Global electricity demand is expected to expand at one of the fastest sustained paces in over a decade despite ongoing economic pressures, according to a new report from the International Energy Agency (IEA).

According to the agency’s just-published Electricity Mid-Year Update 2025, the additional demand from data centres, EVs, industry, appliances, air conditioning, and more will be met by renewables, natural gas, and nuclear power.

The report finds that electricity demand is set to rise by 3.3% in 2025 and 3.7% in 2026 – more than twice as fast as total energy demand growth over the same period. While the latest forecasts undercut the 4.4% surge recorded in 2024, they remain well above the 2015-2023 average of 2.6%.

Renewables are expected to overtake coal as the world’s largest source of electricity as early as 2025 or by 2026 at the latest, depending on weather and fuel price trends. At the same time, nuclear power output is expected to reach record highs, driven by reactor restarts in Japan, robust output in the United States and France, and new additions, mostly in Asia. The steady increase in gas-fired power generation is set to continue displacing coal and oil in the power sector in many regions.

As a result of these developments, carbon dioxide emissions from electricity generation are currently forecast to plateau in 2025 and record a slight decline in 2026, although weather and economic conditions could affect that trajectory.

The report quotes Keisuke Sadamori, IEA Director of Energy Markets and Security, who says the strong expansion of renewables and nuclear is steadily reshaping electricity markets in many regions. He warns that this trend must be matched by “greater investment in grids, storage and other sources of flexibility to ensure power systems can meet the growing demand securely and affordably.”

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