Global Shift to Renewables Accelerates Amid Energy Crises
The world's growing appetite for electricity, fueled by data centres, population growth, rising incomes, and electric vehicles, is set to make solar power the dominant energy source by 2032, according to BloombergNEF's annual New Energy Outlook report released Tuesday.
The analysis highlights that three major energy shocks this decade—the COVID-19 pandemic, the war in Ukraine, and the Persian Gulf conflict—have ironically boosted the energy transition. Countries are increasingly seeking to reduce dependence on imported fossil fuels and enhance energy security, accelerating the adoption of renewables and electrification.
Solar and Wind to Overtake Coal
Under the Economic Transition Scenario (ETS), which assumes prevailing economic forces drive energy choices, solar and wind power will continue to expand their share of the global power mix. Solar becomes the largest electricity source in 2032, followed by wind in 2034, displacing coal from the top spot. This shift is supported by massive battery deployment, with BNEF projecting global energy storage to grow from 220 gigawatts in 2025 to 2,000 gigawatts by 2035. China leads battery deployment in the near term, while India and Europe are expected to see significant demand starting in the 2030s.
Climate Goals Under Pressure
Despite the renewable energy boom, BNEF's analysis indicates the world is not on track to meet the Paris Agreement's most ambitious goal of limiting global warming to 1.5°C. Under the ETS, global temperatures are projected to rise 2.4°C by 2050, with emissions from India, Southeast Asia, and Latin America continuing to increase. China, the world's largest emitter, has already peaked its emissions in 2025 and is expected to see a decline. Even under a net-zero scenario by 2050, warming is projected to exceed 1.8°C by century's end, higher than BNEF's 2024 estimate of 1.75°C.
BNEF also examined the Net-Zero Scenario (NZS), where climate policies are the primary driver, aligned with government commitments under the Paris Agreement. In this scenario, the transition to clean energy is even faster, but still faces challenges in meeting temperature targets.
