Renewable energy alternatives will become the largest sources of electricity in the next 10 years, new research suggests, as nations seek to diversify their energy resources to avoid future supply shocks, as seen with the closure of the Strait of Hormuz.
BloombergNEF released its annual energy outlook on Tuesday, forecasting that if countries continue on the current path of deploying clean energy technologies such as wind and solar, the world will reduce its dependence on fossil fuels.
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“So far in this decade, the world has suffered three substantial energy shocks – Covid-19, the war in Ukraine and most recently the Iran war in the Middle East,” analysts wrote in the report. “Each has highlighted the inherent volatility and insecurity of today’s energy system.”
In 2025, coal accounted for the largest share of global electricity generation at just over 32%. Natural gas followed closely with 21.8%, while solar and wind made up 9.1% and 8.9%, respectively.
BloombergNEF now estimates that solar will outpace coal by 2032, making up 20.6% of global electricity generation, compared to coal’s 19.8%. Natural gas is only expected to make up 19.2% that same year.
Renewables’ share of electricity generation is only expected to grow in the years after, with solar power estimated to make up 31% by 2050, and wind accounting for 24.9%.
This increased deployment of renewable energy is not expected to completely phase out fossil fuels, as coal is expected to make up 8.3% of electricity generation in 2050, according to the report. Natural gas is also estimated to still make up 17.1% of electricity generation that same year.
This is in part due to the rapid deployment of large-load facilities such as data centers, which are being developed to support advances in artificial intelligence.
In 2025, global data center capacity reached around 84 gigawatts, consuming around 1.9% of total electricity demand worldwide. This is roughly equivalent to a 20% increase compared to 2024.
Over the next 25 years, BloombergNEF estimates that demand from data centers will more than double, making up 3.6% of total demand — roughly a tenth of all electricity consumed worldwide.
The report acknowledged that while China, India, and Europe will see electrification dominate over fossil fuels by the early 2040s, the United States will see a much slower transition.
This is in part due to the Trump administration’s own backing of traditional fuels such as coal and natural gas, and its push to slow the development of renewable energy alternatives.
Just last week, Energy Secretary Chris Wright advocated fossil fuels during an interview with CNBC, saying the “world runs on hydrocarbons.”
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“It did when I was born. It does today,” he said. “It will when I die. We just simply don’t have replacements for most all of the uses of hydrocarbons.”
BloombergNEF’s latest outlook estimates that the U.S. will see electricity become the dominant fuel in 2047.
