The International Renewable Energy Agency (IRENA) says the global energy transition needs faster and more coordinated implementation, despite continued growth in renewable energy deployment, falling technology costs and increasing electrification across transport, buildings and industry.
In its World Energy Transition Outlook 2026, IRENA identifies the expansion of renewable power, electrification, energy efficiency, electricity grids, storage and system flexibility as key requirements for aligning the global energy system with a 1.5°C climate pathway.
The report also highlights the need to maintain energy security and affordability while accounting for differences in countries’ economic conditions, energy resources and development priorities.
Electricity and Renewable Capacity Targets
Under IRENA’s revised 1.5°C Scenario, electricity would increase from around 23% of global final energy consumption today to 35% by 2035 and more than 50% by 2050.
Achieving this pathway would require global renewable power capacity to reach approximately 18.4 terawatts (TW) by 2035 and 38.2 TW by 2050.
Electrification would extend across several major sectors. By 2050, electricity would account for approximately 77% of final energy consumption in buildings, 47% in transport and 42% in industry.
IRENA’s scenario also includes sustainable bioenergy, renewable hydrogen and other sustainable fuels to complement direct electrification in applications where replacing existing energy sources is more difficult.
The projected expansion of renewable generation would need to be accompanied by investment in electricity networks, energy storage and flexibility measures to manage changing supply and demand.
Investment Requirements Through 2050
IRENA estimates that the transition pathway would require more than USD 256 trillion in cumulative investment and expenditure between 2026 and 2050, equivalent to an average of approximately USD 10.3 trillion annually.
The investment requirement reflects the scale of the proposed transformation across energy generation, infrastructure and end-use technologies. The report presents coordinated planning as a central consideration for ensuring that new renewable capacity is supported by the networks and storage needed to integrate it into energy systems.
Regional Pathways Reflect Different Priorities
The report does not prescribe a single transition pathway for every country or region. Instead, it recognises that energy systems start from different positions and face different resource constraints, infrastructure requirements and development needs.
Under the revised 1.5°C Scenario, electricity would account for around 64% of final energy consumption in the European Union by 2050. The corresponding projections are approximately 53% for the Association of Southeast Asian Nations (ASEAN) and close to 50% for both Africa and Latin America and the Caribbean.
These differences reflect regional circumstances and the role of electricity alongside other energy sources in meeting future demand.
IRENA identifies integrated national and regional planning as a way to translate global climate objectives into strategies suited to local conditions.
Economic Gains and Affordability
The Outlook also examines the potential economic effects of following a pathway consistent with limiting global warming to 1.5°C.
According to IRENA, this scenario could raise average global gross domestic product by approximately 1.1% relative to current plans, producing an estimated USD 47 trillion in cumulative economic gains by 2050.
The agency also stresses that these potential gains would depend on how the transition is implemented. Affordability, social protection, workforce skills and equitable access to emerging economic opportunities would need to be incorporated into policies and investment decisions.
The report therefore places social and economic considerations alongside deployment targets, arguing that the pace of the transition must be accompanied by measures that address its effects on households, workers and businesses.
Coordinated Implementation Remains a Key Challenge
IRENA’s assessment identifies implementation as a central challenge for the next phase of the energy transition. Renewable capacity growth alone would not deliver the projected pathway without parallel development of grids, storage, electrification and energy efficiency.
The agency’s scenario sets out a global direction while allowing for different regional approaches. Delivering the projected outcomes would require governments, energy companies and other stakeholders to coordinate infrastructure investment, technology deployment and policies suited to national and regional circumstances.
