Global electricity consumption is expected to grow annually at 4% between 2025 and 2027, reaching 3,500 TWh, the fastest in recent years, according to a new report by the International Energy Agency (IEA).

Solar, wind, and hydropower are projected to meet approximately 95% of the global demand growth by 2027 and are expected to provide over one-third of the total electricity generation in 2025. Solar generation is expected to meet roughly half the global demand growth by 2027, up from 40% in 2024.

The IEA’s analysis found that the increase in consumption is mainly driven by growing energy use for industrial production, increased demand for air conditioning, accelerating electrification led by the transport sector, and the rapid expansion of data centers.

Global Demand and Consumption 

Worldwide energy demand increased 4.3% in 2024, compared to the 2.5% rise in 2023. Emerging economies are expected to comprise 85% of this demand growth.

Of these economies, China constituted over half of the world’s demand growth in 2024, with electricity requirements increasing 7% in 2023 and 2024. Its electricity demand is projected to grow by an average of 6% until 2027.

India, Southeast Asian nations, and other emerging markets are also expected to witness considerable electricity demand growth, driven by economic expansion and rising air conditioner ownership.

Africa continues to face challenges with electrification, with approximately 600 million sub-Saharan Africans living without reliable electricity access.

In contrast, electricity consumption in advanced economies remained almost unchanged between 2021 and 2024. However, demand is expected to increase in such economies, including Australia, Canada, the European Union (EU), Japan, Korea, and the U.S. These countries are projected to comprise 15% of the global demand growth up to 2027.

The demand increase is driven by higher electric vehicle (EV) usage, air conditioners, data centers and heat pumps, and other end-use technologies.

Among the advanced economies, demand in the U.S. increased 2% in 2024, after a 1.8% reduction in 2023. Higher consumption from data centers is expected to drive the country’s electricity demand at a 2% average annual rate. Other consumers include households, EVs, the industrial sector, and semiconductor manufacturers.

The EU witnessed an economic slowdown in recent years, and the region’s electricity consumption declined 3% in 2022 and 2023, reducing it to early 2000s levels. The region’s consumption grew 1.4% in 2024, driven by an increased use of heat pumps and EVs in the residential and commercial sectors. Higher demand from data centers also contributed to the growth.

Renewables’ Contribution

IEA expects an expansion in low-emissions sources, mainly renewables and nuclear, to adequately cover the global electricity demand growth over the next three years.

Solar, wind, and hydropower are projected to meet approximately 95% of the demand growth worldwide by 2027, and are expected to provide over one-third of the total electricity generation in 2025, overtaking coal.

In particular, expanding affordable solar generation is expected to meet roughly half the global demand growth by 2027, up from 40% in 2024.

Solar generation reached 2,000 TWh worldwide in 2024, producing 7% of global electricity, up from 5% in 2023. It will provide approximately 600 TWh of additional electricity annually in three years.

Solar generation surpassed electricity from coal in the EU in 2024, with its share in the generation mix exceeding 10%. China, the U.S., and India are expected to achieve a 10% solar energy share by 2027.

India Overview

India’s electricity demand is expected to grow considerably, driven by economic expansion, electrification, and increased air conditioner use.

The country’s electricity demand grew by 5.8% year-over-year in 2024. It is expected to grow at an average of 6.3% annually over the next three years, up from a 5% growth rate between 2015 and 2024. Demand in the residential and commercial sectors rose between 60% and 65% from 2014 to 2024.

According to India’s Ministry of Power, peak demand is expected to surpass 400 GW by 2030, with 65% of capacity projected from non-fossil fuel sources.

India’s peak electricity load rose to 250 GW in 2024, a 68% 10-year growth from 148 GW. This increase is supported by the country’s industrial and agricultural segments, improved electricity access, and growing usage of air conditioners and other appliances in residential and commercial sectors.

Daily peak load in India rose by over 7 GW in 2024 for each incremental degree in daily average temperature, twice the increase in 2019, and is expected to surpass 11 GW per degree in 2027. Increased air conditioner usage in the country contributed significantly to this growth.

The country’s total electricity generation increased to 168 TWh in May 2024, a 15% growth over the previous year driven by an unprecedented heatwave.

India is shifting towards increased renewable energy generation to address its growing electricity demand. The country achieved significant growth in clean energy output, and its renewables share in the energy mix is projected to grow from 21% in 2024 to 27% in 2027.

The country’s solar generation is expected to rise at 28% until 2027.

It achieved a module manufacturing capacity of 50 GW for solar photovoltaics and 6 GW for solar cells.

Notable programs to support solar adoption include the PM-Surya Ghar: Muft Bijli Yojana residential rooftop and the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan agricultural solar initiatives.

Installations under the PM Surya Ghar program crossed 800,000 one year after it was launched.

Wind generation grew at a compound annual growth rate (CAGR) of 7% between 2018 and 2024. It is projected to grow at a CAGR of 11% until 2027. The country’s government approved viability gap funding of INR 74.5 billion (~$857,749,790) to set up India’s first offshore wind projects, including projects of a capacity of 500 MW each in Gujarat and Tamil Nadu.

The country is also developing 4 GWh of battery energy storage systems (BESS) and introduced programs subsidizing up to 40% of the system’s capital cost. Distribution companies will be offered 85% of BESS capacity for greater integration of renewable energy into the national grid.

Additionally, India’s Union Budget 2024-2025 proposed a policy to promote pumped hydro storage projects for seamlessly integrating renewable energy.

IEA predicted that India will become the world’s third-largest market for utility-scale batteries by 2030, with capacity additions expected to rise to 9 GW by 2030.

The country also launched the National Green Hydrogen Mission in 2023 to support green hydrogen deployment, with guidelines for pilot projects in the transport, shipping, and steel sectors.

In contrast, India’s coal-fired generation increased 5% year-over-year in 2024, with a 74% share of the electricity mix. It is expected to rise 2% annually until 2027. The slow growth in usage despite increased electricity demand expectations is because of the rising projected growth in renewables.