The International Energy Agency (IEA) has published a forecast for the global power industry in 2025–2027. Global electricity consumption grew by 4.3% in 2024 (2.5% in 2023) and will continue to grow by 4% on the annual average, according to the IEA estimates. 

Global electricity consumption will grow by an unprecedented 3.5 petawatt-hours (PWh) over the next three years, according to a forecast by the IEA. Industrial development, spread of air conditioning, an increase in the number and capacity of data centers and, in general, electrification of economies around the world are said to be the drivers behind this immense growth. It is also fueled by the rise in electricity consumption that started in 2024 in Australia, Canada, Japan, Korea, the United States, and the European Union. By contrast, these countries faced a decline in electricity demand in 2009–2023.

4% per annum

Power consumption growth

China

China has turned into the world’s largest consumer of electricity. Since 2023, the country has accounted for over a third of global power consumption. In 2024, its domestic electricity demand amounted to 10 PWh, while consumption grew by 7% in both 2023 and 2024. Manufacturing industries account for about 60% of the country’s total electricity demand.

China is the largest power consumer worldwide

In 2025–2027, China’s electricity consumption is projected to grow by 6% on the annual average, according to the IEA. China will account for more than half (54%) of the global growth in electricity demand. It is assumed that about half of new consumption in the next three years will come from industries, including traditional sectors and production of photovoltaic modules, batteries and electric vehicles. Also, electricity consumption will increase on the back of more widely used air conditioning, additions to the electric vehicle fleet, and deployment of data centers and 5G networks. When speaking about China, it makes sense to mention its expanding grid connectivity. The share of electricity in China’s final consumption is 28%, which is much higher than in the US (22%) or the European Union (21%).

More interesting is that China’s electricity consumption forecast outpaces its GDP forecast. While the former is estimated at 6% for 2025, the latter is only 4%.

India

Electricity demand in India will also grow over the next three years. According to the IEA the average growth in this period is estimated at 6.3% per annum, up from the average of 5% in 2015–2024. Air conditioning makes, and will continue to make, a sizable contribution to the growth of electricity consumption. By 2030, it could account for up to a third of India’s peak load. Interestingly, the section on India contains virtually no estimates of contributions from different economic sectors to the total energy consumption, as is done for China. The authors focus on the government policies for daily electricity rationing, and note the growing shortage of power generation capacity in India.

USA

Demand for electricity in the United States, the world’s second largest power consumer after China, grew by 2% in 2024, whereas there was a 1.8% drop a year before. The IEA expects electricity consumption in the US to continue growing at 2% per annum in 2025–2027. A year earlier, the agency’s experts estimated the growth at 1% in 2025–2026. Expectations of a strong growth in demand from data centers are among the main reasons for the upward revision of the forecast. The second factor is hopes for growth in the US economy in general and manufacturing industries in particular. “We expect the manufacturing sector in general, especially new large industrial loads such as semiconductor production facilities, to contribute to the demand growth through 2027. This will be accompanied by continued electrification of the heating and transportation sectors,” the report says.

European Union

Electricity demand in the European Union has begun to recover from the economic downturn. Power consumption in the EU decreased by 3% in each of 2022 and 2023. In 2024, the EU energy consumption showed a 1.4% increase driven by the residential and commercial sectors due to a broader use of heat pumps and electric vehicles. Another factor is the rising power consumption by data centers. “Electricity prices for energy-intensive industries in the European Union in 2024 were well below the record highs seen in 2022 and slightly lower than in 2023. But they were still, on average, double those in the United States and 50% higher than in China,” says the report.

Russia

In Russia, electricity consumption in 2024 amounted to 1,191.7 billion kWh, up by 3.1% from 2023. Electricity generation in 2024 increased to 1.18 trillion kWh, up by 2.9% from the previous year, according to the National Grid Operator. The Russian Ministry of Energy expects electricity consumption in the Russian national grid to grow by 2.11% on the annual average until 2030. The forecast for isolated power grids assumes a 2.23% average annual growth in electricity consumption over the same period. Power consumption in 2025 is projected to increase by 3%, which is obviously higher than the IEA estimate for 2025–2027 (1.5%). Consumption is set to grow most in Russia’s Far East at the annual average of 4.87%, according to the Grid Operator’s forecast. Russia plans to commission 17.34 GW of generating capacity, including 3.85 GW in nuclear additions, by 2030.

Growth of low-carbon generation

The IEA believes that low-emission sources will be able to meet all growth in electricity demand through 2027: “Record-high electricity generation from renewables and nuclear is expected to meet all the additional global demand over the next three years.”

According to the report, nuclear power generation will reach another peak in 2025 and will continue to grow over the next two years, setting new records. Strong growth will be facilitated by the recovery of power output at the French nuclear power plants, restart of power reactors in Japan, and new reactor additions.

IEA: nuclear power production will hit a new high in 2025 and continue growing

For our part, we would like to remind our readers that Rosatom is the leader in building power reactors in other countries. Rosatom’s portfolio of international contracts includes 39 reactor construction projects at different stages of completion (including six small modular reactors) in 10 countries. Three more power reactors are being built in Russia.

“The growth trend in nuclear generation also reflects a strong comeback for the technology in policy circles, highlighting its importance as a stable backbone in low-emissions energy systems for an increasing number of countries,” says the IEA report.

39 power units

Rosatom’s international contract portfolio

Global emissions

According to IEA experts, emissions from power generation will plateau between 2025 and 2027 after a 1% increase in 2024, which is slightly lower than the 1.4% growth in 2023. The IEA sees the reasons for this trend as an increased use of renewable energy sources and a decline in fossil fuel generation. Lower emissions in the EU and the USA are set off by an increase in emissions in India and South-East Asia throughout the entire period in question.

The IEA experts estimate that the share of coal-fired power plants will fall below 33%. Gas-fired generation is expected to grow globally by around 1% on the annual average in 2025–2027, down by 2.6% from 2024. The share of gas-fired power plants will decline in Europe and the Americas but grow in the Middle East and Asia.

Prices

In 2024, wholesale electricity prices fell in the EU, India, the UK and the US by an average of about 20% compared to 2023. This was broadly in line with the global decline in energy commodity prices. However, they are still well above pre-pandemic levels in most regions. The increasing frequency of negative wholesale prices has become specific to electric power markets in recent years. “Negative prices broadly signal insufficient flexibility in the system due to technical, regulatory or contractual reasons,” IEA experts believe.

Weather impacts on the power sector

The most interesting section in the report is perhaps the section on the impact of weather conditions on the global power industry. As noted in the report, extreme weather events such as storms, droughts, and heat waves have led to massive power transmission outages in 2024. For example, several US states experienced widespread power outages due to severe winter storms in early January. In the summer, hurricanes in the Atlantic region disrupted power supply and caused serious damage to residents of many US states and Caribbean countries. The Australian province of Victoria was also affected by the storm that damaged power lines. Dry weather has reduced output at hydroelectric power plants around the world. In particular, this situation was faced by Ecuador, Colombia, and Mexico.

“Such events highlight the need to increase resiliency against the impacts of extreme weather on power systems,” says the report.

As electricity supply and demand become increasingly weather-dependent, there is a growing risk that reduced generation from renewable energy plants will coincide with increased demand due to extreme heat or winter storms. “Having sufficient dispatchable capacity and storage, among other flexibility options such as demand-side response and interconnections, will be essential for enhancing electricity security,” the IEA points out.

However, there is another solution: countries should develop nuclear generation, which is almost independent of any weather vagaries. Rosatom builds and operates its nuclear power plants, both large and small, across all climatic zones, ranging from the Arctic of the Russian Chukotka to the subtropics of Bangladesh and from the Egyptian desert to the Bolivian highlands. When designing, constructing and operating nuclear stations and research reactors, Russian engineers make sure to take into account both existing and forecast conditions to ensure the operability of Russian-designed facilities for their entire service life.

Photo by: Unsplash, LNPP