The International Energy Agency (IEA) forecast that global data center electricity demand will more than double from 2022 to 2026, with AI playing a major role in that increase. Research by Finbold, using data from the International Energy Agency, found that the global electricity demand stemming from the usage of electric cars skyrocketed by 3,630.77% from 2,600 gigawatt hours (GWh) annually in 2013 to 97,000 GWh in 2023.Additionally, projections based on the Stated Policies Scenario (STEPS)- which uses current trends and scheduled policies – indicate that global electricity demand stemming from EV adoption will rise another 631.96% by 2030, reaching 710,000 GWh.

Global demand for electricity has risen by 90% since 2000, according to the Ember think tank. Power consumption worldwide has gone up from 15,108 terawatt-hours (TWh) in 2000 to 28,661 TWh in 2022. In absolute terms, the increase in demand has reached 13,553 TWh, which is comparable to current annual electricity consumption in the Asia-Pacific region (14,449 TWh as of 2022), Global Energy reportes.

Falling electricity consumption in advanced economies restrained growth in global power demand in 2023. The world’s demand for electricity grew by 2.2% in 2023, less than the 2.4% growth observed in 2022. While China, India and numerous countries in Southeast Asia experienced robust growth in electricity demand in 2023, advanced economies posted substantial declines due to a lacklustre macroeconomic environment and high inflation, which reduced manufacturing and industrial output.

Global electricity demand is expected to rise at a faster rate over the next three years, growing by an average of 3.4% annually through 2026. The gains will be driven by an improving economic outlook, which will contribute to faster electricity demand growth both in advanced and emerging economies. Particularly in advanced economies and China, electricity demand will be supported by the ongoing electrification of the residential and transport sectors, as well as a notable expansion of the data centre sector. The share of electricity in final energy consumption is estimated to have reached 20% in 2023, up from 18% in 2015. While this is progress, electrification needs to accelerate rapidly to meet the world’s decarbonisation targets. In the IEA’s Net Zero Emissions by 2050 Scenario, a pathway aligned with limiting global warming to 1.5 °C, electricity’s share in final energy consumption nears 30% in 2030.

Electricity consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double by 2026.Data centres are significant drivers of growth in electricity demand in many regions.After globally consuming an estimated 460 terawatt-hours (TWh) in 2022, data centres’ total electricity consumption could reach more than 1 000 TWh in 2026. This demand is roughly equivalent to the electricity consumption of Japan. Updated regulations and technological improvements, including on efficiency, will be crucial to moderate the surge in energy consumption from data centres. 

Emerging and developing economies are the engines of global electricity demand growth. About 85% of additional electricity demand through 2026 is set to come from outside advanced economies, with China contributing substantially even as the country’s economy undergoes structural changes.In 2023, China’s electricity demand rose by 6.4%, driven by the services and industrial sectors. With the country’s economic growth expected to slow and become less reliant on heavy industry, the pace of Chinese electricity demand growth eases to 5.1% in 2024, 4.9% in 2025 and 4.7% in 2026 in our forecasts. Even so, the total increase in China’s electricity demand through 2026 of about 1 400 TWh is more than half of the European Union’s current annual electricity consumption. Electricity consumption per capita in China already exceeded that of the European Union at the end of 2022 and is set to rise further. The rapidly expanding production of solar PV modules and electric vehicles, and the processing of related materials, will support ongoing electricity demand growth in China while the structure of its economy evolves. 

Global electricity generation will surge by 3%/year over 2020-2050, with fast rises in developing countries, and moderate rises in advanced economies. Electricity generation increases in line with final electricity demand, and reaches 70,000 TWh in 2050. Renewable energy sources allow to produce between 50% and 80% of the total electricity needs. The share of fossil fuels, and notably coal, will drop quickly and substantially, especially in constrained scenarios, Enerdata said.

/IEA, Enerdata/