The 2025 International Energy Agency (IEA) Electricity Report analyzes key trends and projections in global electricity markets. Using scientific methodology, the report analyzes the current situation and works on scenarios for the future, enlightening the public on energy security or technologies, and enlightening researchers or professionals conducting open source studies.
At the beginning of the report, global electricity demand is expected to increase at an annual average rate of 3% between 2025 and 2027. The main reasons for this increase are industrialization, the rapid spread of electric vehicles and the parallel increase in the installation capacity of charging stations, the growth of data centers and the installation of cooling systems with high energy demand for cooling these centers. In particular, consumption habits and new trends should be thoroughly researched in order to analyze energy consumption forecasts in a predictable way and develop policies accordingly.
On the demand side, we can observe that electricity is growing rapidly. In particular, 85% of the increase in electricity demand will come from developing countries. On the other hand, in the Asian markets, India is expected to grow by 6.3%, with the same expectation for China. In 2023 and 2024, electricity consumption increases by around 7% year-on-year, despite slower economic growth of around 5%. This dynamic supports the realization of the scenarios for 2025-2027.
In the introduction of the report, it is emphasized that China is no longer just a demand driver, but is now a technology driver. China’s strong electricity demand growth in recent years has been driven by many factors. On the industrial side, rapid growth in the electricity-intensive production of solar PV modules, batteries and electric vehicles (EVs), as well as in traditional industries, along with continuous electrification and stable production in other traditional sectors, have boosted demand. Outside of industry, increasing air conditioning stock, growing EV charging and the rise of data centers and 5G networks are also important factors. These major catalysts, as well as increasing electrification across all sectors, contribute to electricity demand growing faster than Gross Domestic Product (GDP).
Regionally, declining gas production in Europe and the Americas, combined with increased production from clean energy sources, will be more than offset by strong increases in the Middle East and Asia. In the Middle East, strong electricity demand growth and an oil-to-gas transition in the power sector will be key drivers. At the same time, rising electricity consumption in Asia will lead to more power generation from gas-fired plants, which will continue to be important for power system flexibility needs. Even in regions where we expect gas-fired power plants to decline, their role in ensuring system resilience and acting as back-up capacity will be vital for maintaining security of supply.
On the other hand, the impacts of increasing weather events on energy systems emphasize the importance of enhancing electricity security. Extreme weather events such as storms, droughts and heat waves led to widespread power outages in 2024. The United States of America (USA) experienced large-scale power outages in early January due to major winter storms that affected a wide area covering many states. Hurricanes were particularly frequent in the Atlantic in the summer of 2024, affecting many US states and Caribbean countries, causing widespread damage and power outages. The Australian state of Victoria experienced a similarly large blackout due to a storm that damaged transmission infrastructure.
At the same time, dwindling hydropower resources due to drought have strained energy systems around the world. Ecuador and Colombia have been strongly affected by El Niño weather impacts, and Mexico has faced supply shortages during periods of heat waves and low hydropower generation, with increased electricity demand. Such events highlight the need to increase resilience to the impacts of extreme weather on energy systems. Sufficient dispatchable capacity and storage, together with other resilience options such as demand response and interconnections, will be vital to enhance electricity security. As electricity supply and demand become more weather-dependent, transient periods of reduced weather-dependent supply can put significant pressure on the energy system. This is particularly the case if increased electricity demand due to extreme weather conditions, such as winter storms or intense heat waves, coincides with interruptions in fuel supply or failures at power plants. When planning for resource adequacy, it is increasingly important to take into account the unpredictable nature of weather events in order to reliably meet electricity demand with available supply.
The report makes a number of technical caveats. As power systems continue to expand through continuous electrification and both electricity demand and supply become more weather dependent, it is imperative to ensure the security and reliability of electricity supply. Many power systems around the world face adequacy challenges during periods of high electricity demand, such as peak seasonal heating needs in winter and cooling needs in summer. Extreme weather conditions, such as winter storms or intense heat waves, can put significant pressure on the power system, especially when combined with supply-side impacts such as droughts, fuel supply disruptions or power plant failures.
