The world’s electricity consumption is forecast to rise at its fastest pace in recent years – and renewables are to play a huge role in meeting demand, according to a new IEA report.
The report, Electricity 2025, forecasts that growth in low-emissions sources – primarily renewables and nuclear – is sufficient, in aggregate, to cover all the growth in global electricity demand over the next three years.
Increase in electricity consumption through 2027 is expected to average at around 4% annually, the report said.
However, generation from solar PV is forecast to meet roughly half of global electricity demand growth through 2027, supported by continued cost reductions and policy support.
Electricity generation from solar PV surpassed that from coal in the European Union in 2024, with solar’s share of the power mix exceeding 10%.
China, the United States and India are all expected to see solar PV’s share of annual electricity generation reach 10% between now and 2027.
The report is the latest edition of the IEA’s main market analysis of the sector.
It says that the growth in global demand will be the equivalent of adding an amount greater than Japan’s annual electricity consumption every year between now and 2027.
The surge is primarily driven by robust growing use of electricity for industrial production, increased demand for air conditioning, accelerating electrification, led by the transport sector, and the rapid expansion of data centres.
Most of the additional demand over the next three years will come from emerging and developing economies, which account for 85% of the demand growth.
The trend is most pronounced in China where electricity demand has been growing faster than the overall economy since 2020.
IEA director of energy markets and security Keisuke Sadamori 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.
“While emerging and developing economies are set to drive the large majority of the growth in global electricity demand in the coming years, consumption is also expected to increase in many advanced economies after a period of relative stagnation.
“Policy makers need to pay close attention to these shifting dynamics, which 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.”