Renewable heat

Renewable electricity used for heat accounts for around two-thirds of the increase in modern renewable heat to 2031. Modern bioenergy remains the largest renewable heat source and continues to grow over the outlook period, although its share in renewable heat gradually declines as electricity-based heat expands more rapidly. Growth is concentrated among the economies most advanced in achieving Age of Electricity goals: the People’s Republic of China (hereafter, “China”) delivers around one-third of the increase, mostly through industrial electrification, while the European Union is the second-largest contributor, thanks primarily to buildings sector electrification.

Heat accounts for around half of global final energy consumption and remains the largest source of energy-related CO2 emissions. Nevertheless, the sector has received less policy attention than the power and transport sectors. With greater electrification and wider deployment of renewable heat technologies, the share of modern renewable energy sources in global heat demand rises from 15% in 2025 to 19% in 2031, cutting total heat-related CO2 emissions roughly 4% over the period. While direct emissions from fuel combustion remain broadly unchanged, indirect emissions decline as power sector decarbonisation steadily lowers the carbon intensity of electricity used for heat.

Three overarching drivers shape the outlook for renewable heat to 2031: electrification, energy security and energy access. In advanced economies, electrification (mainly through heat pumps) and increasing shares of renewables in electricity generation propel growth. Energy security concerns continue to support the deployment of domestic renewable heat sources and reduce exposure to fossil fuel price volatility and import dependence. In emerging markets and developing economies, renewable heat deployment remains closely linked to expanding energy access, improving clean cooking and reducing reliance on the traditional use of biomass.

Renewable electricity used for heat expands more than 50% over the outlook period, rising from 9.4 EJ in 2025 to 14.6 EJ in 2031. Together with ambient heat captured by heat pumps, it accounts for three-quarters of renewable heat growth worldwide. In buildings, renewable electricity overtakes the modern use of bioenergy to become the largest renewable heat source.

Rising electrification and power sector decarbonisation both drive growth. In industry, renewable electricity use for heat increases from 5.6 EJ to 8.9 EJ, led by process electrification in China. In buildings, it rises from 3.8 EJ to 5.7 EJ as heat pumps and electric water heating expand. At the same time, the renewable share of electricity used for heat increases from 35% to around 46%, amplifying the impact of electrification on renewable heat deployment.

The pace of electrification remains closely linked to energy prices and policy design. Electricity use for heat increases from 26.9 EJ to 32.1 EJ by 2031, but adoption depends on the relative cost of electricity and fossil fuels. Where taxes and levies keep electricity prices high relative to gas, the economic case for electrification remains weaker.

Direct renewable heat technologies are still the main source of renewable heat, but their contribution to growth is declining. Modern bioenergy, solar thermal and geothermal account for around 60% of renewable heat consumption in 2025 yet contribute only one-quarter of growth to 2031 as electricity-based heat expands more rapidly. This marks a significant shift from 2019-2025, when direct renewable technologies provided more than one-third of renewable heat growth. Together, these technologies expand 1.6% per year over the outlook period, compared with more than 7% for renewable electricity-based heat.

Solar thermal growth slows as China's market matures. Global consumption increases roughly 3.5% per year to 2031, a decline from recent years. China, which accounts for close to 70% of global deployment, records slower growth amid a continued slowdown in residential construction, an increasingly saturated domestic solar water-heating market and growing competition from heat pump water heaters. These trends outweigh stronger expansion elsewhere.

Modern bioenergy remains the largest renewable heat source, but growth is modest. Consumption rises from 17.8 EJ in 2025 at an average rate of 1.4% per year, with most additions occurring in industrial applications in emerging economies, particularly India. In buildings, consumption remains broadly stable as heat pumps continue to gain market shares and concerns over air quality constrain residential biomass-based heating.