The global energy transition could stall unless governments urgently upgrade power grids, expand energy storage, and improve energy efficiency to keep pace with rising electricity demand, the International Renewable Energy Agency (IRENA) warned on Tuesday.
The 2026 World Energy Transition Outlook (WETO) released by the International Renewable Energy Agency (IRENA) on Tuesday sets out urgent energy system reforms to realign the global energy transition with the 1.5°C-compatible pathway following the current overshoot of temperature caused by carbon emissions.
Despite record additions to renewable energy capacity in 2025, grid infrastructure has failed to keep pace, while energy efficiency improvements remain well below the required rate, according to the report.
“The global energy transition is under stress. Record growth in renewables is not enough on its own: energy efficiency is falling short, grids are struggling to keep pace, and global energy demand continues to surge,” IRENA Director-General Francesco La Camera said in a press release.
“We cannot deliver the transition by simply adding renewables to an unchanged energy system,” he said, stressing the need for an electrified, efficient, and flexible energy system powered by renewables.
The report said global installed renewable power capacity needs to increase from 5.2 terawatts (TW) currently to around 38.2 TW by 2050 to align the transition with the 1.5°C pathway.
Electricity’s share of final energy consumption would need to rise to 35 percent by 2035 and exceed 50 percent by 2050, while solar and wind would have to supply more than 80 percent of global electricity by mid-century.
However, insufficient investment in grids, storage, system flexibility, and energy efficiency could turn these critical components into major bottlenecks, the report warned.
La Camera said electrification, grids, storage, flexibility, and energy efficiency were the backbone of the transition, adding that their coordinated deployment was essential to ensure energy security, affordability, and competitiveness.
The report also highlighted the economic gains from an accelerated transition. Under IRENA’s 1.5°C scenario, the global economy could generate around US$46 trillion in cumulative gains by 2050 compared with business as usual.
Renewable energy employment could increase more than fivefold from just over 16 million jobs currently, while more competitive electricity systems could reduce end-user power prices by 15 percent by 2050.
Achieving these gains would require around US$10.3 trillion in cumulative investment over 2026–2050, mainly in renewable power, grids, system flexibility, and electrification.
“The quality of the transition will matter as much as its speed,” La Camera said, stressing that affordability, social protection, and fair access to economic opportunities must be built into implementation to ensure the benefits are widely shared.
The report outlined seven priorities for action over the coming decade, including integrated energy and market planning, country-specific roadmaps, grid modernisation, stronger industrial and investment strategies, social and environmental policies, and deeper international cooperation.
It said governments must manage the transition in an orderly manner to maintain reliable and affordable energy supplies while accelerating the shift away from fossil fuels.