Global electricity consumption set to surge while Europe lags
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The world’s electricity consumption is forecast to rise at its fastest pace in recent years, with a large chunk of the demand coming from China and the US. However, the forecast for Europe is a lot less robust.
The IEA’s latest report, Electricity 2025, predicts that global electricity consumption will grow at close to 4% annually through 2027, with the surge in power demand driven chiefly by the increased use of air conditioning, EVs and the expansion of data centres, as economies embrace AI and chip production increases.
However, the forecast is a little more conservative across the pond, with Europe expected to only reach 2021’s pre-energy crisis consumption levels by 2027. Also, industrial electricity consumption has roughly remained flat according to the IEA, with growth in the primary materials and chemicals sector offset by the machinery and automotive sectors.
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As expected, emerging and developing economies will account for a large chunk of this growth, 85%, with China, India and South East Asia taking the lead.
China’s electricity consumption is expected to grow by around 6% through 2027, fuelled by industrial activities and manufacturing, as well as EVs, data centres and 5G network roll outs. Electrification is progressing rapidly in China, where the share of electricity in final energy consumption (28%) is much higher than in the United States (22%) or the European Union (21%).
However, the IEA also predicts increased consumption in advanced economies, marking a change from the relatively flat growth rate noted recently.
In the US, manufacturing, building and data centre sectors will be the major drivers of demand. The IEA highlights that US electricity demand is expected to add the equivalent of California’s current power consumption to the national total over the next three years.
IEA director of Energy Markets and Security Keisuke Sadamori commented in a statement: “The acceleration of global electricity demand highlights the significant changes taking place in energy systems around the world and the approach of a new Age of Electricity. But it also presents evolving challenges for governments in ensuring secure, affordable and sustainable electricity supply.
“While emerging and developing economies are set to drive the large majority of the growth in global electricity demand in the coming years, consumption is also expected to increase in many advanced economies after a period of relative stagnation. Policy makers need to pay close attention to these shifting dynamics, which will be addressed at the international Summit on the Future of Energy Security that the IEA is hosting with the UK government in London in April.”
According to the report, the increased demand will be largely met by renewables and nuclear power, with solar PV forecast to meet roughly half of global electricity demand growth through 2027. The IEA suggests that the growth of low-emissions sources will see carbon dioxide emissions from global electricity generation plateau in the coming years after increasing by about 1% in 2024.
The report however did emphasise the need for greater resilience in electricity systems, as extreme weather and droughts become more commonplace.
Also, the report highlighted the rising trend of negative electricity prices, which demonstrates a lack of flexibility in the system due to technical, regulatory or contractual reasons. This should encourage more effective use of demand response strategies and storage.
Originally published on Power Engineering International.
