Electricity demand is set to increase sharply in the coming years as people around the world use more power to run air conditioners, industry and a growing fleet of data centres.
Over the next three years, global electricity consumption is set to rise by an “unprecedented” 3 500TWh, according to a report by the International Energy Agency. That’s an addition each year of more than Japan’s annual electricity consumption.
The roughly 4% annual growth in that period is the fastest such rate in years, underscoring the growing importance of electricity to the world’s overall energy needs.
“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,” Keisuke Sadamori, IEA’s director of energy markets and security, said in a statement. “But it also presents evolving challenges for governments in ensuring secure, affordable and sustainable electricity supply.”
Developing countries have driven power demand growth in recent years, with consumption in advanced economies having stagnated or even fallen due to increasing efficiencies. But now, the US, EU and Japan are all set to see growth in demand, the IEA found. America alone is set to see power demand growth over the next three years equal to the annual consumption of California, its most populous state.
But the more significant increases will still come from developing countries, particularly China. An increasing portion of China’s economy is running on electricity, with roughly 28% of final energy consumption coming from power, compared to 22% in the US.
Record generation
To pump out solar panels, batteries and electric vehicles, Chinese factories used as much power as Italy did last year. Industry will continue to be the main driver of power growth in China, along with increasing demand for air conditioning and charging EVs.
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All that new demand will be met with record generation from renewable and nuclear power stations, the IEA found. But despite soaring output from green power sources, it likely won’t be enough to meaningfully reduce emissions. Global carbon emissions from the power sector are set to decline by just 0.1% annually through to 2027, with coal power remaining roughly flat in that period and power from natural gas-fired stations rising 0.6%. — William Mathis, (c) 2025 Bloomberg LP
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