Global electricity demand is forecast to grow by 3.3% in 2025 and 3.7% in 2026, according to the International Energy Agency. This growth rate is more than double that of overall energy demand. Renewables are expected to overtake coal as the largest source of electricity generation by 2025 or 2026, depending on weather and fuel prices.
Nuclear output is also projected to reach record levels, while gas-fired generation continues to replace coal and oil. These changes are likely to result in carbon dioxide emissions from electricity generation levelling off in 2025 and declining slightly in 2026.
China and India are expected to account for 60% of the global increase in demand, with electricity consumption in both countries accelerating. In the USA, demand growth is set to stay above 2% due to data centre expansion. By contrast, growth in the European Union is expected to remain around 1% in 2025 before a slight improvement in 2026.
Wholesale electricity prices in the European Union and the USA rose by 30 to 40% in the first half of 2025 compared to the previous year, mainly due to higher natural gas prices. Price differences between regions remain significant, with electricity costs for energy-intensive industries in the European Union still much higher than in the USA and China.
