By Forrest Crellin

Global Electricity Demand Growth

PARIS (Reuters) – Global electricity demand is set to grow at its fastest pace in nearly 20 years this year, spurred by increasing demand for air conditioning as temperatures rise, according to a report from the International Energy Agency (IEA) released on Friday.

The trend is expected to continue into 2025, supporting ongoing use of coal power, even as renewable energy production increases.

Air Conditioning as a Key Driver

The rise in air conditioning usage is anticipated to be the primary driver of demand growth, following a year of record global temperatures and severe heatwaves that have pushed grids to rely on a reliable but dirtier baseload supply from coal.

“Growth in global electricity demand this year and next is set to be among the fastest in the past two decades, highlighting the growing role of electricity in our economies, as well as the impacts of severe heatwaves,” said Keisuke Sadamori, IEA Director of Energy Markets and Security.

Attention on AI Demand

Rising electricity demand driven by artificial intelligence (AI) is drawing attention to demand patterns from data centers, prompting questions about deployment, demand projections, and energy efficiency, the IEA reported.

Forecast for Global Power Consumption

Global power consumption is expected to grow by around 4% in 2024, marking the largest growth rate since 2007, with a similar pace anticipated in 2025, compared to a 2.5% increase in 2023, according to IEA data.

• India is projected to lead in demand growth, with an increase of about 8% in 2024.
• China is estimated to register a 6% growth rate, down 1% from 2023 as its economy continues to restructure.
• The European Union is expected to rebound from two years of contraction with a growth rate of 1.7%, although uncertainty remains about future pace.
• The United States is projected to rebound by 3% after a decline in 2023 due to mild weather.

Renewable Energy Growth

Renewable energy production is expected to rise in the coming years, with its total share of global supply anticipated to reach 35% in 2025, a 5% increase from 2023, leading to solar and wind surpassing hydropower in the global energy mix.

Total renewable generation is forecasted to exceed coal-fired electricity output in 2025; however, coal is expected to remain resilient in 2024, with marginal growth of less than 1%, depending on hydropower outputs, especially in China.

As a result, carbon emissions from the global power sector are plateauing, with slight growth expected this year before a decrease in 2025, according to the IEA.