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IEA Sees Global Power Demand Rising In 2026 And 2027
POWER & RENEWABLE ENERGY

IEA Sees Global Power Demand Rising In 2026 And 2027

The International Energy Agency mid-year review said global power demand will accelerate in 2026 and 2027 versus 2025, with growth projected at three point six per cent in 2026 and three point eight per cent in 2027, up from three per cent in 2025. It attributed the acceleration to rising electricity use in data centres and to faster uptake of electric vehicles, air conditioning and heat pumps. These trends are altering peak loads and seasonal consumption patterns.

Global electricity consumption was projected at 30,700 TWh in 2027, up from 28,600 TWh in 2025. The review identified the West Asia conflict as a downside risk that could elevate energy prices and weigh on the global economy, noting a temporary loss of nearly 20 per cent of global LNG supply that has driven price volatility. Elevated gas prices have prompted fuel switching from natural gas to coal in parts of Asia and Europe, testing system flexibility and raising short-term supply concerns.

The IEA said a rising share of renewable energy has diversified supplies and supported energy security, helping to limit the impact of recent shocks. Renewables are forecast to outpace coal in power generation in 2026 after reaching parity last year, with generation from renewables set to grow by more than eight per cent in 2026. The share of renewables in the generation mix is projected to rise from 33 per cent in 2025 to 37 per cent by 2027.

China's demand was projected to grow by five point five per cent in 2026, up from five point two per cent in 2025, driven by electric vehicle adoption and stronger manufacturing. India was forecast to rebound to seven per cent after a weak one point six per cent in 2025 when an early monsoon cooled demand. The review warned that a stronger El Nino would raise cooling demand and typically reduce hydropower and wind output in Latin America and Southeast Asia, potentially increasing reliance on coal and gas and requiring policymakers to balance reliability with decarbonisation.

The International Energy Agency mid-year review said global power demand will accelerate in 2026 and 2027 versus 2025, with growth projected at three point six per cent in 2026 and three point eight per cent in 2027, up from three per cent in 2025. It attributed the acceleration to rising electricity use in data centres and to faster uptake of electric vehicles, air conditioning and heat pumps. These trends are altering peak loads and seasonal consumption patterns. Global electricity consumption was projected at 30,700 TWh in 2027, up from 28,600 TWh in 2025. The review identified the West Asia conflict as a downside risk that could elevate energy prices and weigh on the global economy, noting a temporary loss of nearly 20 per cent of global LNG supply that has driven price volatility. Elevated gas prices have prompted fuel switching from natural gas to coal in parts of Asia and Europe, testing system flexibility and raising short-term supply concerns. The IEA said a rising share of renewable energy has diversified supplies and supported energy security, helping to limit the impact of recent shocks. Renewables are forecast to outpace coal in power generation in 2026 after reaching parity last year, with generation from renewables set to grow by more than eight per cent in 2026. The share of renewables in the generation mix is projected to rise from 33 per cent in 2025 to 37 per cent by 2027. China's demand was projected to grow by five point five per cent in 2026, up from five point two per cent in 2025, driven by electric vehicle adoption and stronger manufacturing. India was forecast to rebound to seven per cent after a weak one point six per cent in 2025 when an early monsoon cooled demand. The review warned that a stronger El Nino would raise cooling demand and typically reduce hydropower and wind output in Latin America and Southeast Asia, potentially increasing reliance on coal and gas and requiring policymakers to balance reliability with decarbonisation.

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