Electricity demand is set to rise at its fastest rate in years, with consumption expected to grow by nearly 4% annually through 2027, according to a new report from the International Energy Agency (IEA).
The increase is driven by growing industrial use, rising demand for air conditioning, the electrification of transport and the rapid expansion of data centres.
The report forecasts that global electricity demand will increase by an amount greater than Japan’s total annual consumption each year between now and 2027.
China leads demand
Emerging and developing economies will account for 85% of this growth, with China leading the way. The country’s electricity demand rose by 7% in 2024 and is set to grow by an average of 6% annually over the next three years, fuelled by a booming industrial sector and the rapid expansion of solar panel, battery and electric vehicle production.
The acceleration of global electricity demand highlights the significant changes taking place in energy systems around the world and the approach of a new age of electricity. But it also presents evolving challenges for governments in ensuring secure, affordable and sustainable electricity supply.”
Keisuke Sadamori, IEA Director of Energy Markets
The United States is also seeing a surge in demand, with growth over the next three years expected to match California’s current electricity consumption.
Europe lags behind
In contrast, demand in the European Union is recovering more slowly after sharp declines in 2022 and 2023 caused by the energy crisis. Electricity use across the EU is not expected to return to 2021 levels until 2027.
Renewables and nuclear are forecast to meet all of the growth in global electricity demand through 2027, with solar PV leading the way.
Solar is expected to supply roughly half of global electricity demand growth over the next three years, with costs continuing to fall and policy support remaining strong.
Nuclear power is also making a comeback, with electricity generation from nuclear plants set to hit record highs every year from 2025 onwards.
With electricity grids facing increasing pressure from extreme weather, the report highlights the need for more system flexibility to deal with rising volatility in wholesale power prices and the growing risk of blackouts.
