From KlimaNachrichten

IEA forecasts new all-time high in coal consumption – wind and hydropower, of all things, are partly to blame

Do you still remember the forecasts? Coal was supposed to be in retreat, fossil fuels were to be displaced, and the energy transition was to be unstoppable. The International Energy Agency (IEA) now has to announce remarkable news: global demand for coal will reach a historic high of 8.85 billion tons in 2025 – an increase of 0.5 percent compared to the previous year.

USA: Up eight percent

In the USA, coal demand will increase by eight percent in 2025. After 15 years of continuous decline – an average of six percent per year – coal is returning. The reasons: higher natural gas prices and slower shutdowns of coal-fired power plants. What was sold as structural change turns out to be a cyclical snapshot.

Europe: When wind and water fail

The real punch line takes place in the European Union. Here, coal demand declined, but “significantly less strongly than in the last two years”. The reason, according to the IEA: “because wind and hydropower delivered less energy in the first half of the year”.

The technologies that were supposed to replace fossil fuels fail exactly when they are needed. The first half of 2025 was characterized by calm winds and low water levels. The result: more coal burning. The replacement of base-load-capable power plants with weather-dependent energy sources means that fossil fuel backups have to be used in the event of a lull.

The Global Perspective

The figures in detail:

• China (56% of global consumption): demand stagnates at 4,953 million tons
• India: Consumption declines for the first time in decades due to intense monsoon season – temporarily
• USA: Increase of 37 million tonnes in absolute terms
• EU: Slowdown in decline due to lower wind and hydropower production

The IEA expects global demand to decline slightly to 2023 levels by 2030. However, with the note: “If China sees a faster-than-expected increase in electricity consumption or slower integration of renewables, global coal demand could be above forecasts.”

Coal’s share of electricity generation

Keisuke Sadamori, IEA Director of Energy Markets, admits: “In 2013, coal accounted for 41 percent of electricity generation, and in 2025 we expect it to be around 34 percent. This is the lowest value in the history of IEA statistics.” Sounds like success – if it weren’t for the absolute consumption record. Total electricity generation increased by about 7,000 TWh from 2013 to 2025. Coal is losing shares, but not absolutely.

Why electricity demand is exploding

Global electricity production reached around 27,000 TWh in 2024 and will rise to over 30,500 TWh by 2027 – an increase of 3,500 TWh in three years. This is equivalent to the annual addition of Japan’s total electricity demand. The IEA forecasts growth of just under four percent per year until 2027, well above the historical average of 2.6 percent (2015-2023).

The drivers of this growth are manifold:

Air conditioning: The demand for air conditioning systems is booming. In India, 14 million units were sold in 2024 – 27 percent more than in 2023. Air conditioning systems already account for 60 GW of peak load, although only 20 percent of households own an appliance at all. By 2030, cooling could account for a third of India’s peak load (140 GW). Each additional degree Celsius of average temperature increases the peak load by 7 GW – in 2027 it could be 11 GW per degree.

Data centers and AI: In the U.S., data center electricity demand will increase from 25 GW (2024) to over 80 GW (2030). Globally, data centers currently consume 500-650 TWh annually – by 2030, it will be 770 to 1,280 TWh, depending on the scenario. The AI revolution is the single biggest driver. The IEA expects data center consumption to double by 2030 in the USA, China and the EU alone.

Electrification of industry: In China, the production of solar panels, batteries and electric vehicles alone consumes 300 TWh per year – as much as the whole of Italy. These sectors accounted for about 35 percent of the growth in industrial electricity demand in 2022-2024. The industrial sector will continue to drive about 50 percent of China’s demand growth.

Electromobility: 17 million electric vehicles were sold in 2024 (+25 percent), electricity consumption in the transport sector increased by eight percent.

Emerging market growth: 85 percent of global electricity demand growth by 2027 will come from developing and emerging countries – 60 percent of which will come from China and India alone. China will reach the 10,000 TWh mark in annual consumption in 2025 and will thus be responsible for half of the global demand growth.

The IEA expects global electricity demand to exceed 29,000 TWh by 2026. The demand for electricity is thus growing twice as fast as the total energy demand. And this is exactly where the problem lies: This explosive growth has to be covered – depending on the weather or not.

The intermittency problem remains unsolved

This massive growth in demand reveals the basic problem: an energy system based on weather-dependent sources requires backup capacities. In Europe, reduced wind and water production in the first half of 2025 directly led to higher coal consumption. The consequence: CO₂ emissions are rising instead of falling.

For 2025, the IEA forecasts global electricity generation of 32,200 TWh for coal-fired power generation alone. Renewables are being expanded “in record numbers” and are expected to produce more than coal for the first time in 2025. Nevertheless, coal-fired power generation remains “largely stable” at 5,964 million tonnes, supported by “seasonal heating demand and system safety requirements, especially in Asia”. With every lull, the coal steps in.

India’s future

India will see the largest absolute increase by 2030: over 200 million tons of additional demand, an average of three percent per year. 14 gigawatts of new coal capacity will be connected to the grid in 2025. The IEA states: “Although renewables are growing rapidly, they alone cannot keep pace with the growth in electricity demand.”

Conclusion

8.85 billion tons of coal in 2025 – a new record despite the massive expansion of renewable energies. The IEA figures show that the energy transition in its current form does not replace fossil fuels, but makes us more dependent on them. Instead of providing reliable energy, it creates an unstable system that relies on coal when there is no wind.

Coal consumption is peaking not despite, but because of, inadequate backup strategies for volatile energy sources. Until a solution to the storage and base load problem is found, coal will remain – because it is needed when wind and water fail.

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The full IEA report “Coal 2025” can be found here. The related press release is available here. The data on electricity demand development come from the IEA reports Electricity 2025, Electricity Mid-Year Update 2025 and Global Energy Review 2025.