IEA: Global electricity demand will grow by 4% until 2027

The IEA released a report Friday that predicted the global electricity demand to increase by 4% – or more than Japan's total annual consumption – each year until 2027. However, the expansion of energy sources with low emissions should help counteract this trend.

The IEA said that the 85% growth in global demand is expected to come from emerging and developing economies. China will account for more than half the growth with a 6% annual growth rate.

China's power demand has grown faster than its economy since 2020, spurred by a power-hungry industrial sector and the rapid expansion of electricity-intensive manufacturing of solar panels, batteries, EVs and associated materials, the report said.

Additional contributors include air conditioning, data centers and 5G networks.

Eren Cam, the lead author of this report, told journalists that "the (data center sector) has a very significant electricity consumption in different regions. However on a global level it is still quite low."

He added that "around 1% of the global electricity consumption is accounted for by data centers, and growth in this sector will continue, but it will occur at different rates across different regions."

The IEA has said that it plans to release a data center report later this year.

India, with its robust economy and rapid rise in air conditioning demand, is expected to also account for 10% of global growth in demand.

The IEA revised its July forecast for the European Union down by one percentage point, to a growth of 1.6% in 2025.

The report stated that despite the fact that demand grew in 2024, it is unlikely to reach its level of 2021 until at least 2027.

Fabian Ronningen, analyst at Rystad, said: "The impact of the crisis is not felt in Europe."

He said that "in recent years we have seen Germany and Poland perform below the EU average. This is expected to continue in the future."

The report stated that low-emission energy sources, such as nuclear and renewables, are expected to keep pace with global demand growth as they continue edging out coal in the power mix.

Solar power is predicted to be the second-largest source of low-emissions in 2027, behind hydropower. Renewables will also surpass coal-fired electricity generation in 2025 when the share of the polluting fuel falls below 33% for first time in a century.

(source: Reuters)