Surge in Global Electricity Demand Expected to Continue
PARIS — The global demand for electricity is rising at the fastest rate in years and will soon climb to the highest levels seen in this century, according to a new report from the International Energy Agency.
The agency’s latest report, Electricity Mid-Year Update, identifies three main causes for the increased demand: solid economic activity in many regions, intense heat waves and the growing adoption of technologies that run on electricity, including EVs.
It goes on to say that if the current surge keeps up, the global demand for electricity this year will rise 4%, up from 2.5% in 2023.
This would represent the highest annual growth rate since 2007, excluding the exceptional rebounds seen in the wake of the global financial crisis and the COVID-19 pandemic, the study’s authors said.
And they warn that the strong increase in global electricity consumption looks as if it will continue into 2025, with growth again at around 4%.
If there’s a silver lining to all this, it is that electricity made from renewable sources is also expected to expand rapidly this year and next, with solar and wind energy alone expected to meet about three-quarters of the increase in demand.
Overall, renewable sources of electricity are set to see their share of global electricity supply rise from 30% in 2023 to 35% in 2025.
But that’s not all. According to the IEA, the amount of electricity generated by renewables worldwide in 2025 is forecast to eclipse the amount generated by coal for the first time.
“Growth in global electricity demand this year and next is set to be among the fastest in the past two decades, highlighting the growing role of electricity in our economies as well as the impacts of severe heat waves,” said Keisuke Sadamori, IEA director of Energy Markets and Security, in a written statement.
“It’s encouraging to see clean energy’s share of the electricity mix continuing to rise, but this needs to happen at a much faster rate to meet international energy and climate goals,” Sadamori said. “At the same time, it’s crucial to expand and reinforce grids to provide citizens with secure and reliable electricity supply — and to implement higher energy efficiency standards to reduce the impacts of increased cooling demand on power systems.”
Despite the sharp increases in renewables, global power generation from coal is unlikely to decline this year due to the strong growth in demand, especially in China and India, according to the report.
As a result, the IEA said, carbon dioxide emissions from the global power sector are plateauing, with a slight increase in 2024 followed by a decline in 2025.
The authors warn, however, that considerable uncertainties remain: Chinese hydropower production recovered strongly in the first half of 2024 from its 2023 low.
If this upward trend continues in the second half of the year, it could curb coal-fired power generation and result in a slight decline in global power sector emissions in 2024.
Some of the world’s major economies are registering particularly strong increases in electricity consumption.
Demand in India is expected to surge by a massive 8% this year, driven by strong economic activity and powerful heat waves.
China is also set to see significant demand growth of more than 6%, as a result of robust activity in the services industries and various industrial sectors, including the manufacturing of clean energy technologies.
After declining in 2023 amid mild weather, electricity demand in the United States is forecast to rebound this year by 3% amid steady economic growth, rising demand for cooling and an expanding data center sector.
By contrast, the European Union will see a more modest recovery in electricity demand, with growth forecast at 1.7%, following two consecutive years of contraction amid the impacts of the energy crisis.
In many parts of the world, increasing use of air-conditioning will remain a significant driver of electricity demand. Multiple regions faced intense heat waves in the first half of 2024, which elevated demand and put electricity systems under strain, the report finds.
Dan can be reached at [email protected] and @DanMcCue
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