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IEA Forecasts Surge in Global Power Demand, Calls for Flexible, Resilient Grids

The International Energy Agency’s (IEA) Electricity 2025 report forecasts a sharp increase in global electricity demand from 2025 to 2027, projecting a nearly 4% annual rise and a total increase of 3,500 TWh. This surge marks the advent of a new “Age of Electricity,” fueled by growing electrification in buildings, transport, and industry, as well as data center expansion and air conditioning use.

Emerging economies—especially China and India—will account for 85% of this demand growth, with China alone responsible for over half. The added demand is expected to be met largely by low-emission sources: renewables will cover 95% of the growth, with solar PV contributing half. Nuclear power is also projected to reach record generation levels.

Despite rising demand, global CO₂ emissions from electricity generation are expected to plateau due to the shift to clean energy. Coal use is predicted to stagnate, while natural gas generation is set to grow modestly, primarily in the Middle East and Asia.

The report notes mixed pricing trends—while wholesale electricity prices fell in 2024 in regions like the EU, US, UK, and India, instances of negative pricing rose, revealing growing volatility, particularly during "Dunkelflaute" (low wind and solar periods).

IEA highlights the risks posed by extreme weather and calls for increased investment in grid flexibility, dispatchable generation, and storage. It also stresses the need for updated resource adequacy assessments to ensure reliable supply amid changing demand patterns.

Key challenges include integrating variable renewables, rising grid tariffs, and balancing decarbonization goals with affordability. The report urges strategic policies and infrastructure investments to secure stable, resilient, and clean power systems globally.