Global Electricity Consumption on the Rise: Data Centers and Electric Vehicles Drive Demand

The demand for electricity is set to surge globally, driven by the increasing energy needs of emerging economies, the growing electrification of various sectors, and the expansion of data centers and electric vehicles (EVs). According to the International Energy Agency (IEA), the global electricity consumption is projected to rise by nearly four percent annually until 2027.

This significant increase is attributed primarily to the heightened use of electricity in industrial production, the rising demand for air conditioning, and the ongoing transition towards electrification, particularly in the transportation sector. Emerging markets are expected to account for 85 percent of this additional demand.

In China, the trend is particularly pronounced, with electricity consumption growing at a pace that outstrips the overall economic growth since 2020. In 2024, China's electricity demand surged by seven percent, and it is anticipated to grow at an average of approximately six percent per year through 2027. The rapid expansion of electricity-intensive manufacturing sectors, such as solar panels, batteries, and electric vehicles, along with the rollout of 5G networks and data centers, significantly contributes to this demand.

In the European Union, electricity demand is rebounding from recent economic slowdowns, though it is not expected to return to pre-pandemic levels until after 2027. The demand growth of 1.4 percent recorded in 2024 was largely driven by residential and commercial sectors, particularly due to increased use of heat pumps and electric vehicles.

The IEA posits that the growth of low-emission energy sources, especially renewable energy and nuclear power, will be sufficient to meet the anticipated rise in global electricity demand over the next three years. It is expected that photovoltaic energy production will cover approximately half of the anticipated increase in demand. In 2024, electricity generation from solar sources surpassed that from coal in the EU, with solar energy accounting for over 10 percent of the electricity mix.

Meanwhile, nuclear energy is expected to experience a resurgence, with its production likely to reach record levels by 2027. This rebound is driven by the recovery of nuclear power generation in France, the restarting of reactors in Japan, and the launch of new plants in China, India, South Korea, and other nations. There is a renewed global interest in nuclear power, emphasizing its role as a stable backbone in low-emission energy systems.

Despite the increasing reliance on low-emission energy, the IEA forecasts no reduction in the use of fossil fuels through 2027. Global coal generation is expected to stagnate, counterbalanced by rising coal consumption in India and Southeast Asia, despite declines in Europe and the U.S. Similarly, natural gas generation is projected to grow steadily by about one percent annually until 2027.

As the use of low-emission energy sources rises, carbon dioxide emissions from global electricity generation are expected to stabilize in the coming years after a one percent increase in 2024. However, with emissions from electricity generation remaining the highest among all sectors, the focus on sustainable energy solutions continues to gain urgency.