Energy Update #1: the 2025 electricity review

Energy Updates by Energia Corrente × eNextGen — the data, trends and news that really matter to understand the world of energy.

2025 is a pivotal year for the European power system. According to Ember data published in the European Electricity Review 2026, solar recorded the most significant growth in European Union generation, up 20% compared to 2024. Over the same period, ACEA data shows that 27% of cars registered in the EU in 2025 have an electric plug, a share equivalent to that of petrol-only vehicles: it is the first time this has happened.

The European picture: a historic threshold

In 2025, solar and wind together overtook fossil fuels in European Union power generation for the first time. It is a threshold that is both symbolic and structural: it marks the entry of the energy transition into a phase of maturity.

Ember data on year-on-year generation changes paints a clear picture:

• solar: +62 TWh
• gas: +34 TWh
• coal: -14 TWh
• hydro: -43 TWh
• nuclear: +3 TWh

Solar emerges as the most dynamic technology in the European mix, with an average annual growth rate of 21% over the past five years. In theory, this pace of development would be compatible with full decarbonization of the European power sector within ten years. An outcome of that scale, however, would require major investment in grids and storage systems, which are indispensable to manage such a high share of solar generation.

Installation data tracked by Solar Europe nonetheless points to difficulties in sustaining that pace. In 2025, for the first time in ten years, new solar installations in the EU did not grow, and it may take until 2029 to return to the 65 GW installed that year.

The electricity generated will increasingly power the mobility sector. In 2025, according to ACEA data, slightly more than one in four new cars is plug-in hybrid or fully electric, reaching a share equivalent to that of petrol-only vehicles. Diesel remains stable at 9% of registrations, while hybrid vehicles with a small, non-rechargeable battery account for 35% of the total.

A picture that goes beyond Europe

The European trend fits into a consistent global context. The International Energy Agency expects renewables to overtake coal as the world’s leading source of electricity by 2026, driven by solar PV and wind. Electric cars, thanks in particular to China’s role, also account for one in four new vehicles globally. In this sense, Europe is anticipating a trajectory that is becoming structural worldwide.

From generation to system

The most relevant aspect of the 2025 review is not only how much new renewable energy was generated, but how the power system is transforming to integrate it.

Solar growth raises specific challenges: managing variability, grid integration, system flexibility and the role of storage. The transition thus enters a systemic phase: no longer just technological expansion, but the design of the power system’s architecture.

Electrochemical storage, today dominated by lithium batteries, is taking on a central role in investment plans. According to Benchmark Mineral Intelligence, around 315 GWh were installed across battery energy storage markets, both grid-scale and residential, with growth of almost 50% year on year. Forecasts for 2026 point to another strong expansion, with over 450 GWh of new capacity ready to come online, and several European markets are scaling up their storage plans.

The Italian case: solar and storage as a strategic lever

Within the European context, Italy occupies a particular position. Solar is the fastest-growing technology in terms of new installed capacity, with photovoltaic generation in 2025 running 24% higher than the previous year. That figure, however, also reflects a slower start compared to other European countries.

The transition to electric cars is even slower: according to ACEA data, only 6% of 2025 registrations are fully electric, while half of European countries record shares above 18%.

Italy’s distinctive feature is the development of storage. The country exceeds the 5 GWh threshold of projects expected in 2026, confirming its role as a strategic market for storage growth. According to Ember, it is among the European leaders in utility-scale battery capacity, with around 1.9 GW already operational and a pipeline above 10 GW. This makes Italy one of the most interesting laboratories for the new phase of the transition: the one in which renewables can be supported in their growth by storage, becoming the backbone infrastructure of the system.

In short

The energy crisis that swept across the European continent helped accelerate solar installations. Today that crisis no longer seems to be perceived by the market with the same urgency, and the result is a slowdown in solar installations accompanied by parallel growth in storage, another fast-expanding market alongside electric vehicles, the natural protagonists of the next cycle of the energy transition.

These stages, at different times and with different intensity, characterize the transformation of the global power system, from Australia to California, from China to the African continent. New geopolitical challenges will play a role in the 2026 energy transition, but one element appears certain: the transition is less and less about emergency response and more and more structural.

Sources: Ember – European Electricity Review 2026; ACEA – European Automobile Manufacturers’ Association; International Energy Agency – Renewables 2025; Solar Europe – EU Solar Market Outlook 2025-2030; Benchmark Mineral Intelligence.

Nicolò Golinucci PhD is co-founder and CEO of eNextGen, an official spin-off of Politecnico di Milano that quantifies sustainability and turns it into a competitive advantage for companies.