The energy institute statistical review 2026: the story lies beyond electricity

The publication of the Energy Institute’s Statistical Review of World Energy 2026 has produced widely differing interpretations. Some commentators argue that it demonstrates the energy transition is accelerating rapidly. Others claim it shows that the transition is failing because fossil fuels continue to dominate. Both conclusions are based on the same data. The difference lies in what part of the energy system people choose to look at. Much of the commentary focuses almost exclusively on electricity. That is understandable. Electricity is where renewable energy has achieved its greatest success. Solar power continues to expand at record rates, battery storage is growing rapidly, and renewable electricity is transforming power systems around the world. But electricity is only one part of a much larger energy system. The real message of the Statistical Review becomes apparent only when electricity is viewed alongside the broader energy mix. Energy Component 2020 2025 Change (percentage points) Electricity* 17.1 per cent 19.3 per cent +2.2 Oil 33.6 per cent 33.5 per cent -0.1 Natural gas 25.6 per cent 25.1 per cent -0.5 Coal 28.3 per cent 27.7 per cent -0.6 Total fossil fuels 87.5 per cent 86.3 per cent -1.2 Renewables (wind, solar, biomass, geothermal) 3.9 per cent 5.9 per cent +2.0 Hydro 2.8 per cent 2.7 per cent -0.1 Nuclear 5.8 per cent 5.2 per cent -0.6 Total low-carbon energy 12.5 per cent 13.7 per cent +1.2 Electricity expressed as annual electricity is shown as a percentage of Total Energy Supply. It is shown separately because electricity is an energy carrier rather than a primary energy source. Three observations immediately emerge. The first is encouraging. Electricity is becoming increasingly important. Over just five years, electricity increased from about 17 per cent to more than 19 per cent of the global energy system. This reflects the continuing electrification of transport, buildings and industry, together with growing demand from digital technologies, artificial intelligence and cooling. The second is equally positive. Renewable energy continues to expand at an extraordinary pace. Its share of global energy supply increased by two percentage points in only five years—from 3.9 per cent to 5.9 per cent. Few energy technologies have ever achieved this rate of global expansion over such a large installed base. Yet the third observation is the one that many discussions overlook. Despite record renewable deployment, fossil fuels still accounted for more than 86 per cent of global energy in 2025, only modestly lower than five years earlier. This is not a contradiction. Nor does it suggest that renewable energy has failed. It reflects a much simpler reality: global energy demand continues to grow and to provide it all energy components are growing in absolute terms -including fossil fuels. As economies develop, populations expand and living standards improve, the world requires more energy every year, growing by 1.4 per cent per year -including last year. Artificial intelligence and data centres are adding to electricity demand, but they are only part of the picture. Electrification, industrial production and growing demand for cooling are also increasing energy consumption, while transport, aviation, shipping and heavy industry remain heavily dependent on fossil fuels. Consequently, much of the additional renewable energy is meeting new demand before it can displace existing fossil fuel consumption. This is perhaps the most important conclusion emerging from this year’s Statistical Review. The global energy transition is no longer simply a process of replacing fossil fuels with renewables. Instead, it has become a process of expanding total energy supply while gradually changing its composition. The world is experiencing energy addition before energy transition. Renewables are growing rapidly. Electricity is becoming more important. But because total energy demand continues to rise, fossil fuels remain the dominant source of energy even as their share slowly declines. Renewables are expanding rapidly, but so is total energy demand. Until low-carbon energy grows faster than demand itself, fossil fuel consumption can continue increasing even while renewable deployment reaches record levels. This explains what many see as contradictory findings in the Statistical Review. The report also illustrates another important change: Energy security has become just as important as decarbonisation. Only a few years ago, energy policy was dominated by climate objectives. Following the disruption of Russian gas supplies to Europe and continuing geopolitical instability in the Middle East, governments have increasingly recognised that affordability, resilience and security of supply are equally important. Renewables are no longer viewed simply as instruments of decarbonisation. They are also increasingly seen as strategic assets that reduce dependence on imported fuels and improve national energy security. The energy transition is therefore being driven by a broader set of objectives than climate policy alone. Perhaps the greatest misunderstanding surrounding the Statistical Review is that commentators often treat electricity as though it represents the entire energy system. It does not. Electricity is where the transition is progressing fastest, but it still represents less than one-fifth of global energy. The remaining four-fifths continue to rely predominantly on oil, natural gas and coal. That distinction explains why two apparently conflicting statements can both be true: Renewable electricity is expanding rapidly. At the same time, fossil fuels continue to dominate global energy. The 2026 Statistical Review therefore does not tell us that the energy transition is failing. Neither does it suggest that the transition is unfolding exactly as many expected a decade ago. Instead, it shows that the transition has entered a more complex phase in which renewable energy, electrification and fossil fuels are all growing simultaneously, although at different rates. The direction of travel is clear. The pace of change, however, is being determined not only by technology, but also by the continuing growth of global energy demand. That is the real story behind this year’s Statistical Review. Charles Ellinas is Councilor of the Atlantic Council. The article is republished from the blog of the Cyprus Economic Society.