Global Electricity Demand Set to Surge Rapidly

Welcome, Net Zero News readers,

As we journey deeper into the 21st century, the landscape of electricity consumption is undergoing transformative changes that promise to reshape our energy systems significantly. According to the latest report from the International Energy Agency (IEA), titled “Electricity 2025,” we are on the brink of witnessing an unprecedented annual average increase in electricity consumption, projected to be around 4% through 2027. This surge is driven by a variety of factors, including growing industrial use, rising air conditioning needs, ongoing electrification, and the burgeoning demand from data centres.

The IEA’s comprehensive market analysis highlights that global electricity consumption will be on track to grow at its “fastest pace in recent years.” Remarkably, this increase in demand is expected to equate to adding an annual electricity consumption greater than that of Japan, a significant milestone for global energy dynamics.

One of the most encouraging aspects of this report is the anticipated growth in low-emission energy sources, particularly renewables and nuclear power. The IEA forecasts that the combined generation from these sources will be sufficient to meet all anticipated increases in global electricity demand over the next three years. Notably, solar photovoltaic (PV) technology is projected to contribute substantially, with estimates suggesting it will account for approximately half of the global electricity demand growth through 2027. This optimistic outlook is bolstered by continuous reductions in costs and robust policy support for renewable energy initiatives.

Indeed, solar energy has already begun to make significant strides. In 2024, electricity generation from solar PV overtook that of coal within the European Union, with solar’s share of the power mix surpassing 10%. This trend is not confined to Europe; countries like China, the United States, and India are also expected to see solar PV’s contribution to their annual electricity generation reach 10% by 2027. This shift underscores the increasing viability and importance of solar energy within the global energy portfolio.

Moreover, the report indicates that nuclear power is experiencing a resurgence, with generation levels projected to reach new highs annually from 2025 onwards throughout the forecast period. This revival in nuclear energy reflects a broader strategy to meet rising electricity demands while aiming for sustainability and low carbon emissions.

However, the report also raises important considerations regarding the stability and resilience of electricity systems in the face of volatile weather conditions and fluctuating wholesale electricity prices. As demand grows, particularly in emerging and developing economies—which are expected to account for a staggering 85% of the demand growth over the next three years—the need for greater system flexibility becomes paramount. This is particularly relevant in regions where extreme weather events can severely impact electricity supply and demand dynamics.

China is at the forefront of this electricity demand surge, with its consumption growing at a pace that outstrips overall economic growth since 2020. In 2024, China’s electricity consumption rose by 7% and is projected to continue expanding at an average rate of around 6% through 2027. This growth is largely driven by the industrial sector, which includes not only traditional energy-intensive industries but also the rapidly expanding sectors associated with the production of solar panels, batteries, and electric vehicles. Furthermore, the increasing prevalence of air conditioning, the adoption of electric vehicles, and the proliferation of data centres and 5G networks are additional contributors to this remarkable demand growth.

Across the Atlantic, the United States is also set to experience a significant uptick in electricity demand, with projections suggesting that the equivalent of California’s current power consumption will be added to the national total over the next three years. In contrast, electricity demand growth within the European Union is expected to be more moderate, with consumption forecasted to return to 2021 levels only by 2027.

Keisuke Sadamori, the IEA Director of Energy Markets and Security, aptly summarised the situation, stating, “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.” He further emphasised that while emerging and developing economies are poised to drive the majority of this growth, many advanced economies are also beginning to see increases in consumption following a period of stagnation.

As we navigate these shifting dynamics, it is essential for policymakers to remain vigilant and responsive. The IEA’s upcoming international Summit on the Future of Energy Security, hosted in London in April in collaboration with the UK government, will serve as an important platform for addressing these critical issues and exploring the pathways toward a sustainable energy future.

In summary, the IEA’s “Electricity 2025” report paints a picture of a rapidly evolving energy landscape characterised by increasing electricity consumption, a significant shift towards renewable energies, and the need for enhanced system flexibility. As we collectively strive towards achieving net zero emissions, it is imperative that we harness the opportunities presented by these changes while addressing the challenges that come with them.

As champions of net zero, we must stay informed and engaged with these developments, advocating for policies and practices that support sustainable energy transitions globally. Together, we can help shape a future where clean, reliable electricity is accessible for all.

Image from Shutterstock

This version of the article is tailored to the audience of the ‘Net Zero News Network’, maintaining UK British English standards while ensuring a compelling narrative flow. The content has been expanded and rewritten to meet the specified word count, focusing on clarity and engagement.