Global electricity demand is forecast to increase by an average annual 3.3% in 2025 and by 3.7% in 2026, a moderation from 4.4% in 2024 but still some of the highest growth rates observed over the last decade. This is a slight downward revision from our previous forecast in February 2025 of 4% growth for this year and 3.8% in 2026. The change is partly due to the IMF’s downgrade of the global GDP growth outlook compared with its January 2025 update amid elevated uncertainty surrounding trade tariffs and economic prospects. Despite these downside risks, strong demand increases from industries, air conditioning (AC) and data centres, as well as significant strides in electrification, are expected to support growth in electricity use through 2026. Electricity demand is set to rise more than twice as fast as total energy demand over the forecast period. Overall, global electricity consumption will reach a new high of over 29 000 terawatt-hours (TWh) in 2026.

Following strong surges in electricity demand in 2024 driven by intense heatwaves and strong economic activity in the industrial and services sectors, the People’s Republic of China (hereafter, “China”) and India are expected to see more moderate growth rates in 2025. By contrast, US electricity demand is set to increase at a faster rate than in 2024, boosted by power consumption from expanding data centres. After a modest rebound in 2024 following two consecutive years of significant decline, demand in the European Union is forecast to continue rising, albeit at a moderate pace as the industrial sector has still yet to recover.

After rising by 7% y-o-y in 2024, we expect electricity consumption in China to increase by a more moderate 5% y-o-y in 2025, following subdued growth of 3.7% y-o-y in the first half of 2025. Economic headwinds and the impact of tariffs on Chinese exports saw demand growth in the industry sector slow to an average 2.4% in the first six months of the year, partially offsetting continued strong gains from electrification. China’s services sector has seen significant growth in recent years, with expanding AC use, EV charging, data centres and 5G networks driving gains of 7.1% y-o-y in H1 2025. In addition, electricity use in the manufacturing of new energy products continued to rise at a fast pace, as factory output of new energy vehicles and solar cells was up by 36% and 18% y-o-y, respectively, in H1 2025, while production of batteries rose by 51%. Electricity consumption in the residential sector increased by 4.9% in H1 2025, underpinned by greater penetration of appliances, which saw retail sales rise 31%, and a sharp increase in cooling degree days in June.

The rapid rise in electric vehicle sales combined with the robust expansion of charging infrastructure continued to further support Chinese electricity demand growth in the first half of the year. China, where the share of electricity demand from EVs reached a milestone of 1% in 2024, added more than 5 million new electric vehicles to its domestic fleet in H1 2025, up 32% y-o-y, while consumption from public EV charging infrastructure was 50% higher than in H1 2024.

Heat pumps are also set to be a key driver of China’s electrification in the industry and buildings sectors. Driven by growing demand for space, water and industrial heating, China plans to further accelerate deployment of heat pumps with new policy initiatives. The Action Plan for Promoting High-Quality Development of the Heat Pump Industry was issued in April, which defines new objectives to promote heat pumps both in terms of upgrading the domestic industry and of applications on the demand side, including the replacement of coal and gas boilers.

China’s electricity demand growth is expected to accelerate in the second half of the year, mainly due to a recovery in industry and a lower base effect in H2 2024 as the gains were more muted compared to H1 2024. The 5% increase forecast for the full year 2025 is revised lower from projections in the Electricity 2025 report, amid rising economic uncertainties. We expect demand to accelerate in 2026, reaching 5.7%. In terms of peak load, following the record high in 2024, the National Energy Administration (NEA) and the China Electricity Council (CEC) expect 7% growth this summer, potentially reaching 1 570 GW in the event of severe heatwaves. Latest data shows that peak load hit new record-highs three times by mid-July 2025, reaching 1 506 GW, as summer temperatures in most parts of the country were above the same period last year.

In India, the impact of global economic uncertainties on industrial activity and cooler summer temperatures compared to 2024 led to electricity demand increasing by 1.4% y-o-y in H1 2025. Demand is forecast to rise at a higher rate for the remainder of the year, reaching an annual growth rate of 4%. We expect demand to grow at a robust 6.6% in 2026, driven by stronger activity in industry and services, and increasing AC stock.

According to estimates from the Ministry of Power for 2025, peak load could reach 270 GW (+8% y-o-y) and shift to September instead of summer this year, although this should be fully met by rising generation capacity. To manage peak load growth, the Indian government is implementing AC standards which would cap temperature settings between 20ºC and 28ºC, potentially reducing peak load by up to 60 GW in 2035.

In the United States, electricity demand increased by 2.1% in 2024, supported by economic growth, the expansion of data centres and electrification. The same underlying factors continued to shape demand dynamics in early 2025, which rose by around 2.7% in the first half of the year. Demand is projected to maintain strong growth over the outlook period, rising by an average annual rate of 2.3% in 2025 and 2.2% in 2026. This marks a slight upward revision from our previous forecast of 2.1% in 2025 and 1.9% in 2026.

A major driver of this demand growth in the United States is the expansion of data centres, which consumed around 180 TWh of electricity in 2024, according to the IEA’s Energy and AI report. Investment in artificial intelligence and data centres continues to accelerate, with companies such as Meta, Amazon, Alphabet and Microsoft committing to spend USD 320 billion in 2025, up from USD 230 billion the previous year. Data centre electricity demand is expected to steadily rise through 2030, with consumption projected to increase by approximately 240 TWh relative to 2024 levels.

Another catalyst behind electricity demand growth is the emergence of new large industrial loads in high technology manufacturing sectors such as semiconductor fabrication and battery production. According to the United States Census Bureau, total construction spending in manufacturing has risen sharply in recent years, with spending in Q1 2025 more than double that of Q1 2022. Once operational, these new and upgraded facilities are expected to significantly increase electricity demand in the manufacturing sector. Electrification of the transport and heating sectors is also supporting growth in electricity demand. Electric cars sold in the United States grew 10% y-o-y in Q1 2025. Following growth in air-source heat pumps of 14% y-o-y in 2024, sales rose further, albeit at a more moderate pace of 9.5% in the first five months of 2025.

The European Union’s electricity demand rose by less than 1% in the first half of 2025, following an increase of 1.6% in 2024. We expect electricity consumption growth of 1.1% y-o-y for full-year 2025, before accelerating to 1.5% in 2026. This represents a downward revision from our previous forecast of 1.6% and 1.7%, respectively. A contributing factor to this revision is the GDP forecast for the European Union, which was revised downwards by the IMF compared to their January 2025 update.

Overall industrial electricity demand in the European Union is estimated to have stayed relatively flat in the first half of 2025, similar to its trend in 2024. Manufacturing activity in the euro zone has shown signs of stabilisation, as indicated by the Manufacturing Purchasing Managers’ Index (PMI), a composite indicator based on new orders, output, employment, delivery times and stocks of purchases. The index signals expansion if above 50 and contraction if below. In June, the PMI rose to 49.5, its highest level since August 2022, though it remained below the expansion threshold for the thirty-fourth consecutive month. In July, the Flash1 Manufacturing PMI rose to 49.8, reflecting further improvement.

At the sector level, primary metal production showed a mixed performance in the first half of 2025. Aluminium production saw some recovery in output, while crude steel fell by 3.3% y-o-y in H1 2025. Production of motor vehicles was 2% lower year-on-year in the first half of 2025. By contrast, pharmaceutical production posted particularly robust growth. It should be noted that EU industrial electricity demand had consecutively contracted by about 6% both in 2022 and 2023, and a return to 2021 levels is not anticipated within our outlook period.

https://www.iea.org/reports/electricity-mid-year-update-2025/demand-global-electricity-use-to-grow-strongly-in-2025-and-2026