Executive summary

Renewables have risen to the top of the policy agenda in many countries around the world as the current energy crisis underscores their role in strengthening energy security and diversifying supply. Disruptions to energy flows through the Strait of Hormuz stemming from the Middle East conflict have driven up oil and gas prices and increased market volatility. Because renewable resources are widely distributed, every country has domestic potential that can be developed competitively to strengthen energy security. Yet governments do not have to choose between security, affordability and sustainability. With well-designed policies, renewables can offer countries a way to diversify their energy mix, reduce exposure to imported fuels and high prices, lower overall electricity supply costs and cut emissions.

Renewables are already delivering major energy security benefits. Without their growth since 2010, global annual demand for fossil fuels would have been around 8% higher in 2025, an amount equivalent to India’s total energy consumption. Renewables have also displaced natural gas consumption equivalent to 11% of global demand. This has lowered the influence of gas-fired power plants on wholesale electricity prices and helped limit price increases during the crisis in many countries. In addition, the growth of biofuels and other renewables since 2010 has displaced 2.4 million barrels of oil equivalent per day – comparable to Canada’s total oil demand.

Global renewable capacity is forecast to grow by almost 4 800 gigawatts (GW) in the 2026-2031 period, 57% more than in the previous six years, with growth in emerging and developing economies outside China matching that in advanced economies for the first time. In the forecast period, India becomes the world’s second-largest growth market after China. Renewable capacity additions across Southeast Asia, the Middle East and Africa almost triple over the forecast period. Emerging and developing economies outside of China expanded at half the rate of advanced economies in the 2020-2025 period. New ambitions, energy security benefits, supportive policies and the growing competitiveness of wind and solar PV have raised the forecast for emerging and developing economies by almost 20% compared with our Renewables report a year ago.

While policy support remains central to renewable electricity growth in developing economies, consumers are increasingly driving deployment as affordable solar PV helps households and businesses gain access to more reliable electricity. One of the most striking shifts during the recent energy crises has been in consumer behaviour. Faced with high fuel prices and unreliable grid electricity, households and small businesses are increasingly turning to affordable solar PV to improve the reliability of their electricity supply and help lower bills. Based on module trade data and other indicators, we estimate that additional rooftop solar capacity has improved electricity access and services for at least 70 million households since 2022. Off-grid solar PV capacity growth is expected to increase by 2.5 times to around 80 GW by 2031, led by Pakistan, sub-Saharan Africa and Southeast Asia.

Higher oil prices and energy security concerns amid the Middle East crisis have led us to lift the forecast for liquid biofuel production growth by 40% compared with last year’s report. As an immediate response to higher fuel prices and availability challenges, many countries – especially in Southeast Asia and Latin America – are accelerating the implementation of new and previously announced liquid biofuel mandates to reduce reliance on imported fossil fuels. The impacts have been strongest in Southeast Asia, where biofuel consumption is set to grow by 11% between 2025 and 2026, well above the robust 7% average increase globally. Liquid biofuel demand worldwide is forecast to expand by nearly 30% by 2031, driven by energy security priorities, but robust sustainability frameworks are essential to ensure emission reductions without adverse land, water or biodiversity impacts. This includes frameworks that ensure transparent and verifiable greenhouse gas accounting and land-use and feedstock criteria.

The world’s total renewable electricity capacity is expected to increase by almost 85% between 2025 and 2031. Solar PV accounts for over three-quarters of this growth, while total onshore wind capacity increases by over 70% to 2 040 GW by 2031. China’s share of global renewable capacity growth declines from over 60% in 2025 to 53% over the forecast period. India, Southeast Asia, Africa and the Middle East substantially increase their contributions to global renewable capacity growth due to strong policy support and renewable market development.

The downward forecast revision for China is more than offset by stronger outlooks for the United States, India, Southeast Asia, sub-Saharan Africa and Latin America. Outside of China, Asia Pacific adds more than 840 GW of renewables over the 2026-2031 period, more than double the level in the 2020‑2025 period, with the forecast revised up by 15% on stronger solar PV growth in India and Southeast Asia. In the United States, we have revised our forecast higher by almost 40% from last year’s report, mainly on stronger solar PV deployment, since solar PV and battery storage can be installed quickly to meet fast-growing electricity demand, including from data centres. The forecast for sub-Saharan Africa’s renewable capacity expansion has been revised up by 54%, with solar PV accounting for over 80% of new capacity. Renewable power capacity in the Middle East and North Africa is expected to more than double in the forecast period. By the end of the decade, solar PV’s installed electricity capacity in Latin America is set to overtake that of hydropower, becoming the largest in the region. While hydropower remains the region’s largest source of electricity generation, its contribution declines from 40% in 2025 to 35% in 2031. Europe’s growth continues to expand, with renewable capacity forecast to rise by 40% more in the six years through 2031 than it did in the 2020-2025 period.

China’s shift from fixed tariffs to competitive auctions led to an almost 55% year-on-year decline in solar PV capacity additions in the first nine months of 2026. As a result, we have revised down our forecast for renewable capacity growth in China in the 2026-2031 period by 5%, or almost 116 GW, compared with last year’s report. Nonetheless, our main case still sees China exceeding the new renewable capacity and generation targets announced under its 15th Five‑Year Plan.

China’s global dominance of solar PV supply chains persists amid high financial strains and mounting bankruptcies, while India is emerging as an important source of diversification. Over 90% of major Chinese solar PV manufacturers have reported losses in 2026, and more than 70 companies have filed for bankruptcy since 2024, as overcapacity and falling prices have eroded margins. Despite this industry turmoil, solar PV supply chains remain highly concentrated in China at every stage, from polysilicon to modules. However, by 2031, India is expected to be the only country besides China capable of manufacturing every major component of the solar PV supply chain at scale, contributing to supply chain diversification. Wind supply chains are more geographically diverse than solar PV today, but the competitive landscape is shifting as Chinese wind manufacturers expand rapidly into international markets.

Faster implementation of auctions, grids, storage and permitting reforms could make the COP28 target of tripling global renewable capacity achievable in 2031. In our main case, global renewable capacity reaches around 9 710 GW by 2030 – 2.6 times the 2022 level and short of the target of tripling by 2030. However, faster implementation of competitive auctions, timely and increased grid investment, the expansion of battery storage, and permitting reforms could significantly raise deployment in the accelerated case. In this case, renewable capacity growth over the forecast period is 20% higher, allowing the world to reach the tripling target in 2031.

Renewables are forecast to generate almost 45% of global electricity in 2031, up from 33% in 2025. Electricity generation from wind and solar PV combined more than doubles globally, reaching over 28% of total power generation by 2031. Electricity generation from solar PV has already surpassed that of wind and is set to overtake that of hydropower in 2029, becoming the world’s largest source of renewable electricity.

Rising system integration challenges call for more flexibility. In 17 countries, the share of variable renewables in the power mix exceeds 50% by 2031, requiring stronger grids and interconnections, affordable storage, more dispatchable supply, and enhanced demand-side flexibility. Technical curtailment of wind and solar PV output in key markets almost doubled in both 2024 and 2025. It reached almost 200 terawatt-hours (TWh) in 2025 and could exceed 800 TWh by 2031, the equivalent of almost 8% of total variable renewable generation. At the same time, the number of hours of negative electricity prices continues to rise across Europe. Lower prices during periods of solar PV availability are reducing revenues for merchant projects and corporate power purchase agreements, testing the market-based deployment model that has expanded rapidly over the past decade. Battery storage deployment is accelerating in many countries and addressing some of these challenges, but not fast enough.

Hybrid projects combining solar PV, wind and batteries are emerging as an attractive option for increasing system flexibility. Hybrid systems combining solar PV and/or wind with batteries can already deliver electricity generation costs below USD 75 per megawatt-hour in many regions, with significantly greater dispatchability than standalone solar or wind projects. Increasingly supported through hybrid auctions and procurement schemes – mainly in India – these systems can reduce curtailment, improve asset utilisation and provide flexibility services cost-effectively under favourable market conditions. As battery costs continue to fall, hybrid systems are expected to play a growing role in the next phase of renewable expansion.

Falling battery costs are also driving rapid growth in consumer-led storage deployment. Behind-the-meter battery storage is expected to expand almost sixfold to over 670 gigawatt‑hours by 2031, with more than one-third of home PV systems including a battery by that year. As storage becomes more affordable, households and businesses are using batteries to reduce their exposure to electricity price volatility. Where market and regulatory design, price signals and incentives are appropriate, behind-the-meter batteries can also help meet overall system flexibility needs.

Grid connection queues are shifting towards storage and hybrid projects, while reforms are filtering out less viable projects. Global grid connection queues for advanced-stage renewable energy projects increased by 60% over the past year to 3 000 GW, with battery storage and hybrid renewable project applications accounting for the entire increase. Meanwhile, stricter connection rules and queue management reforms in India, the United Kingdom and the United States removed almost half of early-stage standalone wind and solar PV projects from queues, helping to prioritise more viable projects.

Renewable energy consumption in transport is forecast to increase by 60% in the forecast period in our main case, raising its share of global transport energy demand to 6%. Renewable electricity used by electric vehicles accounts for almost half of this growth, with China and Europe together contributing 80% of the increase in EV-related renewable electricity use. Liquid biofuels remain the second-largest driver of growth, supported by stronger mandates and rising transport fuel demand. Aviation and shipping become key new markets as governments introduce sustainable aviation fuel mandates and low-carbon fuel regulations and the industries seek to diversify fuel supplies. Biomethane, renewable hydrogen and e-fuels expand rapidly from a low base, providing further options for reducing emissions in hard-to-abate transport uses in the longer term.

Robust sustainability frameworks are essential to scale up liquid biofuel use. Global feedstock demand for liquid biofuel production is expected to increase by 30% by 2031, with oil-based feedstocks growing fastest as demand rises for biodiesel, renewable diesel and biojet fuel. Liquid biofuels offer significant lifecycle emissions reduction potential across all forms of transport, but sustainability underpins both current and future demand. For countries seeking to expand domestic production and capture growing export opportunities, developing and fully implementing transparent, robust and internationally agreed sustainability frameworks will be essential. At the same time, the possible impacts of current high fertiliser prices and extreme weather conditions, including El Niño, remain important factors affecting the forecast for biofuels.

The share of modern renewables meeting demand for heating rises from 15% in 2025 to 19% in 2031, helping diversify energy supply and putting heat-related carbon dioxide emissions into decline for the first time. Energy security concerns continue to support the deployment of domestic renewable heat sources and reduce exposure to high fossil fuel prices and import dependence. Renewable electricity use for heat, through heat pumps and industrial electrification, increases by more than 50% over this period, providing around two-thirds of the growth in demand for modern renewable heat. The pace of electrification remains closely linked to energy prices and policy design, which can vary across countries, while also depending strongly on electricity taxes and levies compared to natural gas. Direct renewable heat from modern bioenergy, solar thermal and geothermal sources still accounts for the majority of modern renewable heat use (around 60% in 2025), but contributes only around one-quarter of growth through 2031.

Heat pumps and district energy offer the largest opportunities to accelerate the deployment of renewable heat. The increasing share of renewables in electricity generation and growing electrification are opening new opportunities for renewable heat in buildings and industry. District heating networks remain a largely untapped opportunity. Renewables supply just 7% of global district heat, despite networks’ potential to integrate renewable and recoverable heat at scale.

Global biogas production is forecast to grow by almost a fifth by 2031, entirely driven by biomethane, whose production nearly doubles amid expanding policy support and compatibility with existing gas infrastructure. As a result, biomethane’s share of biogases production rises from 22% today to 35% in 2031. Europe remains the largest biomethane producer, followed by the United States, while large emerging and developing economies are scaling up supply from a small base. India’s production is forecast to grow almost ninefold by 2031, and Brazil, China and India are developing robust policies to support uptake. Despite abundant technical potential from organic waste and residues, the development of commercial feedstock supply chains remains a challenge for unlocking faster growth.

Biogases are expanding beyond road transport, strengthening energy security and creating new low-emissions fuel opportunities. Road transport remains the largest biomethane market, but demand is growing rapidly in industry and buildings as procurement frameworks, certificate markets and regulations mature. Bio-LNG use in maritime shipping is emerging as an attractive option to comply with decarbonisation regulations, mainly in Europe. Domestic biogas and biomethane production is already reducing dependence on natural gas imports by 22 percentage points in Sweden, by 10 in Germany, and by 8 in France.