Global electricity demand is projected to increase by 4% annually until 2027, a rate that surpasses Japan’s entire current electricity consumption. According to the International Energy Agency (IEA), the rapid rise in demand is expected to be mitigated somewhat by a shift toward low-emission energy sources like renewables and nuclear power.
Emerging Economies Lead Demand Growth
The vast majority of this demand growth will come from emerging and developing economies, with China playing a dominant role, contributing over half of the global increase. China’s electricity consumption is forecast to grow at a 6% annual rate through 2027, largely driven by its energy-intensive industrial sector and booming production of solar panels, batteries, and electric vehicles. India is also expected to play a key role, contributing 10% of global demand growth due to strong economic activity and surging air conditioning use.
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Developed Economies Set For A Turnaround
In developed economies, such as the US, electricity demand, which had previously been stagnant, is expected to grow due to the increased electrification of sectors like transportation, heating, and data centers. However, the European Union’s outlook has been revised downward, with expected growth in 2025 now pegged at 1.6%. This reflects a weaker macroeconomic environment, and the EU may not recover to 2021 demand levels until at least 2027, despite a growth rebound in 2024.
Renewables To Meet Growing Demand
Low-emission energy sources, including renewables and nuclear power, are expected to increasingly meet global electricity demand. Solar power is forecast to become the second-largest low-emission source by 2027, after hydropower. Notably, renewables are set to overtake coal as the leading power generation source by 2025, with coal’s share in the energy mix dipping below 33% for the first time in a century, according to the IEA.
