A 2025 Record That May Not Last

Global renewable generation capacity reached 5,149 GW at end-2025, up 15.5% on 692 GW added in a year. Solar accounts for roughly 511 GW and wind 159 GW. Yet IRENA Director-General Francesco La Camera foresees the first annual decline in installations after five years of growth. He gives no figure for the drop, and it must be noted upfront: this is an assessment, not a tally.

The reason cited is neither technology costs nor investor appetite, but the gap between building capacity and developing the infrastructure that carries electricity. When lines, connections or flexibility are lacking, part of the potential output is curtailed: it simply is not injected. IRENA flags these constraints in China, Australia and Japan.

China, the Tipping Point for the Global Trajectory

The diagnosis weighs all the more heavily given that Asia accounted for 74.2% of 2025 additions, and China installed 119.4 GW of wind, nearly three-quarters of the global total. Francesco La Camera considers it unlikely that acceleration elsewhere will offset a Chinese slowdown. If Chinese grids become the limiting factor, the global average sags.

The tension comes as targets rise. The 11.2 TW goal for 2030 is coming closer, but it was set on overly cautious demand projections. Electricity consumption surged more than expected, driven by heating, air conditioning and the AI boom. In the agency's revised 1.5°C scenario, electricity's share of final consumption would rise from about 23% to 35% by 2035, with nearly 18.4 TW of renewable capacity. IRENA adds that 2026-2030 must see more capacity built than in all previous years combined. Yet the grid, according to its head, has not kept pace with deployment.

Same Bottleneck, Different Industry: Heavy Equipment

The phenomenon is not confined to renewables. It shows up among the electrical equipment suppliers that power data centers. According to Wood Mackenzie estimates, US transformer supply is about 15% short of needs this year, and lead times reach up to 26 months at some manufacturers.

Order books reflect that scarcity. GE Vernova reported a backlog of ? billion at the end of the second quarter, nearly four times expected revenue this year. Its customers have committed 116 GW of equipment and production slots, including 63 GW of mere reservations. At a pace of about 20 GW a year, that represents nearly six years of output. The company targets 30 GW in 2030, illustrating how slowly machine supply builds up.

Quanta Services, long a pure installer, has set up a joint venture with Hyosung HICO to make high-voltage circuit breakers in Pennsylvania: a contractor internalizing manufacturing for lack of sufficiently fast suppliers. Its revenue rose 41% to ?.56 billion and its backlog hit a record ?.4 billion. At Powell Industries, quarterly orders reached ? million against ? million in sales: the ?.4 billion backlog equals nearly two years of activity, and the challenge is now manufacturing speed.

When the Plant Becomes the Problem

The Fluence Energy example shows the lock can also sit in industrial execution. Its Houston plant was supposed to produce an average of 11 battery units per day in August and September, but delivered fewer than one in August. The company cut its revenue forecast from ?.2-3.6 billion to about ?.4 billion. Here it is not the grid that blocks, but the ability to produce what has been sold. The result is the same: solvent demand left waiting.

Prices That Tell of a Fragmented System

Market data for October 23, 2026 offer a clue, to be handled with caution. Day-ahead prices ranged from 23.07 EUR/MWh in Finland and 33.90 in Denmark (DK-1) to 124.90 in Czechia, 157.93 in Portugal and 227.27 in Switzerland. Such a spread, nearly one to ten, is consistent with a system where abundant electricity does not flow freely to deficit areas. It does not prove it: a single day cannot isolate congestion from other factors such as weather, the mix or hydrology.

The Limits of the Demonstration

Several caveats are in order. IRENA provides no quantified forecast for 2026, and installed capacity says nothing about electricity actually produced. No curtailment volumes are available in the data. On data centers, markets are doubtful: companies in the sector have lost a median 23% since October 6, while the big tech firms financing these projects were down only about 5%. If AI investment normalized, pressure on equipment makers could ease. Finally, part of the order books, notably at GE Vernova, rests on reservations rather than firm orders. Gas flow data for October 24 are too patchy to inform this debate.

What Can Reasonably Be Concluded

The facts converge on one finding: the pace of electricity growth increasingly depends on infrastructure — lines, connections, transformers or turbines — more than on raw generation. For utilities and policymakers, the question goes beyond financing new panels or wind farms: it concerns connection speed, grid reinforcement and the industrial capacity to supply equipment. Final 2026 figures will show whether the inflection announced by IRENA is confirmed, and how large it is.

This article was written with the assistance of artificial intelligence and verified by our editorial team.