Growth in Global Electricity Demand Persists Steadily up to 2026, Overcoming Challenges
Global Electricity Demand Set for Robust Growth Through 2026
The International Energy Agency (IEA) has predicted a surge in global electricity demand, with a growth of 3.3% in 2025 and 3.7% in 2026 [1][2]. This growth is more than twice the average energy demand growth rate over this period.
The key drivers of this robust growth are the increasing use of air conditioners due to heatwaves, expansion of data centers, increased adoption of electric vehicles (EVs), and growing industrial and digital infrastructure investments. These factors are driving demand largely in emerging and developed markets [1].
Regions with the Most Significant Increase
China, the world's most populous nation, is expected to witness the most significant increase in electricity demand, with an annual growth of about 5-5.7%. This growth is fueled by manufacturing, technology sectors, EV adoption, and heat pumps [1].
India, with its rapidly growing middle class and increasing cooling needs, is forecast to experience growth of about 6.6% [1]. Southeast Asia is also witnessing steady increases from rural electrification and urbanization [1].
In wealthier countries like the U.S., growth is more moderate (~2.2-2.3% annually) but driven by large tech companies powering hyperscale data centers and ongoing electrification demand [1][2].
Renewables to Lead the Way
Despite a decrease from the 2023 annual average, wholesale electricity prices in the EU and USA remained above the 2019 level between January and June 2025. However, the IEA warns of the need for greater investment in grids, storage, and other flexibility options to ensure that power systems can meet growing demand securely and affordably [2].
Renewable energy is expected to overtake coal as the world's largest source of electricity as early as 2025, and at the latest by 2026. Renewables, particularly wind and solar PV, are expected to cover over 90% of this increase by 2026, reshaping energy markets globally and helping stabilize emissions from electricity generation despite higher consumption [3][4][5].
Negative electricity prices are becoming more frequent in some markets, indicating a growing need for flexibility in the power system. The IEA expects CO2 emissions from power generation to stabilize in 2025 and decline slightly in 2026, subject to weather and economic conditions [2].
Gas-fired power plants are gaining in importance as they displace coal and oil. Nuclear power is also being expanded, with factors including the restart of reactors in Japan, robust generation performance in the USA and France, and new power plants, particularly in Asia [2].
However, average electricity prices for energy-intensive industries in the European Union are still twice as high as in the United States. These cost differences continue to pose a challenge to the competitiveness of energy-intensive industries in the European Union [2].
References: [1] International Energy Agency (IEA) - Global Energy Review 2025 [2] International Energy Agency (IEA) - Electricity Information 2025 [3] International Energy Agency (IEA) - Renewables 2025 [4] International Energy Agency (IEA) - World Energy Outlook 2024 [5] International Energy Agency (IEA) - Energy Policies of IEA Countries: China 2024 Review
This article is generated by an AI model and may not be fully accurate or comprehensive. Always verify information from multiple sources.
- The surge in global electricity demand is attributed to various factors, including the growing adoption of electric vehicles (EVs) and increased investment in renewable energy, as outlined by the International Energy Agency (IEA) in their Global Energy Review 2025.
- According to the IEA's Electricity Information 2025, countries such as China and India are expected to witness significant increases in electricity demand, driven by factors like industrial growth, digital infrastructure, and cooling needs.
- In the realm of environmental science, renewable energy sources like wind and solar PV are projected to cover over 90% of the electricity increase globally by 2026, as noted in the IEA's Renewables 2025 report.
- Financing the expansion and modernization of power systems to meet the growing electricity demand is a concern, particularly in providing necessary grid, storage, and flexible options, as highlighted in the IEA's Electricity Information 2025.
- Lifestyle choices are also a significant factor in electricity demand growth, as the rise of electric cars (cars) contributes to the increased demand for energy, particularly in developed markets, a trend that the IEA discusses in its Global Energy Review 2025.
