China and India both recorded declines in fossil fuel electricity generation during 2025 as solar and wind output rose sharply, contributing to a global shift in which renewables overtook coal in the global electricity mix. According to a new Ember report, China's fossil fuel generation fell 0.9 per cent or 56 terawatt hours, while India's fell 3.3 per cent or 52 terawatt hours, against a backdrop of solar growth of 40 per cent in China and renewable growth of 24 per cent in India. The shift matters because China and India together represent the world's two largest sources of new electricity demand, and their movement away from fossil fuel growth has implications for the global carbon trajectory that extend well beyond either country individually.

 

The Headline Numbers Behind the Global Shift

 

Renewable energy accounted for 33.8 per cent of global electricity generation in 2025, surpassing coal at 33.0 per cent. This crossover is one of the most significant data points for the global energy transition, marking the first time that renewables have generated a larger share of global electricity than coal. Global coal generation fell by 63 terawatt hours during 2025, the first annual decline since 2020, while solar and wind together met 99 per cent of global electricity demand growth.

The Ember report frames this shift as the result of structural changes in how new electricity demand is being met across emerging markets. Rather than being supplied through additional fossil fuel capacity, demand growth is increasingly being absorbed by new solar and wind capacity. This represents a fundamental change in the relationship between economic growth and emissions, particularly in countries that have historically been expected to drive significant new fossil fuel demand for decades to come.

 

The China Story Within the Data

 

In China, solar generation rose by 336 terawatt hours during 2025, an increase of 40 per cent year on year. Solar alone met approximately two thirds of the country's new electricity demand. Despite a 0.9 per cent decline in fossil fuel generation, fossil fuels still accounted for 58 per cent of China's electricity mix in 2025, reflecting both the scale of the existing fossil fuel base and the magnitude of the build out still required to fully transition the system.

The Chinese transition is particularly significant because of the country's central role in both global emissions and global renewable energy manufacturing. China is the largest installer of solar capacity globally and dominates the manufacturing of solar panels, batteries and electric vehicles. The combination of declining fossil fuel generation and rapidly expanding renewable capacity domestically reinforces the economic logic of continued investment in clean energy manufacturing, since rising domestic deployment supports the production scale that drives down costs across global markets.

 

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The India Story Within the Data

 

India's 3.3 per cent decline in fossil fuel generation during 2025 represents a more modest absolute reduction than China's, but it occurs against a much faster underlying demand growth profile. Renewable generation in India rose by 24 per cent or 98 terawatt hours during the year. Fossil fuels still accounted for 73 per cent of India's electricity mix in 2025, indicating that the country has further to travel in its energy transition than several other major economies.

The Indian shift is significant because the country has often been treated as the next major source of fossil fuel demand growth in long term energy forecasts. The 2025 data suggests that renewable deployment is now scaling fast enough to absorb a significant share of incremental demand, even though absolute fossil fuel generation remains very high. As India continues to grow its solar and wind capacity, the country's emissions trajectory could diverge meaningfully from earlier forecasts that assumed sustained fossil fuel growth.

 

The OECD Comparison Provides Long Term Context

 

The Organisation for Economic Co-operation and Development recorded a 19 per cent decline in fossil fuel generation from its 2007 peak, with the source accounting for 48 per cent of electricity generation in 2025. This is below the global average of 57 per cent. All 38 OECD members recorded fossil generation below peak levels in 2025, indicating that the structural shift away from fossil fuel power is now broad based across the developed economies.

Wind and solar generation in OECD countries rose by 2,138 terawatt hours from 2007 to 2025, offsetting declines in fossil fuel output and meeting demand growth. Power sector emissions in OECD countries fell by 28 per cent over the same period. The OECD pattern provides a longer term reference point for what is now beginning to occur in the major emerging markets, where renewable deployment is starting to deliver similar shifts in electricity supply composition over a much shorter timeframe.

 

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The Economic Logic Behind the Transition

 

The economic case for the transition has strengthened significantly in recent years. According to the Ember report, the average levelised cost of energy for solar in 2025 stood at 39 dollars per megawatt hour and for onshore wind at 40 dollars per megawatt hour. This compares with 102 dollars per megawatt hour for combined cycle gas turbines. Renewable energy is now substantially cheaper than gas fired generation, which has reshaped the commercial logic of new power capacity additions across most major markets.

The cost advantage of renewables is particularly important because it removes one of the central arguments that has historically slowed the transition in emerging markets. When renewable energy was more expensive than fossil fuel alternatives, the case for accelerated deployment relied on environmental rationale, policy support or long term cost projections. With renewables now cheaper than gas in most markets, the economic case is independent of policy or environmental considerations, which strengthens the structural drivers of the transition.

 

What the Crossover Signals for the Energy Transition

 

The crossover of renewables ahead of coal in global generation is one of the most important data points in the energy transition narrative. While coal continues to be the largest single fossil fuel source of electricity, its share is now in structural decline as new capacity additions are dominated by renewables. The 99 per cent of demand growth captured by solar and wind in 2025 indicates that the transition has reached a point where renewable energy is no longer adding to the system alongside fossil fuels but is increasingly displacing them.

For institutional investors monitoring the energy transition, the data reinforces the structural case for continued capital allocation toward renewable energy and supporting infrastructure including grids, storage and electrification of demand. For policy makers, the data confirms that emissions trajectories are beginning to bend in the right direction even in countries that have historically been expected to drive most of the world's emissions growth. For the broader sustainability conversation, the year 2025 may come to be remembered as a structural inflection point in the global power system, with implications that extend far beyond the specific numbers in any single annual report.