AI and cooling help drive electricity demand – IEA report

According to the IEA’s Electricity Mid-Year Update, the growth is being driven by strong economic activity in many regions, continued electrification of power systems and transport, and cooling demand arising from intense heatwaves. The report also highlights the increasing electricity demand associated with data centres, particularly the rapid expansion of resource-heavy generative AI. 

Global electricity demand is forecast to grow by around four per cent in 2024, up from 2.5 per cent in 2023. The IEA said this would represent the highest annual growth rate since 2007, excluding the exceptional rebounds experienced in the aftermath of the global financial crisis and the COVID-19 pandemic. The upward curve is set to continue into 2025, with the report predicting growth around the four per cent mark again. 

“Growth in global electricity demand this year and next is set to be among the fastest in the past two decades, highlighting the growing role of electricity in our economies as well as the impacts of severe heatwaves,” said Keisuke Sadamori, IEA director of Energy Markets and Security.