The International Energy Agency (IEA) has reported that global electricity demand is growing at a strong pace through the end of the decade, driven by industrial expansion, accelerating electrification, and the rapid growth of data centres.
The IEA’s latest outlook, Electricity 2026, projects that global power demand will rise by more than 3.5 percent a year on average through 2030, significantly outpacing overall energy demand. The shift reflects the ‘Age of Electricity,’ as economies rely more heavily on power to fuel growth, technology, and daily life.
Rising electricity use in manufacturing, the continued adoption of electric vehicles, greater demand for cooling, and the expansion of data centers and artificial intelligence are expected to be the main drivers.
While emerging and developing economies will account for most of the growth, advanced economies are also seeing electricity demand rebound after more than a decade of stagnation, contributing a sizeable share of the overall increase.
On the supply side, the report highlights a rapid transformation of the global power mix. Electricity generation from renewables, led by record levels of solar deployment, is now poised to overtake coal.
Nuclear power output has also reached a new high, reinforcing the momentum behind low-emissions generation. By 2030, renewables and nuclear combined are expected to account for half of global electricity production, up sharply from current levels.
Natural gas remains part of the picture, with gas-fired power generation set to expand, particularly in the United States and the Middle East, where gas continues to replace oil in power generation. Coal, by contrast, is expected to lose further ground globally as cleaner sources expand, with coal-fired output falling back to levels last seen earlier in the decade. As a result, global carbon emissions from electricity generation are projected to remain broadly stable through 2030.
The IEA cautions that rising demand and a more weather-dependent power system will place increasing pressure on electricity grids. Thousands of gigawatts of renewable energy, storage, and large-scale demand projects are currently stuck in grid connection queues worldwide. Faster grid expansion, regulatory reform, and the deployment of grid-enhancing technologies could unlock a significant portion of this capacity in the near term.
According to the report, investment in grids will be critical, with annual spending needing to rise sharply by the end of the decade to keep pace with demand and ensure system reliability. Strengthening flexibility, resilience, and security will also be essential as power systems face growing risks from extreme weather, aging infrastructure, and cyber threats.
The report also flags affordability as a growing concern. Electricity prices in many countries have risen faster than household incomes in recent years, while higher power costs are weighing on businesses and industry. Policymakers, the IEA notes, are increasingly focused on market reforms that balance investment with efficiency and consumer protection.
