Global Electricity Demand To Rise By 4% In 2024 And 2025: Report Highlights Major Growth And Renewable Contributions

The International Energy Agency (IEA) has released its Electricity Mid-Year Update, forecasting a robust increase in global electricity demand over the next two years. The report predicts that demand will rise by approximately 4% in both 2024 and 2025, marking the highest growth rates seen in nearly two decades. This surge is largely attributed to strong economic activity, intense heat waves, and the growing use of electric technologies, such as electric vehicles (EVs) and heat pumps.

Renewable energy sources are expected to meet a significant portion of this increased demand. Solar photovoltaic (PV) systems alone are projected to account for half of the global demand growth over the next two years, with renewables collectively covering up to 75% of the increase. By 2025, renewables are anticipated to generate more electricity than coal for the first time.

Despite the expansion of renewable energy, coal power generation is unlikely to decline significantly in 2024 due to heightened demand, particularly in China and India. As a result, carbon dioxide emissions from the power sector are expected to plateau, with a slight increase in 2024 followed by a reduction in 2025, depending on factors such as Chinese hydropower recovery.

India and China are forecasted to experience the most substantial increases in electricity demand, with India’s demand rising by 8% and China’s by over 6%. In contrast, the United States will see a 3% rebound in electricity demand, while the European Union’s growth will be more modest at 1.7%.

The IEA emphasizes the need for rapid expansion of clean energy sources and grid infrastructure to meet international climate goals and ensure reliable electricity supply. Additionally, the agency highlights the growing significance of data centers and artificial intelligence (AI) in driving electricity demand and calls for improved data collection and energy efficiency measures.

The IEA’s new initiative, “Energy for AI & AI for Energy,” aims to address these challenges and explore the intersection of energy and digitalization. A key event, the Global Conference on Energy and AI, will be held in Paris on December 5, 2024, to further discuss these issues.