IEA: Global electricity consumption is set to grow at a faster pace than in recent years, increasing by about 4% annually through 2027. However, all additional demand is expected to be met by low-emission technologies.
Electricity 2025 report: key insights
The slowdown that affected global electricity demand in recent years is officially over. Forecasts for electricity consumption growth are now trending upward, with China and other developing economies driving a steeper trajectory than in the recent past. Demand is expected to increase by 4% annually through 2027, with low-emission energy sources—led by solar power—fully covering this rise.
This outlook comes from the International Energy Agency (IEA), which has released its latest report, Electricity 2025. The study provides a detailed analysis of current trends in the global power sector.
A new era for electricity
The report highlights a shift that the authors call the New Age of Electricity. “The strong growth in global electricity demand in 2024, fueled by the expansion of electrification, is ushering in a new era […] Electricity consumption increased by about 4.3% year over year in 2024, compared to 2.5% in 2023, with a projected steady growth of 3.9% during our forecast period.“
In other words, over the next three years, demand is expected to rise by about 3,500 TWh – roughly equivalent to adding the entire electricity consumption of Japan every year.
What’s driving global electricity demand?
The shift to electric power is not the only factor behind this surge. Other key drivers include industrial production, the increasing use of air conditioning, and the global expansion of data centers.
Which countries are leading the demand surge?
Some nations are playing a more significant role in this acceleration than others. China, which accounted for more than half of the total electricity demand growth in 2024, will continue to be the main driver. Last year, the country’s energy-intensive industries and rapidly expanding sectors—such as solar panel manufacturing, battery production, and electric vehicles—pushed electricity consumption up by 7%. These industrial sectors alone required more than 300 TWh, equivalent to Italy’s annual electricity needs.
India, accounting for 10% of total global demand growth through 2027, along with Southeast Asia, will also see substantial increases, driven by economic expansion and rising air conditioning adoption. Meanwhile, Africa lags behind, with 600 million people in sub-Saharan Africa still lacking access to electricity.
Advanced economies: slow but steady demand growth
Electricity demand in advanced economies remained relatively unchanged in 2024 compared to 2021. Through 2027, additional demand in these countries is expected to grow by about 15%, driven by the electrification of transport and heating sectors, as well as data center expansion. In the United States, data center growth projections are a key factor influencing electricity demand trends, while in the European Union, the situation is more complex.
Europe’s electricity demand: a slow recovery
One certainty remains: Europe’s electricity demand is recovering from the economic slowdown of recent years. However, according to the IEA, it will not return to 2021 levels before 2027. Following a -3% decline in consumption in 2022 and 2023, 2024 saw a modest 1.4% increase, driven by the residential and commercial sectors and rising data center demand. Industrial electricity consumption, however, remained relatively flat.
The reason is clear. Although electricity prices for energy-intensive industries in the European Union have fallen from their 2022 peaks, they were still, on average, twice as high as in the United States and 50% higher than in China in 2024.
On the positive side, the EU’s energy mix has become significantly cleaner. “We expect renewable generation growth to continue at a similar pace through 2025-2027, at an average annual rate of about 7%. Solar and wind power will account for most of the increase, with annual growth rates of approximately 17% and 10%, respectively.” The shift away from fossil fuels in 2024 contributed to a 12% reduction in CO2 emissions intensity in Europe, with a projected annual decline of 9% between 2025 and 2027.
Renewables to power global electricity demand growth
The Electricity 2025 report predicts that low-emission energy sources will meet all of the global electricity demand growth through 2027. Renewable energies—including solar, wind, and hydropower—are expected to cover approximately 95% of the projected increase. By 2025, renewables alone will provide more than one-third of the world’s total electricity production, surpassing coal.
“Renewables are expected to more than meet demand growth in advanced economies, reducing fossil fuel generation. In China, they are projected to cover about 90% of the additional electricity demand, though weather events and unexpected shifts in consumption could affect this trend in specific years.”
Solar power’s dominant role
Solar power—becoming increasingly cost-competitive—will account for nearly half of the projected demand growth. In 2024, the sector celebrated reaching 2,000 TWh in electricity production, representing 7% of global power generation. Forecasts suggest an additional 600 TWh per year will be added over the next three years.
“The strong growth trend in solar power is accompanied by the continued expansion of wind generation, which is expected to meet about one-third of the additional global electricity demand between 2025 and 2027,” the report states.
