Global Electricity Demand to Surge Over 3.5% Annually Through 2030, Says IEA Report

Global electricity demand is projected to grow by more than 3.5% annually for the rest of the decade, driven by rapid electrification across industries, transport, buildings, and digital infrastructure, according to the International Energy Agency’s (IEA) latest report, Electricity 2026.

The annual flagship report provides a comprehensive assessment of global electricity markets, recent policy developments, and forecasts for electricity demand, supply, and carbon dioxide (CO₂) emissions through 2030. It finds that electricity demand will grow at least 2.5 times faster than overall energy demand, signalling the accelerating transition into what the IEA describes as the “Age of Electricity.”

The surge is being fuelled by rising industrial electrification, increasing adoption of electric vehicles, higher air-conditioning usage, and the rapid expansion of data centres and artificial intelligence (AI) infrastructure. While emerging and developing economies continue to lead demand growth, advanced economies are also seeing renewed increases after 15 years of stagnation, accounting for nearly 20% of the total rise in global power demand by 2030.

On the supply side, renewable energy generation — propelled by record installations of solar photovoltaic (PV) capacity — is set to overtake coal-fired power generation, after reaching near parity in 2025. Nuclear power output has also climbed to a new record, reinforcing the momentum of low-emission energy sources. By 2030, renewables and nuclear combined are expected to generate 50% of global electricity, up from 42% currently.

Natural gas-fired power generation is also forecast to grow, supported by increasing electricity demand in the United States and the ongoing shift from oil to gas in power generation across the Middle East. Meanwhile, coal-fired electricity generation is projected to decline globally, returning to 2021 levels by the end of the decade. As a result, global CO₂ emissions from electricity generation are expected to remain broadly flat through 2030.

The report underscores the urgent need to expand and modernise electricity grids to accommodate growing demand and a more weather-dependent generation mix. More than 2,500 GW of renewable energy, storage, and large-load projects, including data centres, are currently stalled worldwide due to grid connection bottlenecks.

According to the IEA, deploying grid-enhancing technologies and regulatory reforms could unlock up to 1,600 GW of stalled projects in the near term, significantly improving system efficiency and accelerating energy transitions.

“At a moment of significant uncertainty across energy markets, one certainty is that global electricity demand is growing much more strongly than it did over the past decade,” said Keisuke Sadamori, IEA Director of Energy Markets and Security. “Meeting this demand will require annual investment in electricity grids to rise by 50% by 2030, alongside a strong focus on flexibility, security, and resilience.”

The report also highlights the rapid growth of utility-scale battery storage installations, which are enhancing grid flexibility in markets such as California, Germany, Texas, South Australia, and the United Kingdom.

However, the IEA warns that electricity affordability remains a major concern, with household power prices in many countries rising faster than incomes since 2019. Elevated prices are also putting pressure on industries, prompting policymakers to focus on market reforms and efficiency-driven investments across the electricity value chain.

Additionally, the report stresses the importance of strengthening power system security and resilience amid growing risks from ageing infrastructure, extreme weather events, cyber threats, and operational vulnerabilities. Modernising grid operations and reinforcing critical infrastructure protection will be essential to ensuring reliable electricity supply in the years ahead.