Released February 17, 2025 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--A new report from the International Energy Agency (IEA) predicts that global electricity consumption over the 2025-2027 period will grow at the fastest annual pace in years, fueled by growing industrial activity, rising use of air conditioning, accelerating electrification and the expansion of data centers.
Global Demand After growing 2.5% in 2023 and 4.3% in 2024, the IEA predicted global electricity demand will rise by close to 4% per year for 2025, 2026 and 2027, an unprecedented gain of 3,500 terawatt-hours (TWh), according to "Electricity 2025: Analysis and Forecast to 2027," which was released February 14. Growth of this magnitude would equate to adding more than the equivalent of a Japan to the world's electricity consumption each year.
Click on the image at right to see recent historical and projected year-over-year electric demand growth globally and in major economies and regions.
Emerging and developing nations are expected to account for about 85% of the growth in electric demand over the 2025-2027 period, the agency said. That will continue a recent trend where electric demand growth has surged in emerging economies like China and India. Economic growth, rising use of air conditioning, growing electrification and data centers are that factors that have driven recent electric demand growth in emerging economies, the IEA report said. Those trends are expected to continue, possibly even accelerate, over the 2025-2027 period as those nations continue to grow their economies, it added.
Global Supply
The "Electricity 2025" report projected record clean energy additions to the world's electric generation systems over the 2025-27 period, coupled with a continued decline in coal use. Renewables will continue to "dominate" additions to electric generation over 2025-27, it predicted, while coal's share is expected to decline. The agency said "low-emission sources--renewables and nuclear--are expected to meet all global demand growth out to 2027."
That's a global projection, but there are wide variations in coal use in different economies. Coal use in emerging economies like China and India is expected to continue rising while its role in the U.S. and EU is expected to continue to fall. For more on that, see January 15, 2024, article - Will the World Cook or Decarbonize? Ask China, Says IEA.
Solar photovoltaic (PV) generation is set to become the second largest low-emissions source of electricity generation in the world by 2027, after hydropower, the agency said, adding: "Renewables, collectively, will surpass coal-fired generation in 2025 and coal's share will decline below 33% for the first time in the last 100 years. Nuclear generation will reach a new record high in 2025, driven by a recovery in output in France and Japan, and new reactors entering operation in China, India and Korea, among other countries. Nuclear energy will continue to set a new record every year thereafter."
The Paris, France-based energy agency predicted the share of low-emission electric generation will increase to 47% in 2027, up from 41% in 2024. It observed: "As the share of renewable energy sources in the electricity generation mix rises, understanding periods with reduced wind and solar PV generation due to weather conditions becomes important. While such events can potentially strain the power system, having enough dispatchable capacity and long-duration storage will be essential."
Click on the images at right to see year-over-year changes in fuels use to generate electricity on a global basis since 2019, with a projection to 2027, and the breakdown of fuels used to generate electricity globally since 2014, with a projection to 2027.
Alongside this expected increase in electricity generated by low-emitting generation around the world, however, the report also pointed out emerging economies' heavy reliance on coal-fired generation, a trend that is expected to continue. Global annual emissions of carbon dioxide (CO2) from the power sector are expected to trend sideways for the next three years, at just under 14 billion tons per year, as rising future emissions from emerging economies like China, India and Southeast Asia are expected to overwhelm predicted reductions from mature economies such as the U.S., EU, Japan and South Korea.
Here is what the agency said about historical and projected electric use in the world's major economies.
U.S.
The United States is the world's second-largest electricity consumer, after China, the report noted. U.S. electric demand fell 1.8% in 2023 but grew 2% in 2024, surpassing a record set in 2022, it said. The agency said it expected electric demand to grow at an average annual rate of 2% over the 2025-2027 period, which would be equivalent to adding the total electricity demand of California over the next three years.
The agency noted that this year's prediction is a doubling from last year's global electricity report, which forecast a 1% annual growth in U.S. electric use over the 2024-2026 period. This upward revision is largely due to higher consumption from data centers, semiconductor manufacturers, other industrial sectors and electric vehicles (EVs).
Data centers have become "a major catalyst of electricity demand growth, which will have a substantial impact on the country's energy landscape," the electricity report said.
Beyond data centers, the agency pointed to an October 2024 forecast from the International Monetary Fund (IMF) that U.S. economic growth would accelerate to 2.2% in 2025, up from a projection of 1.8% the IMF made previously. Over the 2025-2027 period, the IEA said it expected U.S. economic growth to average 2.1% per year.
China
More than half of global electricity demand growth in 2024 came from China, where it grew by 7% in 2024, similar to the previous year, the IEA said, adding that electricity demand in China is forecast to increase on average 6% annually out to 2027.
"Electricity 2025" noted that electrification is progressing rapidly in China, where the share of electricity in final energy consumption is much higher than in the United States or the European Union.
China's electricity consumption has been "growing faster than its economy since 2020, underscoring the speed at which electrification across all sectors is taking hold." Between 2022 and 2024, the industrial sector accounted for almost 50% of electricity demand growth. China's industrial sector became more electricity-intensive in recent years, with one-third of the growth in demand coming from the manufacturing of solar PV modules, batteries and electric vehicles. In 2024, these industrial sectors consumed more than 300 TWh of electricity annually--as much as Italy uses in a year.
Over the 2025-27 period, the industrial sector will continue to make up the largest share of China's demand growth, the IEA said. Electricity consumption by data centers in China could double out to 2027, though projections indicate a wide range of uncertainties, the report noted.
India
On a year-over-year basis, Indian electric demand soared 8.3% in 2023 and 5.8% in 2024, driven by strong economic growth and rising penetration of air conditioning, the report said. Looking forward, the agency predicted India's electricity use will grow at "a high" average annual rate of 6.3% over the next three years. This forecast growth will be far higher than the country's average electric growth rate of 5% for the 2015-2024 period.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Global Demand After growing 2.5% in 2023 and 4.3% in 2024, the IEA predicted global electricity demand will rise by close to 4% per year for 2025, 2026 and 2027, an unprecedented gain of 3,500 terawatt-hours (TWh), according to "Electricity 2025: Analysis and Forecast to 2027," which was released February 14. Growth of this magnitude would equate to adding more than the equivalent of a Japan to the world's electricity consumption each year.
Emerging and developing nations are expected to account for about 85% of the growth in electric demand over the 2025-2027 period, the agency said. That will continue a recent trend where electric demand growth has surged in emerging economies like China and India. Economic growth, rising use of air conditioning, growing electrification and data centers are that factors that have driven recent electric demand growth in emerging economies, the IEA report said. Those trends are expected to continue, possibly even accelerate, over the 2025-2027 period as those nations continue to grow their economies, it added.
Global Supply
The "Electricity 2025" report projected record clean energy additions to the world's electric generation systems over the 2025-27 period, coupled with a continued decline in coal use. Renewables will continue to "dominate" additions to electric generation over 2025-27, it predicted, while coal's share is expected to decline. The agency said "low-emission sources--renewables and nuclear--are expected to meet all global demand growth out to 2027."
That's a global projection, but there are wide variations in coal use in different economies. Coal use in emerging economies like China and India is expected to continue rising while its role in the U.S. and EU is expected to continue to fall. For more on that, see January 15, 2024, article - Will the World Cook or Decarbonize? Ask China, Says IEA.
Solar photovoltaic (PV) generation is set to become the second largest low-emissions source of electricity generation in the world by 2027, after hydropower, the agency said, adding: "Renewables, collectively, will surpass coal-fired generation in 2025 and coal's share will decline below 33% for the first time in the last 100 years. Nuclear generation will reach a new record high in 2025, driven by a recovery in output in France and Japan, and new reactors entering operation in China, India and Korea, among other countries. Nuclear energy will continue to set a new record every year thereafter."
The Paris, France-based energy agency predicted the share of low-emission electric generation will increase to 47% in 2027, up from 41% in 2024. It observed: "As the share of renewable energy sources in the electricity generation mix rises, understanding periods with reduced wind and solar PV generation due to weather conditions becomes important. While such events can potentially strain the power system, having enough dispatchable capacity and long-duration storage will be essential."
Alongside this expected increase in electricity generated by low-emitting generation around the world, however, the report also pointed out emerging economies' heavy reliance on coal-fired generation, a trend that is expected to continue. Global annual emissions of carbon dioxide (CO2) from the power sector are expected to trend sideways for the next three years, at just under 14 billion tons per year, as rising future emissions from emerging economies like China, India and Southeast Asia are expected to overwhelm predicted reductions from mature economies such as the U.S., EU, Japan and South Korea.
Here is what the agency said about historical and projected electric use in the world's major economies.
U.S.
The United States is the world's second-largest electricity consumer, after China, the report noted. U.S. electric demand fell 1.8% in 2023 but grew 2% in 2024, surpassing a record set in 2022, it said. The agency said it expected electric demand to grow at an average annual rate of 2% over the 2025-2027 period, which would be equivalent to adding the total electricity demand of California over the next three years.
The agency noted that this year's prediction is a doubling from last year's global electricity report, which forecast a 1% annual growth in U.S. electric use over the 2024-2026 period. This upward revision is largely due to higher consumption from data centers, semiconductor manufacturers, other industrial sectors and electric vehicles (EVs).
Data centers have become "a major catalyst of electricity demand growth, which will have a substantial impact on the country's energy landscape," the electricity report said.
Beyond data centers, the agency pointed to an October 2024 forecast from the International Monetary Fund (IMF) that U.S. economic growth would accelerate to 2.2% in 2025, up from a projection of 1.8% the IMF made previously. Over the 2025-2027 period, the IEA said it expected U.S. economic growth to average 2.1% per year.
China
More than half of global electricity demand growth in 2024 came from China, where it grew by 7% in 2024, similar to the previous year, the IEA said, adding that electricity demand in China is forecast to increase on average 6% annually out to 2027.
"Electricity 2025" noted that electrification is progressing rapidly in China, where the share of electricity in final energy consumption is much higher than in the United States or the European Union.
China's electricity consumption has been "growing faster than its economy since 2020, underscoring the speed at which electrification across all sectors is taking hold." Between 2022 and 2024, the industrial sector accounted for almost 50% of electricity demand growth. China's industrial sector became more electricity-intensive in recent years, with one-third of the growth in demand coming from the manufacturing of solar PV modules, batteries and electric vehicles. In 2024, these industrial sectors consumed more than 300 TWh of electricity annually--as much as Italy uses in a year.
Over the 2025-27 period, the industrial sector will continue to make up the largest share of China's demand growth, the IEA said. Electricity consumption by data centers in China could double out to 2027, though projections indicate a wide range of uncertainties, the report noted.
India
On a year-over-year basis, Indian electric demand soared 8.3% in 2023 and 5.8% in 2024, driven by strong economic growth and rising penetration of air conditioning, the report said. Looking forward, the agency predicted India's electricity use will grow at "a high" average annual rate of 6.3% over the next three years. This forecast growth will be far higher than the country's average electric growth rate of 5% for the 2015-2024 period.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
