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Global Fossil Power Generation Falls as Renewables Grow, Easing Some Hormuz-Related Strain

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Total global power generation from fossil fuels fell slightly in the first month of the Hormuz Strait closure, compared with March 2025, the Center for Research on Energy and Clean Air said on Tuesday.

While countries nonetheless are grappling with what has been branded the most severe energy shock in history, displacement of some fossil fuel use versus a year ago looks to have eased a little of the pressure building now for available gas supplies.

The CREA reached these conclusions based on a dataset that covers 87% of the global coal-fired power generation and more than 60% of gas-fired power generation.

Overall, fossil-fuel-based power generation in March was 1% lower than in the same month last year, with gas-fired generation down 4% and coal-fired generation unchanged.

Seaborne coal volumes fell 3% in the month, down to their lowest since 2021, which the CREA suggested contradicts the view that coal-fired power generation would rise as a result of the crisis.

It said that solar and wind installations reached a record level in 2025, trimming demand for fossil-fuel-based power generation.

Excluding China and looking at countries with real-time electricity data, coal-fired power generation fell 3.5%, the CREA said. At the same time, solar power output in those countries grew 14% and wind 8%.

There was also an uptick in hydropower generation of 2% but a simultaneous and larger drop in nuclear power generation.

China increased power generation from coal by 2% in March, an expected trend given its vast coal-powered generation fleet and domestic coal resources. Nonetheless, March 2026 coal-powered generation was 6% lower than the 2024 level, the CREA noted.

Overall there was an unspecified year-on-year growth in electricity generation in March, underscoring the fact that the impact of the Iran conflict relates more to transport, with governments focusing mitigation efforts on cutting fuel taxes and reducing the need to travel.

Interestingly, the CREA noted that the additions of solar and wind capacity that took place in 2025, generate twice as much electricity as all of the LNG flowing through the Hormuz Strait before the crisis.

Power demand is generally growing rapidly however, with electrification of transport and the deployment of data centers seen as major sources of demand growth in the years ahead, leading to long wait-times for turbine deliveries for new gas-fired power generation facilities.

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