- Global electricity demand expected to grow more than 3.5% annually through 2030, driven by AI, EV adoption, industrial electrification, and cooling needs
- Renewables and nuclear projected to supply 50% of global electricity by decade’s end as coal declines and natural gas expands
- IEA warns grid investment must rise by 50% by 2030 to unlock 1,600 gigawatts of stalled clean energy and data center projects
Age Of Electricity Accelerates Global Demand
Global electricity demand is entering a period of sustained expansion that is reshaping energy markets, investment priorities, and climate strategies worldwide. According to Electricity 2026, the International Energy Agency’s latest annual outlook, global power consumption is forecast to grow by more than 3.5% each year through 2030, outpacing broader energy demand by a wide margin.
The IEA describes a structural shift driven by industrial electrification, the rapid growth of electric vehicles, rising air-conditioning use, and the expansion of data centres and artificial intelligence infrastructure. Emerging and developing economies remain the primary drivers of demand growth, but advanced economies are also returning to consumption growth after more than a decade of stagnation. The report estimates that advanced markets will account for roughly one fifth of new electricity demand through the end of the decade.
“At a moment of significant uncertainty across energy markets, one certainty is that global electricity demand is growing much more strongly than it did over the past decade. In this Age of Electricity, the increase in global power consumption through 2030 is set to be equivalent to adding more than two European Unions,” said IEA Director of Energy Markets and Security Keisuke Sadamori. “Meeting this demand will require annual investment in grids to rise by 50% by 2030. Expanding flexibility will also be crucial as power networks continue to evolve – so will a strong focus on security and resilience.”
Renewables, Nuclear Rise While Coal Retreats
The IEA expects a continued transformation in the global power mix. Renewables, led by record solar PV deployment, are on track to overtake coal generation after reaching near parity in 2025. Nuclear output has already reached a new record, and together, renewables and nuclear are projected to supply half of global electricity by 2030, up from 42% today.
Natural gas generation is also forecast to expand, particularly in the United States and across the Middle East as oil-fired generation declines. Coal generation is expected to fall back to 2021 levels by the end of the decade. Despite rapid growth in demand, emissions from electricity generation are projected to remain broadly flat through 2030, reflecting the increasing share of low-emissions energy sources.
For investors and policymakers, this evolving mix highlights a more complex transition pathway. The persistence of natural gas alongside clean energy growth suggests energy security and affordability concerns remain central to government planning, particularly in regions balancing decarbonisation with economic growth.
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Grid Bottlenecks And Flexibility Challenges
The report identifies grid infrastructure as the single biggest constraint to the energy transition. More than 2,500 gigawatts of projects, including renewable generation, battery storage, and large electricity consumers such as data centres, are currently waiting in connection queues worldwide.
IEA analysis indicates that deploying grid-enhancing technologies and reforming regulations to allow more flexible connections could unlock up to 1,600 gigawatts of capacity in the near term. System flexibility is becoming a strategic priority as power systems rely increasingly on weather-dependent renewable generation.
Utility-scale battery installations are expanding rapidly in markets such as California, Germany, Texas, South Australia and the United Kingdom, providing short-term balancing capacity. However, the agency notes that flexibility will need to extend beyond storage to include smarter demand management and more dynamic market design.
Affordability And System Security Rise On Policy Agenda
Electricity affordability remains a growing political and economic issue. Household electricity prices in many countries have risen faster than incomes since 2019, placing pressure on both consumers and industrial competitiveness. Policymakers are increasingly focused on market reforms that balance investment incentives with cost control and reliability.
Security and resilience are also emerging as central governance priorities. Ageing infrastructure, extreme weather events, cyber threats, and geopolitical risks are forcing regulators and utilities to rethink how systems operate and how critical infrastructure is protected.
For C-suite leaders and institutional investors, the IEA’s outlook highlights a decade defined not only by renewable deployment but by infrastructure modernisation, regulatory change, and evolving demand patterns linked to digitalisation and electrification.
As global electricity demand accelerates, the pace of grid investment and policy reform will determine whether energy systems can maintain affordability, reliability, and climate progress simultaneously. The report makes clear that the next phase of the energy transition will be shaped as much by transmission lines and market rules as by wind turbines and solar panels, reinforcing electricity’s central role in the global decarbonisation agenda.
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