World Electricity Demand Rising 3.6% Annually By 2030 — IEA

The International Energy Agency (IEA), has made a forecast suggesting that global electricity demand is growing at a record rate and projected to grow at an average annual rate of 3.6 per cent between 2026 and 2030.

In its electricity 2026 report the IEA said demand rose 3 per cent in 2025 after increasing 4.4 per cent in 2024.

The acceleration according to the report is driven by industrialization, electric vehicles, air conditioning and the rapid expansion of data centers linked to artificial intelligence. Emerging economies are expected to account for roughly 80 per cent of incremental demand growth through 2030.

The surge is straining transmission and distribution networks, now the main bottleneck in the energy transition. More than 2,500 GW of generation, storage and large industrial projects are currently awaiting grid connection worldwide.

The IEA estimates that about 1,600 GW could be connected in the short term through regulatory reforms and technologies that enhance grid flexibility.

Global investment in electricity grids stands at about $400 billion per year. To keep pace with projected demand, spending would need to rise by around 50 per cent.

BloombergNEF said investment exceeded $470 billion in 2025, up 16 per cent from 2024, but remains insufficient to ease grid constraints.

Higher equipment costs, inflation, supply chain disruptions and labor shortages are slowing network expansion.

In advanced economies, electricity consumption is rebounding after 15 years of stagnation. In the United States, demand grew 2.1 per cent in 2025 and is expected to increase by about 2 per cent annually through 2030, with roughly half of that growth driven by data centers.

In the European Union, consumption is projected to rise by about 2 per cent per year over the same period. Japan, Canada, Australia and South Korea are also seeing renewed momentum.

The strain is particularly pronounced in Africa, where rapid additions of solar, hydro and gas capacity are colliding with fragmented and undersized grids. While investment in new generation is increasing, transmission infrastructure remains insufficient to deliver power to industrial and urban centers.

The IEA stressed that scaling up grid investment is especially critical for African countries, which face fiscal constraints and weak regional interconnections.

Without rapid expansion of high-voltage lines and cross-border links, part of the electricity produced risks going unused.

This reduces the economic returns of energy projects and slows industrialization and electrification efforts. Transmission has therefore become central to converting new capacity into sustained economic growth on the continent.

Globally, grid modernization will determine the ability to integrate renewable energy, ensure security of supply and support the expansion of industrial and digital activity. For Africa, as elsewhere, the energy transition depends as much on transmission infrastructure as on generation capacity.