According to a new report by the International Energy Agency (IEA), global electricity consumption is expected to rise at its fastest pace in recent years, with renewables set to play a significant role in meeting the growing demand.
The IEA’s “Electricity 2025” report forecasts that low-emission energy sources, including renewables and nuclear, will collectively account for enough growth to meet all global electricity demand increases through the next three years. Over the period leading up to 2027, global electricity demand is projected to grow at an average annual rate of around 4%.
“While the growth in electricity demand is substantial, the good news is that low-carbon technologies are keeping pace,” the IEA report states. Solar photovoltaic (PV) generation alone is expected to meet about half of the increase in global electricity demand through 2027, driven by continued cost reductions and policy support for the technology.
In the European Union, solar PV is already projected to surpass coal in electricity generation by 2024, with solar contributing more than 10% of the power mix. The report notes that solar’s share of electricity generation in major markets such as China, the United States, and India is expected to reach 10% by 2027.
The report highlights that the increase in global electricity demand will be equivalent to adding more electricity consumption than that of Japan every year through 2027. The rise is mainly driven by increased electricity use in industrial production, growing demand for air conditioning, the acceleration of electrification in the transport sector, and the rapid expansion of data centers.
Most of the additional demand will stem from emerging and developing economies, which are expected to account for 85% of the global demand growth. In particular, China has seen its electricity demand grow faster than its overall economy since 2020.
Keisuke Sadamori, IEA Director of Energy Markets and Security, 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.”
Sadamori emphasized that policymakers must address the shifting dynamics of electricity consumption, especially as demand increases in both emerging and advanced economies. He added, “These shifting dynamics 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.
