World electricity consumption is forecast to rise at its fastest pace in recent years, growing at close to 4% annually through to 2027 as power use climbs in a range of sectors across the economy, according to the International Energy Agency’s new report ‘Electricity 2025’. This latest edition of the IEA’s 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 artificial intelligence and data centres.
Most 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. But the report notes that electricity demand is also expected to pick up in advanced economies after broadly stagnating for the past 15 years.
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, according to the report. Generation from solar PV is forecast to meet roughly half of global electricity demand growth through to 2027, supported by continued cost reductions and policy measures, while generation from nuclear power is on course to hit new highs in each year of the forecast period.
Additionally, 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 Colombia, Ecuador and Mexico, highlighting the importance of ensuring greater resilience of electricity systems.
Read the full report.
