Economic growth, higher demand for cooling amid heat waves, the rapid rise of data centers, and continued electrification are set to push the growth in global electricity demand to one of the highest paces in the past 20 years in 2024 and 2025, the International Energy Agency (IEA) said on Friday.
Electricity demand is set for growth of about 4% globally this year, higher than the 2.5% growth last year, the IEA’s Electricity Mid-Year Update report showed.
The expected growth this year would be the highest since 2007, excluding the rebound following the 2008 financial crisis and COVID.
Next year, global electricity growth is also set for a strong pace of another 4% increase, the IEA reckons.
While renewables are rapidly advancing and boosting electricity consumption worldwide, high demand for cooling will keep coal consumption high, according to the Paris-based agency, which advocates for a faster energy transition.
Coal-fired power generation is set to remain resilient this year, due to strong electricity demand growth, which would lead to a slight increase in the emissions from the global power sector, the IEA said.
“Despite the rapid growth of renewables, the brisk increase in electricity consumption, especially in China and India, is resulting in the use of more coal-fired generation to meet demand,” the agency said in the report.
Global coal-fired power generation is expected to increase by less than 1% in 2024, but this is highly dependent on hydropower trends, especially in China, according to the IEA.
Regionally, electricity demand in the United States is set to rebound significantly in 2024, rising by 3% year-on-year, thanks to an improved economic outlook, rising demand for air conditioning, and the surge in data center expansions. U.S. power demand is forecast to rise by 1.9% in 2025.
China’s electricity demand is set for 6.5% growth in 2024, similar to its average rate between 2016 and 2019, while India, the world’s fastest-growing major economy, is expected to see an 8% rise in electricity consumption in 2024, matching the rapid growth from last year.
By Charles Kennedy for Oilprice.com
