IEA forecast 4% growth in global electricity demand on robust economic growth
Efe Tega
A new report projects that global electricity demand is expected to grow by around 4 per cent in 2024, up from 2.5 per cent in 2023.
According to the International Energy Agency’s Electricity Mid-Year Update, growth in demand in 2024 and 2025 is forecast to be among the highest levels in the past two decades, with solar PV alone expected to meet half of the increase.
The energy agency stated that global demand for electricity is rising at its fastest rate in years, driven by robust economic growth, intense heatwaves and increasing uptake of technologies that run on electricity such as EVs and heat pumps.
At the same time, renewables continue their rapid ascent, with solar PV on course to set new records, it added.
The report stated that “This would represent the highest annual growth rate since 2007, excluding the exceptional rebounds seen in the wake of the global financial crisis and the Covid-19 pandemic. The strong increase in global electricity consumption is set to continue into 2025, with growth around 4% again, according to the report.
“Renewable sources of electricity are also set to expand rapidly this year and next, with their share of global electricity supply forecast to rise from 30% in 2023 to 35% in 2025. The amount of electricity generated by renewables worldwide in 2025 is forecast to eclipse the amount generated by coal for the first time. Solar PV alone is expected to meet roughly half of the growth in global electricity demand over 2024 and 2025 – with solar and wind combined meeting as much as three-quarters of the growth.”
Despite the sharp increases in renewables, the report noted that global power generation from coal is unlikely to decline this year due to the strong growth in demand, especially in China and India. As a result, carbon dioxide (CO2) emissions from the global power sector are plateauing, with a slight increase in 2024 followed by a decline in 2025.
“However, considerable uncertainties remain: Chinese hydropower production recovered strongly in the first half of 2024 from its 2023 low. If this upward trend continues in the second half of the year, it could curb coal-fired power generation and result in a slight decline in global power sector emissions in 2024.
“Some of the world’s major economies are registering particularly strong increases in electricity consumption. Demand in India is expected to surge by a massive 8% this year, driven by strong economic activity and powerful heatwaves. China is also set to see significant demand growth of more than 6%, as a result of robust activity in the services industries and various industrial sectors, including the manufacturing of clean energy technologies.
“After declining in 2023 amid mild weather, electricity demand in the United States is forecast to rebound this year by 3% amid steady economic growth, rising demand for cooling and an expanding data centre sector. By contrast, the European Union will see a more modest recovery in electricity demand, with growth forecast at 1.7%, following two consecutive years of contraction amid the impacts of the energy crisis.
“In many parts of the world, increasing use of air-conditioning will remain a significant driver of electricity demand. Multiple regions faced intense heatwaves in the first half of 2024, which elevated demand and put electricity systems under strain, the report finds.
“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. It’s encouraging to see clean energy’s share of the electricity mix continuing to rise, but this needs to happen at a much faster rate to meet international energy and climate goals.
“At the same time, it’s crucial to expand and reinforce grids to provide citizens with secure and reliable electricity supply – and to implement higher energy efficiency standards to reduce the impacts of increased cooling demand on power systems.” said Keisuke Sadamori, IEA Director of Energy Markets and Security.
