The Age of Electricity: IEA Forecasts Surge in Global Demand Driven by AI and Electrification

The International Energy Agency (IEA) has signaled the dawn of a transformative era, labeling the upcoming period as the "Age of Electricity." According to the agency’s latest projections, global electricity consumption is poised for a phase of rapid acceleration. Between 2026 and 2030, the annual growth in demand is expected to reach 3.6%, a rate that is roughly 2.5 times faster than the growth seen in total energy consumption. This structural evolution is being propelled by the widespread electrification of vital sectors, including the industrial landscape, the transport sector through electric vehicles, and residential heating via heat pumps. Furthermore, the exponential rise of data centers and the burgeoning field of artificial intelligence (AI) are acting as significant catalysts for this surge.

Looking at recent trends, the global appetite for power saw a notable 4.4% increase in 2024, driven largely by extreme weather conditions and robust industrial output. While a slight moderation to 3% growth is anticipated for 2025, the subsequent years leading up to 2030 are expected to maintain a more vigorous and consistent momentum. Developing nations are set to be the primary engines of this expansion, contributing approximately 80% of the additional electricity demand by the end of the decade. China remains the central figure in this narrative, projected to account for nearly half of the global increase, with an average annual growth rate of 4.9% from 2026 to 2030.

Interestingly, developed economies like the United States and the European Union are witnessing a reversal of a long-term trend. After nearly 15 years of stagnant electricity usage, these regions are entering a new growth phase with an average annual increase of about 2% through 2030. In the United States specifically, the expansion of data centers is a critical factor, expected to represent roughly half of the country's total demand growth for the remainder of the decade. This shift highlights the profound impact that digital infrastructure is having on national energy profiles across the globe.

On the supply side, the IEA envisions a radical transformation of the global energy mix. By 2030, it is estimated that renewable energy sources and nuclear power will combinedly generate 50% of the world's electricity, a significant jump from the current 42%. The rapid deployment of solar photovoltaic systems is a major driver here, with renewables expected to surpass coal-fired generation as early as 2025 or 2026. This transition marks a historic milestone, effectively signaling the "peak coal" era on a global scale. The annual increase in renewable capacity is projected to be around 1,000 terawatt-hours (TWh) through 2030, with solar energy alone contributing more than 600 TWh of that total.

Despite the massive uptick in consumption fueled by electrification and digital expansion, the IEA suggests that carbon dioxide emissions from power generation will likely remain flat. This stagnation occurs because the rise in emissions in certain developing regions will be offset by substantial declines in others. Fatih Birol, the Executive Director of the IEA, has highlighted the sheer scale of this demand, noting that a single average data center can consume as much electricity as 100,000 households. This reality underscores the urgent need for infrastructure upgrades to maintain system reliability and integrate new capacity.

To meet these challenges, the IEA emphasizes that global investment in electrical grids must increase by approximately 50%. Currently, there is a massive bottleneck in the energy transition, with roughly 2,500 gigawatts (GW) of power projects worldwide waiting for grid connections. Addressing this backlog is essential for creating a more flexible and resilient network capable of supporting the "Age of Electricity." Without significant expansion and modernization of grid infrastructure, the transition to a cleaner and more electrified global economy could face substantial delays.