IEA sees global electricity demand rising more than 3.5% annually through 2030

By Romel S. Gurky

Global electricity demand is expected to grow by more than 3.5 percent per year on average through 2030, driven by industrial expansion, electric vehicle adoption, higher cooling demand, and the growth of data centers and artificial intelligence, according to the International Energy Agency’s latest report, Electricity 2026, released on Feb. 6.

The report projects that electricity demand will increase at least 2.5 times faster than overall energy demand during the period, with emerging and developing economies accounting for most of the growth. Consumption in advanced economies is also rising after more than a decade of stagnation and is expected to contribute about one fifth of the increase in global power demand.

To meet rising consumption, electricity generation from renewables, natural gas, and nuclear energy is all forecast to expand. Renewable generation, supported by strong solar photovoltaic deployment, is in the process of overtaking coal-fired generation after reaching near parity in 2025. By the end of the decade, renewables and nuclear combined are projected to supply about 50 percent of global electricity, up from around 42 percent currently.

Natural gas-fired generation is also expected to grow through 2030, particularly in the United States and the Middle East, while coal-fired output is projected to decline globally and return to around 2021 levels by the end of the decade. Global carbon dioxide emissions from electricity generation are forecast to remain broadly flat over the same period.

The IEA said the growth in demand and the increasing share of weather-dependent generation will require expanded investment in power grids and system flexibility. Annual spending on electricity networks needs to rise by about 50 percent by 2030 to support the expansion of generation capacity and maintain reliability.

Read also: IEA: Investment in next-generation geothermal is surging. Policies are key to further growth

More than 2,500 gigawatts of projects, including renewable energy, storage, and large electricity consumers such as data centers, are currently waiting for grid connection worldwide. The report estimates that deploying grid-enhancing technologies and regulatory reforms could enable up to 1,600 gigawatts of queued projects to be integrated more quickly.

Utility-scale battery storage deployment has increased rapidly in markets including California, Germany, Texas, South Australia, and the United Kingdom, providing additional short-term system flexibility.

The report also notes that electricity affordability remains a concern in many countries, where household tariffs have risen faster than incomes since 2019. The IEA said policymakers are increasingly focused on market and regulatory measures that improve efficiency while supporting investment across generation, networks, and demand-side management.

It also highlighted the need to strengthen power system security and resilience as grids face risks from aging infrastructure, extreme weather, and cyber threats.

Editing by Alexander Ginting