The International Energy Agency’s World Energy Outlook frames electricity as the central story of the coming decade. Global electricity demand is projected to grow by 40 percent in the next ten years. China drove most of the past decade’s growth, but emerging economies outside China will take a larger share going forward. Advanced economies that saw flat demand in the past decade are expected to see renewed growth as artificial intelligence and data centers expand.
Cooling and artificial intelligence are highlighted as important, but different, drivers of that growth. Income-driven expansion of air-conditioning is expected to add about 330 gigawatts to global peak demand by 2035, and rising temperatures could add another 170 gigawatts, together more than a 10 percent increase from 2024 levels. The report also emphasizes uneven impacts from artificial intelligence. Data centers still account for less than 10 percent of projected global electricity demand growth to 2035, but in the US data centers will represent half the growth in total electricity demand through 2030. Concentration matters because half of the data center capacity in the pipeline is close to large cities, placing concentrated stress on specific local grids.
The supply side will determine the climate outcome of rising demand. Solar and wind together were the leading source of electricity in the first half of this year, overtaking coal for the first time. Coal use could peak and begin to decline by the end of the decade. Nuclear capacity could grow by about a third over the next ten years after two decades of stagnation. Solar’s expansion looks especially well aligned with demand: 80 percent of expected electricity demand growth in the next decade is in locations with high-quality solar irradiation. Despite these shifts, the report warns global emissions will hit a record high this year and that the energy system must be remade faster to avoid the worst effects of climate change.
