BNEF Sees Solar Overtaking Coal by 2032 as Data Centers Keep Fossil Fuels in Play
BloombergNEF's May forecast puts solar ahead of coal within a decade, but round-the-clock data center demand keeps gas and coal supplying half of incremental load.
BloombergNEF expects solar to become the world's largest source of electricity within the next decade, surpassing coal, oil and natural gas, according to a report the firm published in May (2026-05-19).3 The projection sets solar against an incumbent that still dominates the grid.
Coal supplies roughly 35% of global electricity, and more than 2,000 GW of coal capacity remains operational worldwide, even as renewables have become cheaper than coal in most markets.2 Displacing that base is slow work, which is why the timing in the BloombergNEF call is aggressive relative to how much thermal capacity is still turning.
Demand is the complicating force. The International Energy Agency's Electricity 2026 report put global power demand growth at more than 3% per year on average for the rest of this decade, driven partly by AI data centers and industrial electrification.1 The IEA forecasts renewable output growing by about 1,000 TWh annually through 2030, with solar photovoltaics alone accounting for over 600 TWh of that.1
Cost is what carries the forecast. BloombergNEF expects solar module prices to fall another 30% by 2035, undercutting coal and natural gas without subsidy.3 But the same report keeps a role for fossil fuels: because gas and coal plants can run around the clock, BloombergNEF sees them providing 51% of incremental generation for data centers by 2050.3 Solar wins the grid mix while fossil fuels serve the most demanding baseload customer.
China explains most of the momentum. The country has installed 680 GW of solar capacity, against Britain's entire generating fleet of roughly 100 GW.4 Chinese solar is now "too big to fail," The Economist reported in May (2026-05-19), describing factories in Chengdu running almost entirely on robots turning out polysilicon at a scale no rival can match.4 That build-out fed a milestone: coal generation fell in both China and India in 2025, the first simultaneous drop in 52 years, with Indian coal output down 3.0% year-on-year, according to Carbon Brief.6
India remains the counterweight. It draws almost three-quarters of its electricity from coal and has 39 new coal-fired plants under construction.5 Prime Minister Modi has paired that with two 2030 targets: cutting emissions by a billion tonnes from their current trajectory and more than doubling non-fossil generation, including nuclear and hydro alongside wind and solar.5 The coal build and the clean-energy push are running at once, and the seaborne thermal market sits between them.
For traders, the near-term signal is coal's floor rather than its ceiling. Newcastle physical coal last traded at $117.35 on Monday (2026-07-13), supported by demand from India and Southeast Asia even as wealthy economies retire capacity.2 Retirements in the developed world are being partly offset by new ultra-supercritical plants in developing economies, which reach efficiencies of 43-47%.2 The pace of those retirements will set when the seaborne market tightens.
Storage is the variable that could pull the fossil-fuel role forward. Google recently included $1 billion of 100-hour batteries from Form Energy in a data center project, a bet on long-duration storage covering the loads that gas and coal now serve.3 If long-duration storage costs fall as fast as solar modules have, the split BloombergNEF drew for mid-century — solar on the grid, fossil fuels behind the data center meter — could compress well before 2050.3 For now, the trade is straightforward: solar takes share in the generation mix while Newcastle coal holds its bid on Asian demand.