The International Energy Agency (IEA) forecasts a significant surge in global electricity consumption, with expectations of nearly 4% annual growth from now until 2027.
This growth rate marks the fastest increase in recent years, driven by rising power demands across various economic sectors. According to the IEA's latest report, Electricity 2025, the anticipated uptick in demand equates to annually adding more electricity consumption than Japan utilizes.
Emerging Economies Lead the Growth
Emerging and developing economies are set to account for 85% of this burgeoning demand over the next three years. China stands out, with its electricity demand exceeding its overall economic growth since 2020.
China stands out, with its electricity demand exceeding its overall economic growth since 2020
Electricity use in China ascended by 7% in 2024 and is projected to continue growing at an average pace of 6% through 2027. This demand is largely attributed to the industrial sector's expansion, particularly in electricity-intensive manufacturing like solar panels, batteries, and electric vehicles.
Shifting Energy Dynamics
Keisuke Sadamori, IEA Director of Energy Markets and Security, remarked on the transformation within global energy systems, which heralds a new Age of Electricity yet poses challenges for governments to ensure sustainable supplies.
While advanced economies will see some increase after a stagnant period, the focus remains on the rapid growth in developing regions. Policymakers are urged to consider these changing dynamics, which will be discussed at the upcoming IEA-hosted Summit on the Future of Energy Security in London, April.
Renewables and Nuclear Take Center Stage
Alongside solar, nuclear energy is also poised for significant expansion
The report projects that growth in low-emission energy sources, primarily renewables and nuclear, will be sufficient to meet the demand increase. Specifically, solar photovoltaic (PV) energy is expected to contribute approximately half of the global electricity demand growth by 2027.
In the European Union, solar electricity generation surpassed coal in 2024, with solar energy now comprising over 10% of the power mix. Similarly, China, the United States, and India aim to have solar PV reach 10% of their electrical generation. Alongside solar, nuclear energy is also poised for significant expansion, potentially reaching record highs annually from 2025 onwards.
Emissions and System Resilience
As renewables and nuclear energy ramp up, carbon dioxide emissions from electricity generation are predicted to plateau, following a 1% increase in 2024. The report highlights several challenges faced by electricity systems, including weather-induced disruptions like U.S. winter storms, Atlantic hurricanes, and drought-related impacts on hydropower in Latin America. These incidents underscore the need for more resilient electricity systems.
Weather and Price Volatility
The IEA report also addresses the crucial impact of weather on electricity systems and the rising volatility in wholesale electricity prices, indicating a growing necessity for system flexibility. Instances of negative wholesale prices—though not yet commonplace globally—point to a lack of system adaptability due to technical or regulatory constraints.
The world’s electricity consumption is forecast to rise at its fastest pace in recent years, growing at close to 4% annually through 2027 as power use climbs in a range of sectors across the economy, according to a new IEA report released.
Electricity 2025, the latest edition of the IEA’s main market analysis of the sector, forecasts that the growth in global demand will be the equivalent of adding an amount greater than Japan’s annual electricity consumption every year between now and 2027.
The surge is primarily driven by robust growing use of electricity for industrial production, increased demand for air conditioning, accelerating electrification, led by the transport sector, and the rapid expansion of data centers.
Additional demand
Most of the additional demand over the next three years will come from emerging and developing economies
Most of the additional demand over the next three years will come from emerging and developing economies, which account for 85% of the demand growth.
The trend is most pronounced in China, where electricity demand has been growing faster than the overall economy since 2020. China's electricity consumption rose by 7% in 2024 and is expected to grow by an average of around 6% through 2027.
The demand growth in China has been fuelled in part by the industrial sector, where, alongside the traditional energy-intensive sectors, the rapidly expanding electricity-intensive manufacturing of solar panels, batteries, electric vehicles, and associated materials played a significant role. Air conditioning, electric vehicle adoption, data centers, and 5G networks are additional contributors.
Global electricity demand
“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,” said IEA Director of Energy Markets and Security Keisuke Sadamori.
“While emerging and developing economies are set to drive the large majority of the growth in global electricity demand in the coming years, consumption is also expected to increase in many advanced economies after a period of relative stagnation.”
“Policy makers need to pay close attention to these shifting dynamics, which will be addressed at the international Summit on the Future of Energy Security that the IEA is hosting with the UK government in London in April.”
Strong increase in electricity demand
The new report forecasts that growth in low-emissions sources – primarily renewables and nuclear
In the United States, a strong increase in electricity demand is expected to add the equivalent of California's current power consumption to the national total over the next three years.
Electricity demand growth is forecast to be more modest in the European Union, only rising back to its 2021 levels by 2027, following the major declines in 2022 and 2023 triggered by the energy crisis.
The new report forecasts that growth in low-emissions sources – primarily renewables and nuclear – is sufficient, in aggregate, to cover all the growth in global electricity demand over the next three years.
Solar electricity
In particular, generation from solar PV is forecast to meet roughly half of global electricity demand growth through 2027, supported by continued cost reductions and policy support.
Electricity generation from solar PV surpassed that from coal in the European Union in 2024, with solar’s share of the power mix exceeding 10%.
China, the United States, and India are all expected to see solar PV’s share of annual electricity generation reach 10% between now and 2027. At the same time, nuclear power is making a strong comeback, with its electricity generation on course to hit new highs every year from 2025 onward over the forecast period.
Carbon dioxide emissions
Carbon dioxide emissions from global electricity generation are expected to plateau in the coming years
As a result of these forecast trends, carbon dioxide emissions from global electricity generation are expected to plateau in the coming years after increasing by about 1% in 2024.
The report examines some of the major strains faced by electricity systems in 2024, including winter storms in the United States, hurricanes in the Atlantic, blackouts caused by extreme weather in Brazil and Australia, and droughts reducing hydropower in Ecuador, Colombia and Mexico.
These events highlight the importance of ensuring greater resilience of electricity systems, the report notes.
Critical role of weather
It also looks at the critical role of weather for electricity systems and the rising volatility in wholesale electricity prices in some regions, which indicates a growing need for system flexibility.
Incidents of negative wholesale electricity prices have been rising in some power markets, although they are still relatively uncommon globally. These occurrences broadly signal insufficient flexibility in the system due to technical, regulatory, or contractual reasons.
