According to a new IEA research, the world’s demand for electricity is growing at its quickest rate in years due to strong economic growth, extreme heatwaves, and the growing adoption of energy-powered devices like heat pumps and electric vehicles. Global power consumption is expected to rise by roughly 4% annually through 2025, continuing its strong upward trend.
Approximately 4% of the world’s electricity demand is expected to grow in 2024, up from 2.5% in 2023, according to the IEA’s Electricity Mid-Year Update. With the exception of the remarkable recoveries observed in the wake of the COVID-19 epidemic and the global financial crisis, this would indicate the highest yearly growth rate since 2007.
Renewable energy sources are still rising quickly, with solar photovoltaics poised to break all previous records.
The amount of electricity generated from renewable sources is also expected to increase significantly this year and the following year, rising from 30% in 2023 to 35% in 2025 as a percentage of the world’s total electrical supply. Globally, the quantity of power produced by renewables is expected to surpass that of coal for the first time in 2025. According to the research, solar and wind power combined will be able to supply up to 75% of the increase in global electricity demand between 2024 and 2025, with solar PV accounting for about half of that rise.
The report states that even with the notable rise in renewable energy, the world’s coal-based power generation is not expected to decrease this year because of the robust growth in demand, particularly in China and India. Consequently, the worldwide power sector’s carbon dioxide (CO2) emissions are plateauing, showing a minor increase in 2024 and a drop in 2025. Though there are still a lot of unknowns, Chinese hydropower production rebounded well from its 2023 low in the first half of 2024. If the second part of the year sees this upward trend continue, coal-fired power output may be curtailed, which would lead to a modest decrease in global power sector emissions in 2024.
Electricity consumption is rising at a particularly rapid rate in a few of the world’s largest economies. India’s demand is predicted to soar by an astounding 8% this year because to robust economic growth and intense heatwaves. Due to strong expansion in the services sector and other industrial areas, such as the production of clean energy technology, China is also expected to witness significant demand increase of more than 6%.
The United States’ power usage is expected to rise by 3% this year due to stable economic development, increased cooling demand, and an expanding data center industry, following a decline in 2023 due to mild weather.
In contrast, after two years of decline due to the effects of the energy crisis, the European Union is expected to witness a more gradual rebound in the demand for electricity, with growth estimated at 1.7%.
The growing usage of air conditioning will continue to be a major factor in the demand for power in many parts of the world. The first half of 2024 saw severe heatwaves in several areas, which increased demand and stressed the electrical grid, according to the research.
According to Keisuke Sadamori, head of energy markets and security at the IEA, “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.” The fact that the proportion of clean energy in the electrical mix is increasing is good, but in order to reach global energy and climate targets, this growth must occur considerably more quickly. In order to give residents a safe and dependable supply of electricity, it is imperative that networks be strengthened and expanded. Additionally, stricter energy efficiency regulations must be put in place in order to lessen the effects of rising cooling demand on power systems.
The increasing demand for power from data centers due to artificial intelligence (AI) is bringing more attention to this issue and highlighting the need for improved stocktaking procedures and more dependable data. The paper identifies a number of unknowns related to data center electricity consumption, such as deployment speed, the variety and growth of AI applications, and the possibility of increased energy efficiency. To accurately identify historical advances and gain a better understanding of future trends, it will be imperative to collect electricity consumption data from the data center sector more effectively.
When it comes to researching the connections between digitalization and the energy industry, the IEA has led the way. Energy for AI & AI for Energy is a significant new program that the IEA has initiated to investigate the opportunities and challenges that lie ahead. The IEA will confer with government agencies, business leaders, academics, and professionals from civil society as part of this endeavor. The Global Conference on Energy and AI, which will take place in Paris on December 5, 2024, will be a significant turning point.
