The newly released 2026 World Energy Transitions Outlook (WETO) report by the International Renewable Energy Agency (IRENA) calls for energy system reform to put the global energy transition back on a path consistent with the 1.5-degree target following the current temperature overshoot caused by carbon emissions.
While growth in renewable energy capacity set a record in 2025, grid upgrades have failed to keep pace. Energy demand, meanwhile, continues to rise rapidly. Furthermore, improvements in energy efficiency have fallen significantly short of what is needed and have not been sufficient to offset the growing demand for electricity.
To achieve one of the key expected outcomes of COP31—increasing the share of electricity in final energy consumption to 35% by 2035 and over 50% by 2050—global installed renewable power capacity must rise from 5.2 terawatts (TW) to approximately 38.2 TW by 2050. By mid-century, more than 80% of electricity must come from solar and wind.
In addition, if energy efficiency, grids, storage, and system flexibility are not scaled up, these critical building blocks risk becoming bottlenecks in the global energy transition.
WETO 2026 also points to a strong economic rationale. According to the report’s scenario based on limiting global warming to 1.5 degrees, the global economy will grow 1.1% more each year compared to current trends, resulting in cumulative gains of approximately $46 trillion for societies by 2050.
Employment in the renewable energy sector could increase more than fivefold over the same period, from just over 16 million today. As emerging electricity markets become more cost-competitive, end-user electricity prices could drop by 15% by 2050.
However, achieving this transition naturally requires a significant increase in investment. For a successful transition, cumulative annual investment must reach approximately $10.3 trillion between 2026 and 2050.
Emphasizing that the global energy transition is under serious pressure, IRENA Director-General Francesco La Camera stated, “Record growth in renewable energy alone is not enough. Energy efficiency is falling short of expectations, grids are struggling to keep up with this pace, and global energy demand continues to rise rapidly. “We cannot achieve the transition simply by adding renewable energy to an unchanged energy system. We need reforms to build the infrastructure for a new energy system that is electricity-based, efficient, flexible, and supported by renewable sources,” he said.
You can access the study here.
Date: 22 October 2026
