A new market analysis by the International Energy Agency (IEA) has found that electricity consumption is set to rise at its fastest pace in recent years, largely driven by growing use for industry, air conditioning, electrification and data centres.
Global electricity consumption is forecast to rise by around four per cent each year through 2027, as power use climbs in a range of sectors across the economy.
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 report found that 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 centres.
Most of the additional demand over the next three years is expected to come from emerging and developing economies, which account for 85 per cent of the demand growth.
IEA Director of Energy Markets and Security, Keisuke Sadamori, said, “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.
“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.”
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.
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. The report also found that 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. 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 one per cent in 2024.
The report examines some of the major strains faced by electricity systems in 2024, including blackouts caused by extreme weather in Australia. The report notes that such events highlight the importance of ensuring greater resilience of electricity systems.
Read the full report here.
