- Global power demand expected to grow by more than 3.5 percent annually to 2030, driven by industry electrification, electric vehicles and data centres.
- Renewables and nuclear to supply 50 percent of global electricity by the end of the decade as coal generation declines.
- Grid expansion and system flexibility identified as critical bottlenecks for energy transition investment
Global electricity demand is set to grow strongly through to 2030, reinforcing the need for major investment in power grids and system flexibility, according to a new report by the International Energy Agency.
The report, Electricity 2026, forecasts that global electricity demand will increase by an average of more than 3.5 percent per year for the rest of the decade. This growth is expected to significantly outpace overall energy demand as electrification accelerates across industry, transport and buildings.
Rising industrial electricity use, the continued uptake of electric vehicles, increased air conditioning demand and the rapid expansion of data centres and artificial intelligence are key drivers. While emerging and developing economies remain the main contributors to demand growth, advanced economies are also seeing renewed increases in electricity consumption after more than a decade of stagnation. These markets are expected to account for around one fifth of total global demand growth to 2030.
On the supply side, the report finds that electricity generation from renewables is on track to overtake coal, following record deployment of solar photovoltaic capacity. Nuclear power generation also reached a new record level. Together, renewables and nuclear are projected to account for 50 percent of global electricity generation by the end of the decade, up from 42 percent today.
Natural gas fired power generation is also expected to grow, supported by rising demand in the United States and a continued shift from oil to gas in parts of the Middle East. Coal fired generation, by contrast, is forecast to decline globally, falling back to 2021 levels by 2030. As a result, global carbon dioxide emissions from electricity generation are expected to remain broadly flat over the period.
The IEA warns that these trends place increasing pressure on electricity infrastructure. Growing demand, a more weather dependent generation mix and changing consumption patterns require rapid expansion of power grids and greater system flexibility. At present, more than 2 500 gigawatts of projects, including renewables, storage and large electricity users such as data centres, are stalled in grid connection queues worldwide.
The report notes that deploying grid enhancing technologies and implementing regulatory reforms could enable up to 1 600 gigawatts of these projects to be connected in the near term. Such measures would allow existing grids to be used more efficiently and unlock significant new capacity.
Speaking on the findings, IEA Director of Energy Markets and Security Keisuke Sadamori said annual investment in power grids will need to increase by around 50 percent by 2030 to meet rising demand. He added that flexibility, security and resilience will be increasingly important as electricity systems evolve.
Utility scale battery storage is highlighted as a growing source of short term flexibility, with markets including California, Germany, Texas, South Australia and the United Kingdom seeing strong recent growth. The report also flags rising electricity prices as a key concern for households and businesses, prompting policymakers to focus on market design and regulatory reforms that improve efficiency across the power system.
Finally, the IEA emphasises the need to strengthen the security and resilience of electricity systems, citing risks linked to ageing infrastructure, extreme weather events and cyber threats. Modernising system operations and protecting critical infrastructure will be essential to maintaining reliable power supply in the years ahead.
Link to the full report HERE
Author: Bryan Groenendaal
