Our World Faces 'unprecedented' Spike In Electricity Demand

The world is going to need a lot of new electricity generation in the next three years to keep up with an "unprecedented" spike in demand, says the International Energy Agency (IEA) – and it's going to be a tough goal to meet. 

The IEA's report examines the current state of the electricity market and how it's likely to change between 2025 and 2027, forecasting that the world is going to need an additional 3,500 terawatt-hours of energy generation to meet rising demand over the next three years. That, the IEA noted, is the equivalent of adding more electricity consumption than Japan, per year, between now and 2027.

To put that into further perspective, Japan is the fifth largest consumer of electricity in the world, eating up more than 1,000 TWh of electricity per year. That's a lot of juice to add to global energy generation in a mere three years, and most of that is going to be in emerging markets, the IEA said.

National energy consumption in terawatt hours – click to enlarge

"While emerging and developing economies are set to drive the large majority of the growth in global electricity demand in the coming years, consumption is also expected to increase in many advanced economies after a period of relative stagnation," said Keisuke Sadamori, the IEA's director of energy markets and security.

The IEA attributed relative stagnation in advanced economies in recent years to increased efficiency of appliances, tech, and things like lightbulbs, but guess what's coming to unseat all of that? 

Datacenters – as El Reg readers could likely have guessed – but AI and increased computing needs aren't solely to blame.

There's also increased air conditioning use in emerging economies as access expands to places like India, where climate change has hit hard and threatens the economy. The European Union, meanwhile, is beginning to emerge from an energy slowdown through increased use of heat pumps and electric vehicles, along with its own datacenter explosion.

To meet all those demands, the IEA says industrial production will also need to expand significantly, and that means even more energy being eaten up to produce everything from chips to EV chargers to air conditioning components.

Renewables to the rescue?

We've already seen signs that cleaner forms of energy are being sought to address the growing need to power datacenters and other large manufacturing projects, with everything from next-gen small modular reactors being planned to old shuttered nuclear plants being brought back online to meet demand.

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Nuclear – along with renewables like wind, solar, and hydropower – will actually be able to meet 95 percent of the demand the IEA forecasts out to 2027, the agency said.

In 2025 alone, the IEA predicts renewable energy sources will provide more than a third of global electricity generation, overtaking coal around the world. That milestone was already met in the United States last year, but with an important caveat: Natural gas still reigns supreme, and its dominance meant that despite the rise of renewables, the US reduced emissions by just 0.2 percent – far less than what's needed to meet clean energy goals.

Still, in the parts of the world where the IEA's projected energy usage spike will be highest – like China, which accounted for more than half of global electricity demand in 2024 – renewables are predicted to meet around 90 percent of new electricity demand in coming years.

If renewables follow the IEA's predictions, it believes global CO₂ emissions will plateau in the next three years, but that doesn't mean all is well and good when it comes to meeting those skyrocketing energy demands.

The report finds that changing weather patterns causing strain on electrical systems could be a serious problem in the coming years, and that could make renewables a less resilient option than is needed in a changing climate.

Blackouts, droughts, severe winter storms in regions that don't typically experience them, and a warming planet have caused electricity price volatility, which could hamstring development of energy sources that meet demand without making the problem worse.

"These occurrences broadly signal insufficient flexibility in the system due to technical, regulatory, or contractual reasons," the IEA said. 

In short, the world has an intense few years of electrification ahead of it, and there's no guarantee things will go smoothly enough to keep the global economy ticking along without interruption. ®