would then make a global tripling a real possibility. Many OECD countries – including the US, Canada, the UK, Netherlands and Germany – are already aiming for net zero power by 2035.
Power was the biggest emitting energy sector in 2024. It is possible that it could become the first sector to reach net zero, while unlocking emissions reductions across the global economy as the world moves towards a clean, electric future. Power sector emissions will fall this decade. But how rapidly they fall depends on the actions taken now.
China, Brazil, and the Netherlands have seen remarkable growth in wind and solar that has transformed their electricity systems at a rapid pace. Signaling ambition can create an environment in which wind and solar can thrive, enabling trust and confidence among investors. Choosing the right set of incentive mechanisms to drive the demand for wind and solar systems as well as the regulatory solutions to overcome technical barriers and facilitate the integration of wind and solar into the mix is more important than a country’s economic or geographic starting position.
Of course, even countries that have been successful in their transition so far are still facing challenges. For example, in the Netherlands, new wind and solar installations are being held back by grid congestion issues that could have been avoided with better long-term planning. Similarly, policies like net metering offer great incentives for residential solar adoption, but ensuring that additional grid costs are not shifted onto lower-income households is an important consideration to achieve a just transition. Additionally, the impacts of wind and solar deployment on local communities have underlined the need to ensure adequate safeguards are in place.
Crucially, China, the Netherlands, and Brazil have overcome barriers to the transition in the past. The current political, economic, and engineering challenges are also solvable. We have all the tools we need to get transitions off the ground where they have just started, facilitate acceleration where it is most needed, and push progress further in countries leading the global transition.
