According to a new report released on Friday by the International Energy Agency (IEA), the world’s demand for electricity is rising at its fastest rate in years due to strong economic growth, extreme heat waves, and the growing uptake of electricity-powered devices like heat pumps and electric vehicles (EVs). Demand for electricity in India is predicted to soar by an astounding 8% this year.
Renewable energy sources are still rising quickly, with solar photovoltaics poised to break all previous records.
The IEA’s Electricity Mid-Year Update indicates that the world’s demand for electricity is expected to increase by approximately 4% in 2024, up from 2.5% in 2023.
Taking into account the extraordinary recoveries observed in the wake of the global financial crisis and the Covid-19 outbreak, this would indicate the highest yearly growth rate since 2007.
The analysis predicts that the worldwide electricity consumption trend will continue to grow at a rate of about four percent until 2025. 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. During 2024 and 2025, solar PV alone is predicted to supply around half of the increase in the world’s electricity demand; solar and wind combined are estimated to supply up to three-quarters of the 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.
But there are still a lot of unknowns: From its 2023 low, Chinese hydropower production rebounded significantly 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 heat waves.
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 US is expected to see a 3% increase in energy demand this year due to consistent economic growth, increased cooling demand, and the expansion of the data center industry, after 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. According to the paper, there were severe heat waves in several areas during the first half of 2024, which increased demand and stressed the electrical grid.
According to Keisuke Sadamori, Director 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 heat waves.”
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 growing prominence of Artificial Intelligence (AI) has brought more attention to the electrical requirements of data centers, 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.
