Electricity demand jumps as renewables keep up with growth

The global demand for electricity is set to grow by 4% each year through 2027, says a report published by the International Energy Agency (IEA). This yearly demand, equal to Japan’s total electricity consumption, will be offset by the growth of renewable energy sources.

The electrification of transportation drives this surge, as do increased data center energy requirements and rising air conditioning use, particularly in developing economies. Notably, emerging markets such as China and India are expected to account for 85% of this increase, with Beijing seeing its electricity consumption soar by 7% in 2024 alone.

The IEA forecasts that renewable energy sources will meet approximately 95% of global electricity demand growth through 2027. Solar power is taking center stage and is expected to meet about half of the additional power demand growth. This transition is already visible in the European Union, where solar generation surpassed coal in 2024, achieving over 10% share in the power mix. Both China and the United States are projected to reach similar solar generation shares by 2027.

Regional growth patterns behind electricity demand

China’s electricity consumption surge is driven by its energy-intensive industries, including solar panel manufacturing, batteries, and electric vehicles. Of particular note is that Chinese industrial sectors alone required 300 TWh of electricity–equivalent to Italy's annual consumption. India’s economic expansion is behind its rising demand.

The US is expected to see a 2% annual increase through 2027, equivalent to adding California's current power consumption over three years. A particularly noteworthy factor is the projected impact of data centers, with estimates suggesting their energy use could double or triple by 2028, potentially consuming up to 12% of total U.S. electricity demand.

After two years of consecutive decline, the EU’s electricity demand rose again. Yet, it is still far away from 2021 levels, with demand not anticipated to meet similar standards until 2027. In 2024, renewable energy generation rose by 8.4%, which is expected to continue in the coming years.

2024: Electricity in Europe cleaner than ever before

Last year, more electricity was produced from renewable energy sources in Europe than ever before.

Solar energy matches half of the electricity demand

The growth of low-emission sources will be the key to offset the rising electricity demand. According to the IEA, in 2025 already, renewable sources will provide over a third of the total global electricity demand, overtaking coal.

Particularly, the rise of solar power–cheaper than ever—will account for half of the global electricity demand expansion. In 2024, solar photovoltaics (PV) reached the 2000 TWh production mark, equalling 7% of global electricity consumption. The IEA expects around 600 TWh of additional solar PV generated in the next three years.

At the same time, nuclear power is projected to reach a new high in 2025, steadily rising in the coming two years. As French nuclear output recovers, restarts in Japan, and new reactors enter operations in China, India, and Korea, there will be strong growth.

Extreme weather impact

At the same time, the IEA warns about the impact of extreme weather events. Storms, droughts, and heatwaves disrupted global power production in the US, Australia, and South American countries, to name a few.

Therefore, the agency calls for higher resilience to the shocks brought by extreme weather. Dispatchable capacity and storage, demand-side response, and interconnections will be key to guarantee a higher level of energy security.

Balcony solar panels boom in Germany—will the Netherlands follow?

Germany’s balcony solar panels boom is transforming energy use with plug-and-play systems. Will the Netherlands follow?