Renewable Energy Surpasses Coal Globally, Exposing Structural Challenge in Energy Storage and Grid Infrastructure

Strategic Insights -

As renewable energy generation capacity expands rapidly worldwide, a historic milestone has been achieved with renewable energy surpassing coal globally in the first half of 2025, according to the International Energy Agency (IEA). However, this achievement has also exposed an underlying structural challenge: while renewable generation capacity is growing, the infrastructure required to store, transmit, and balance this energy is not keeping pace. As a result, negative pricing and curtailment incidents have become increasingly common, particularly during periods of high solar or wind generation.

Key Takeaways:

  • Renewable energy generation surpassed coal globally in the first half of 2025, marking a historic milestone in the fight against climate change.
  • Battery storage technologies are indispensable components of a decarbonized energy system, enabling renewable energy to function as a dispatchable resource rather than an intermittent one.
  • Global investment in energy storage is accelerating, supported by policy mechanisms such as capacity markets, ancillary service payments, and green financing instruments.
  • The European Union, the United States, and major Asian economies are already integrating storage targets into their national energy strategies.
  • The Energy Market Regulatory Authority (EMRA) in Türkiye introduced a regulatory framework allowing co-located battery storage facilities alongside renewable generation plants, enabling renewable producers to integrate storage systems directly into their existing or planned facilities.
  • Over 20,000 MW of storage-linked project applications were submitted to EMRA within months of the regulation's enactment, reflecting both the private sector's readiness and the scale of unmet demand for grid flexibility.
  • Strategic investment in infrastructure, including substation expansion, grid automation, and smart metering, will be essential to ensure that renewable and storage projects can deliver their full economic and environmental benefits.
  • Regulatory clarity and stability, financing mechanisms, and grid modernization are critical to support long-term investment decisions and ensure a coordinated national approach involves regulatory stability, financing mechanisms, and grid modernization.

Statistics:

  • Renewable energy generation surpassed coal globally in the first half of 2025.
  • Battery storage capacity is expected to reach 1.2 GWh by 2027, with an additional 4.6 GWh of capacity in development globally.
  • The global energy storage market is projected to reach $33.7 billion by 2027, growing at a CAGR of 18.1% from 2020 to 2027.
  • The European Union has already committed to integrating storage targets into its national energy strategies, with a goal of having 35 GW of storage capacity by 2025.
  • Over 20,000 MW of storage-linked project applications were submitted to EMRA within months of the regulation's enactment in Türkiye.

Sources:

  • International Energy Agency (IEA)
  • Energy Market Regulatory Authority (EMRA)
  • Mondaq Ltd