IEA forecasts global electricity demand rising 3.3% in 2025, 3.7% in 2026
The IEA's Electricity Mid-Year Update projects global electricity demand rising 3.3% in 2025 and 3.7% in 2026, with renewables set to overtake coal by 2025 or 2026. China and India are forecast to drive 60% of global growth, underscoring grid and storage investment pressures for Indian power planners.
The International Energy Agency's Electricity Mid-Year Update forecasts global electricity demand rising 3.3% in 2025 and 3.7% in 2026, more than twice the rate of total energy demand and above the 2015-2023 average of 2.6%. Growth is driven by industrial electrification, appliances, data centres, air conditioning, and electric vehicles. Renewables are projected to overtake coal as the largest electricity source as early as 2025 or 2026, while nuclear generation reaches record highs from reactor restarts in Japan and stable output in the US and France.
Emerging Asian economies remain the demand epicentre, with China and India expected to contribute 60% of global electricity growth through 2026. China's demand is projected to rise 5% in 2025 and 5.7% in 2026, while India's grows from 4% to 6.6%. The EU is estimated to grow only 1% in 2025, and the US above 2% driven by AI-enabled data centres. Wholesale power prices surged 30-40% in the EU and US in the first half of 2025 amid global gas market tightening.
IEA Director Keisuke Sadamori stressed that significant investment in grids, storage, and flexibility is essential to meet future demand securely and affordably. Electricity-related CO2 emissions are forecast to plateau in 2025 and slightly decline in 2026, though vulnerable to economic shifts and climate variability. Policymakers and ESG stakeholders should align energy security with affordability, invest in flexible systems and storage, and monitor rising negative wholesale pricing events signalling urgency for responsive market mechanisms amid rapid technological and climate changes.
Key figure — Demand growth: global electricity rising 3.3% in 2025 and 3.7% in 2026 (IEA)
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