Global power demand to rise in 2026 and 2027: IEA report

Global electricity demand is set to accelerate in 2026 and 2027, growing by 3.6% and 3.8% respectively, surpassing the 3% growth anticipated for 2025, according to the International Energy Agency's (IEA) mid-year review. This surge is fueled by increasing consumption from data centers, the accelerating adoption of electric vehicles, and the widespread use of air conditioning and heat pumps. Consequently, global electricity consumption is projected to reach 30,700 terawatt hours (TWh) in 2027, up from 28,600 TWh in 2025.

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As a result, global electricity consumption is set to reach 30 700 terawatt hours (TWh) in 2027, up from 28 600 TWh in 2025.

The report highlights that the ongoing West Asia conflict presents a significant downside risk. Rising energy prices stemming from the conflict could dampen the global economy, potentially leading to a slowdown in overall consumption. The conflict has already contributed to price volatility in natural gas, pushing prices in Asia and Europe to their highest levels since the 2022-2023 energy crisis. This has prompted several countries in these regions to switch from natural gas to coal for electricity generation.

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The temporary loss of nearly 20% of global LNG supply has triggered significant price volatility, pushing natural gas prices in both Asia and Europe to their highest levels since the 2022-2023 energy crisis.

Despite these challenges, the share of renewable energy in the global mix is expanding, playing a crucial role in diversifying electricity supplies and bolstering energy security. Renewables are forecast to outpace coal in electricity generation by 2026, with their share in the overall mix rising from 33% in 2025 to 37% by 2027. China's electricity demand is expected to grow to 5.5% in 2026, driven by EV adoption and manufacturing activity, while India's demand is projected to rebound to 7% from 1.6% in 2025. Additionally, a stronger El Nino event in 2026 is expected to increase demand for cooling, further boosting electricity consumption, though it may also impact hydropower and wind generation, increasing reliance on fossil fuels in some regions.

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The elevated gas prices have, in turn, prompted fuel switching from natural gas to coal in several Asian and European countries.