IEA: Global electricity demand to grow at fastest pace in nearly 20 years

Global electricity demand is expected to grow at its fastest pace in nearly 20 years this year, driven by rising demand for air conditioning in response to heatwaves, as well as strong economic growth and the use of technologies such as electric vehicles and heat pumps. This trend will continue next year and will also support coal-fired power generation, even as electricity generation from renewables increases. The International Energy Agency (IEA) said in its outlook.

Global electricity consumption is expected to increase by around four percent this year, the most since 2007. Demand is forecast to grow at the same rate in 2025. In 2023, consumption rose by 2.5 percent.

“Growth in global electricity demand this year and next will be among the fastest in the past 20 years, highlighting the growing role of electricity in our economies as well as the impacts of extreme heat,” said Keisuke Sadamori, IEA Director of Energy Markets and Security.

The increase is expected to be the highest since 2007, excluding the exceptional rebounds following the global financial crisis and the COVID-19 pandemic, the IEA noted.

Rising use of air conditioning in response to heatwaves is expected to be the primary driver of demand growth. To maintain the reliability of supply, “dirtier” sources of electricity, such as coal, will need to be used. Demand for electricity is also being driven by interest in artificial intelligence (AI).

Demand is expected to rise most in India this year, by eight percent. In China, it will increase by six percent. In the European Union, demand is forecast to rise by 1.7 percent after two years of decline. In the United States, demand is expected to increase by three percent, after consumption edged down last year due to mild weather.

Electricity generation from renewables is also expected to grow in the coming years, with renewables forecast to account for 35 percent of total electricity supply in 2025. The share of solar and wind power in the global mix will surpass that of hydropower.

In 2025, total electricity generation from renewables is also expected to overtake generation from coal-fired power plants. This most polluting source of electricity generation will remain resilient this year, however, with output from coal-fired power plants rising by just under one percent.