Global electricity demand is expected to grow at one of the fastest sustained rates in over a decade, expanding by 3.3 per cent in 2025 and 3.7 per cent in 2026, according to a report released on Wednesday by the International Energy Agency (IEA). The rise is driven by increased use of electricity in factories, households, data centres, air conditioning systems, and electric vehicles. While demand growth is slightly below the 4.4 per cent surge recorded in 2024, it remains well above the 2015–2023 average of 2.6 per cent. Renewables, natural gas and nuclear are expected to meet the additional demand, with renewables likely to overtake coal as the leading electricity source by 2026. Nuclear output is projected to reach record highs, supported by restarts in Japan, strong production in the US and France, and new capacity in Asia. Gas-fired generation is also expected to expand, displacing coal in many regions. As a result, emissions from power generation are forecast to plateau in 2025 and decline slightly in 2026, though weather and economic volatility may alter that trend. Emerging Asian economies are set to drive 60 per cent of global electricity growth, with demand accelerating to 5.7 per cent in China and 6.6 per cent in India by 2026. The US is also expected to see demand growth above 2 per cent due to the rise of data centres. In contrast, EU electricity demand is forecast to grow by just 1 per cent in 2025, with modest improvement in 2026. Wholesale power prices rose by 30–40 per cent in the US and EU in the first half of 2025 compared to the previous year, amid tight global gas markets. Despite this, average prices remained below 2023 levels but above pre-pandemic rates. Electricity costs continue to vary widely across regions, with EU energy-intensive industries still facing significantly higher power prices than those in the US and China. Attribution: Amwal Al Ghad English Subediting: M. S. Salama
