BloombergNEF Projects Solar to Overtake Coal as World's Largest Power Source by 2035
A decade-out forecast puts solar at the top of the global generation stack, but AI data centre demand may ensure gas and coal remain indispensable for firm capacity.
Solar power will surpass coal as the world's largest electricity source by 2035, according to BloombergNEF, with panel prices forecast to fall another 30% this decade as the technology further undercuts fossil fuel economics across every major power market.2
Coal still supplies roughly 35% of global electricity, with approximately 2,100 GW of capacity operating worldwide as of 2024. Displacing even a portion of that base would reshape dispatch economics, carbon pricing trajectories, and coal-to-gas switching dynamics across multiple continental power systems.1
The forecast carries a complication, however. BloombergNEF expects fossil fuels to account for 51% of the incremental generation required to supply AI data centres through 2050, because gas and coal can operate continuously in ways that variable solar cannot without long-duration storage. Google recently committed $1 billion to 100-hour batteries from Form Energy for a data centre project, an early signal that storage economics are advancing, but one transaction short of evidence that intermittency gaps can be commercially bridged at scale.2
The U.S. Energy Information Administration's Annual Energy Outlook 2026 projects server consumption alone will reach between 446 billion and 818 billion kilowatt-hours annually by 2050, up from an estimated 7% of commercial electricity use in 2025. The International Energy Agency estimates AI and data centres will account for roughly 4% of global electricity demand by 2030. Both projections point to a demand overhang that storage systems cannot yet bridge at prevailing costs.3,5
China's role in this transition is structurally distinct from every other major economy. The country has deployed solar at rates matching or surpassing the rest of the world combined, according to an Economist analysis published in May (2026-05-19), using panel exports and technical assistance to extend influence and secure resource access. That manufacturing concentration gives Beijing direct leverage over the global cost curve. The 30% price reduction BloombergNEF projects by 2035 is substantially a function of Chinese production economics running through to the export price.4,2
Investment flows reflect where capital is moving. The IEA estimates renewable energy will attract $2.2 trillion in global investment in 2026, more than double the total directed at fossil fuels, accounting for over 40% of an estimated $3.3 trillion in total energy sector spending that year.5
The harder question for markets is the pace of coal retirement rather than solar additions. With over 2,000 GW of coal capacity operational, the gap between forecast solar leadership and actual emissions displacement depends heavily on decisions in developing Asia, where new coal construction has continued even as retirements accelerate in the United States and Europe. BloombergNEF's 2035 projection does not require coal capacity to be retired — only that solar generates more aggregate electricity.1
Newcastle physical coal traded at $126.05 a tonne on Tuesday (2026-06-23), a level that still supports the economics of existing plants in price-sensitive emerging markets. Retirement decisions in those markets respond to tariff structures and bilateral financing conditions as much as to the solar cost curve.1
Whether long-duration storage can shift the data centre equation before 2050 determines whether solar's rise amounts to actual decarbonisation or mainly headline capacity. Form Energy's 100-hour battery represents one commercial approach. But the IEA's 4% data centre figure for 2030 suggests the demand overhang accumulates faster than storage deployment can absorb it. If fossil fuels take the residual load through the transition decade, solar's generation leadership by 2035 will coexist with continued high absolute emissions from power systems in developing markets.2,5