- Global power demand expected to grow by more than 3.5 percent per year through the end of the decade.
- Renewables set to overtake coal as solar deployment accelerates worldwide.
- Grid expansion and flexibility emerge as critical constraints for the power sector.
Global electricity demand is projected to grow at an average rate of more than 3.5 percent per year through 2030, driven by electrification across industry, transport and digital infrastructure, according to a new report from the International Energy Agency.
The report, Electricity 2026, provides the IEA’s latest outlook on global electricity markets, covering demand, supply and carbon dioxide emissions over the period to 2030. It finds that electricity demand is increasing at least two and a half times faster than overall energy demand as the world enters what the agency describes as the Age of Electricity.
Rising industrial electricity use, continued uptake of electric vehicles, growing demand for air conditioning, and the rapid expansion of data centres and artificial intelligence are the main drivers. While emerging and developing economies account for most of the growth, electricity consumption in advanced economies is also rising after more than a decade of stagnation. These markets are expected to contribute around one fifth of the total increase in global power demand by 2030.
On the supply side, the report shows a rapid shift towards lower emissions sources. Electricity generation from renewables, supported by record levels of solar photovoltaic deployment, is now in the process of overtaking coal generation, after the two sources reached near parity in 2025. Nuclear power output has also reached a new global record.
By the end of the decade, renewables and nuclear together are forecast to generate 50 percent of global electricity, up from 42 percent today. Natural gas fired generation is also expected to grow, particularly in the United States and the Middle East, where gas continues to replace oil in the power sector. Coal fired generation, by contrast, is projected to decline globally and return 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 are placing growing pressure on electricity infrastructure. Rising demand, a more weather dependent generation mix and changing consumption patterns are increasing the need for grid expansion and system flexibility. The report estimates that more than 2 500 gigawatts of projects worldwide, including renewables, storage and large electricity loads such as data centres, are currently stalled in grid connection queues.
According to the analysis, wider deployment of grid enhancing technologies and regulatory reforms that allow more flexible grid connections could enable up to 1 600 gigawatts of these projects to be integrated in the near term. This would significantly improve grid utilisation and unlock substantial new capacity.
“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,” said Keisuke Sadamori, IEA Director of Energy Markets and Security. “Meeting this demand will require annual investment in grids to rise by 50 percent by 2030, alongside a strong focus on flexibility, security and resilience.”
The report also highlights rapid growth in utility scale battery storage, which is becoming an increasingly important source of short term flexibility. Markets including California, Germany, Texas, South Australia and the United Kingdom have all seen strong recent growth in battery capacity.
Affordability remains a major concern, with household electricity prices in many countries rising faster than incomes since 2019. Higher power prices are also weighing on industrial competitiveness, prompting policymakers to focus on market design and regulatory reforms that deliver not only investment, but also greater efficiency across demand, supply and infrastructure.
Finally, the IEA underscores the need to strengthen the security and resilience of power systems as risks increase from ageing infrastructure, extreme weather events, cyberthreats and other vulnerabilities. Modernising system operations and improving the physical protection of critical infrastructure will be essential to ensuring reliable electricity supply through the end of the decade.
Author: Bryan Groenendaal
