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The global energy transition needs more than record growth in renewable power. Electricity grids, energy storage and efficiency improvements must also expand to meet rising demand and reduce reliance on fossil fuels. The International Renewable Energy Agency (IRENA) highlighted these challenges in its World Energy Transitions Outlook 2026, released on Oct. 13.

The report calls for faster electrification using renewable energy, supported by modern infrastructure and more efficient technologies. It sets out a pathway to align the global energy system with the goal of limiting warming to 1.5 degrees Celsius above preindustrial levels.

Renewable Energy Growth Faces Infrastructure Challenges

IRENA estimates that global installed renewable power capacity must increase from 5.2 terawatts to about 38.2 terawatts by 2050. Electricity would need to account for 35% of final energy consumption by 2035 and more than half by 2050.

Solar and wind power would supply more than 80% of global electricity by mid-century under the report's pathway.

However, renewable capacity additions alone cannot deliver this change. Grid expansion, storage and flexible power systems must keep pace with new generation. Energy efficiency must also improve to manage growing demand.

IRENA Director-General Francesco La Camera said the transition requires a shift toward an electrified, efficient and flexible energy system powered by renewables.

Economic Benefits Depend On Investment

The report estimates that following its 1.5-degree pathway could increase annual economic growth by 1.1% above a business-as-usual scenario. It projects cumulative economic gains of about $46 trillion by 2050.

Renewable energy employment could also rise more than fivefold from just over 16 million jobs today. More competitive electricity markets could reduce end-user power prices by 15% by 2050, according to IRENA's projections.

These outcomes would require substantial financing. The agency estimates cumulative investment needs of about $10.3 trillion annually over 2026-2050 across renewable power, electricity networks, system flexibility and electrification.

Governments Face A Critical Implementation Task

IRENA calls for integrated energy planning, stronger investment frameworks, modern grids, country-specific roadmaps and international cooperation. It also stresses social protection and fair access to jobs and economic opportunities.

The report's central message is that the pace of renewable deployment must match improvements in infrastructure, efficiency and affordability. Governments will need to balance emissions reductions with energy security and reliable supplies as demand continues to grow.

The scale and timing of investment will influence how effectively countries can turn renewable energy expansion into a broader transformation of their energy systems.