Power surge: IEA projects sharp rise in global electricity demand

Researchers at the International Energy Agency project a surge in global demand for electricity in the coming three years as electric vehicles, data centers and air conditioning grow worldwide.

In its annual report on global electricity released Friday, the IEA said it expects electricity demand through 2027 to grow by 4 percent a year, or equal to the energy used by some major developed economies.

“This is equivalent to adding more than one Japan every year,” Keisuke Sadamori, the IEA’s director of energy markets and security, said at a press briefing before the report’s release. “This is unprecedented.”

Sadamori said the world was entering a new “Age of Electricity” as more transportation systems and household appliances are electrified and technology companies add more energy-intensive data centers.

After decades of relatively flat power demand in the U.S., the IEA projects a strong increase of 2 percent a year through 2027. That’s the equivalent of adding California’s current power consumption over the next three years.

Electricity for buildings will be a big part of the U.S. demand for electricity, especially the power needed for data centers as AI requires more computing power.

A report released in December by the Lawrence Berkeley National Laboratory estimates that data center energy use in the U.S. is expected to either double or triple by 2028, growing to consume as much as 12 percent of the country’s total electricity.

While data centers will be big energy users in some regions, the IEA said, they are a relatively small part of the global electricity demand.

The IEA said 85 percent of the global increase in power demand will come from the developing economies of the world where the biggest single driver of new demand will be the rapid spread of air conditioning.

While air conditioning is common in the U.S., it is still rare in many countries where climate change is contributing to rising temperatures and more frequent heat waves. In India, about 18 percent of households have air conditioning, IEA researchers said, and in Nigeria, only 5 percent of households do.

The rapid growth in power demand could result in even more greenhouse gases causing climate change if countries rely more heavily on fossil fuels to generate electricity.

However, the surge in electricity demand coincides with a global boom in growth of renewable energy and other low-carbon power sources, the IEA said. The researchers forecast that the combination of renewable energy and nuclear power will meet all the coming increase in electricity demand worldwide.

Nuclear power is forecast to set new records for electricity generation as new units come online and reactors that had been idled are brought back into service, the report said.

Electricity from solar alone is projected to meet about half the power demand growth, the IEA said, and China and the U.S. are both expected to see solar generate 10 percent of national electricity needs by 2027.

In the EU, electricity from solar surpassed the power generated by coal in 2024.
As a result of the strong growth in low-carbon energy sources, the IEA said, global emissions of carbon dioxide from the electricity sector are expected to plateau in the coming three years.

That would be a welcome relief for a world that has just marked two consecutive years of record-breaking heat. But it is still far from the decreases in emissions required to meet science-based targets and avoid the worst effects of climate change.