Fossil Fuel Electricity Market Report 2026

The fossil fuel electricity market size has grown steadily in recent years. It will grow from $1.1 trillion in 2025 to $1.14 trillion in 2026 at a compound annual growth rate (CAGR) of 3.8%. The growth in the historic period can be attributed to reliance on established fossil fuel infrastructure, abundant coal and natural gas reserves, low initial cost of fossil fuel plants, high reliability and baseload capability, government subsidies for fossil fuel energy.

The fossil fuel electricity market size is expected to see steady growth in the next few years. It will grow to $1.37 trillion in 2030 at a compound annual growth rate (CAGR) of 4.8%. The growth in the forecast period can be attributed to implementation of carbon capture and storage (ccs) technologies, stricter emission regulations, integration with renewable energy sources, demand for grid stability and baseload power, adoption of advanced automation and digital control systems. Major trends in the forecast period include adoption of advanced emission control technologies, integration of combined heat and power (chp) systems, optimization of fuel efficiency and thermal performance, implementation of predictive maintenance and monitoring, expansion of large-scale coal, oil, and natural gas power plants.

The growing adoption of electric vehicles is expected to drive the expansion of the fossil fuel electricity market. Electric vehicles are powered by one or more electric motors and are fueled by an onboard battery pack. Fossil fuel electricity offers significant environmental advantages, including reducing greenhouse gas emissions and improving air quality, and plays a vital role in achieving a sustainable transportation future. For instance, according to Sustainable Bus, an Italy-based media company focused on clean buses and sustainability, the number of electric bus registrations in Europe increased by 53% in 2023 compared to 2022. As a result, the rising adoption of electric vehicles is contributing to the growth of the fossil fuel electricity market.

Major companies in the fossil fuel electricity market are focusing on developing advanced powertrain and vehicle engineering solutions aimed at improving energy efficiency, reducing component weight, lowering manufacturing costs, and optimizing fuel utilization in commercial vehicles. These technological innovations enhance overall vehicle performance and operational efficiency across both conventional and alternative fuel platforms. For example, in September 2024, Mahindra Group, an India-based automobile manufacturer, launched an expanded light commercial vehicle lineup featuring diesel and compressed natural gas (CNG) powertrains. The lineup includes a 1.5-liter, three-cylinder mDI diesel engine delivering 59.7 kW of power and 210 Nm of torque, and a Turbo mCNG engine producing 67.2 kW with comparable torque output. Designed for improved fuel economy and reduced operating costs, the diesel variant achieves 18.4 km/l, while the CNG configuration delivers 19.2 km/kg, supporting efficiency-driven commercial transportation needs.

In November 2023, Capital Power, a Canada-based electricity generation company, acquired La Paloma and Harquahala for $1.1 billion. This acquisition will enhance Capital Power's capacity and operational reach, making it the fifth-largest operator of flexible gas-fired generation in North America. It supports their strategy to strengthen their position in key Canadian and U.S. markets. La Paloma and Harquahala are natural gas-fired generation facilities located in the United States.

Major companies operating in the fossil fuel electricity market are American Electric Power Company Inc, Duke Energy Corporation, Southern Company, NRG Energy, Vistra Corp, Calpine Corporation, Entergy Corporation, AES Corporation, Dominion Energy, Exelon Corporation, RWE AG, ENGIE SA, Enel SpA, Iberdrola SA, NTPC Limited, China Huaneng Group, China Power International Development Limited, Datang International Power Generation Co Ltd, Aksa Energy, Korea Electric Power Corporation (KEPCO), Tokyo Electric Power Company Holdings Inc, Uniper SE, E.ON SE, Southern California Edison, Tennessee Valley Authority, Xcel Energy, Dominion Energy Mid-Atlantic, FirstEnergy Corp.

Asia-Pacific was the largest region in the fossil fuel electricity market in 2025. Western Europe was the second-largest region in the fossil fuel electricity market. The regions covered in the fossil fuel electricity market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the fossil fuel electricity market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The fossil fuel electricity market includes revenues earned by entities by gas turbines, Diesel engines, and Spark-ignition internal combustion engines. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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