Global Power Demand To Cross 30,000 TWh By 2027, Renewables Set To Surpass Coal In 2026 – Report

Global electricity demand is expected to accelerate over the next two years, rising by 3.6% in 2026 and 3.8% in 2027, compared with 3% growth recorded in 2025. Despite energy price shocks and disruption linked to the ongoing Middle East conflict and the Strait of Hormuz crisis, electricity consumption continues to increase across major economies, as per the IEA Electricity Mid-Year report 2026.

Global electricity consumption is projected to exceed 30,000 terawatt-hours (TWh) by 2027. The growth is being supported by several long-term factors, including industrial expansion, rising appliance ownership, increasing electric vehicle (EV) adoption, greater use of air conditioning and the rapid development of data centres.

China is expected to record electricity demand growth of 5.5% in 2026. Manufacturing activity and the expansion of EV infrastructure are among the major factors supporting this increase. India is also expected to see a strong recovery, with electricity demand projected to grow by 7% in 2026. This follows much slower growth of 1.6% in 2025, which was partly linked to an early monsoon that reduced demand for cooling.

In the United States, electricity demand is forecast to increase by 1.8% in 2026. The expansion of data centres, higher manufacturing activity and increased electricity use for summer cooling are expected to support demand. The European Union is also expected to record stronger demand, with consumption projected to rise by 2.1% in 2026. Electrification and heatwaves are contributing to the increase.

However, demand conditions remain challenging in some emerging economies. Countries such as Bangladesh and Pakistan, which are highly sensitive to electricity and fuel prices, have been forced to reduce electricity consumption because of elevated global fuel costs.

The global power generation mix is also undergoing a major change. In 2026, renewable energy generation is expected to surpass coal-fired generation for the first time. Renewable electricity output is forecast to increase by 8% in 2026 and another 9% in 2027. As a result, renewables are expected to account for 37% of global electricity generation by 2027, compared with 33% in 2025.

Solar PV is expected to remain the largest driver of new renewable generation. It is projected to overtake wind power in 2026 and become the world’s second-largest source of renewable electricity after hydropower. Continued growth in solar installations is being supported by falling technology costs, expanding manufacturing capacity and rising demand for clean electricity.

Nuclear power generation is also expected to increase. Its growth is projected to accelerate to more than 4% in 2027 as new nuclear capacity comes online, particularly in China and India.

At the same time, the energy crisis around the Strait of Hormuz is affecting the global power sector. The disruption temporarily removed almost 20% of global liquefied natural gas (LNG) supply from the market, creating significant volatility in natural gas prices across Europe and Asia. Higher gas prices encouraged several countries to shift from gas-fired generation to coal to maintain electricity supply.

As a result, global gas-fired power generation is expected to remain almost flat in 2026, while coal-fired generation could increase by 1.4% temporarily. The rise in coal generation is also expected to push carbon dioxide emissions from the power sector up by around 1% in 2026, before emissions plateau in 2027.

Higher gas prices have also affected electricity markets. Wholesale electricity spot prices increased by more than 30% year-on-year during the second quarter of 2026 in the European Union and Japan. The United States experienced less pressure because of its access to relatively inexpensive domestic natural gas.

Australia recorded a different trend, with wholesale electricity prices falling by about 45%. Rapid growth in renewable generation and battery energy storage helped meet demand spikes and reduced pressure on the electricity market.

These differences highlight the growing importance of flexible power systems. As renewable energy penetration increases and electricity demand rises, grids will require greater flexibility to manage changing supply and demand. Battery energy storage, demand response, stronger transmission networks and improved grid management are therefore expected to become increasingly important in maintaining reliable electricity supplies while supporting the global transition toward cleaner power generation.