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(Reuters) – Global electricity demand is expected to continue to grow faster in 2026 and 2027, with renewables expected to take over as the world’s largest source of electricity generation in 2026, the International Energy Agency said in its Electricity Mid-Year Update.
- Global electricity demand is expected to grow by 3.6% in 2026 and 3.8% in 2027, up from 3% in 2025, the IEA said.
- The main growth drivers are expected to be industrial expansion, more appliances, greater use of air conditioning and heat pumps, electric vehicles and data centres.
- The IEA said the Middle East energy shock had raised electricity generation costs and increased volatility but had not stopped global demand growth.
- Demand growth is expected to be dominated by China at 5.5% in 2026, with India at 7%, and the U.S. and European Union at close to 2% each.
- Disruptions to LNG supply due to the U.S.-Israeli war on Iran are weighing on electricity consumption in more price-sensitive LNG-importing markets in Asia, including Pakistan and Bangladesh.
- A stronger-than-expected El Nino event in 2026 could boost electricity demand further by raising cooling needs.
- Coal-fired power generation is forecast to increase by 1.4% in 2026 after being flat in 2025, due to higher gas prices encouraging switching, weather effects and renewable curtailment.
- Renewables are expected to overtake coal as the largest global source of electricity production after reaching near parity in 2025.
- Solar and wind power supply are expected to grow from 17% in 2025 to 21% in 2027.
- Solar power supply is expected to lead the growth in renewables, overtaking wind power in 2026 to become the second largest source of renewable energy generation behind hydropower.
Reporting by Forrest Crellin;Editing by Elaine Hardcastle
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