Global electricity demand is expected to accelerate over the next two years despite ongoing volatility in energy markets caused by the Middle East conflict, according to the International Energy Agency’s (IEA) latest Electricity Mid-Year Update.
The report projects global electricity demand to grow by 3.6% in 2026 and 3.8% in 2027, up from 3% in 2025, with total global consumption reaching 30,700 terawatt-hours (TWh) by 2027.
The IEA said rising electricity use will continue to be driven by expanding industrial activity, electric vehicles, air conditioning, household appliances and rapidly growing data centers.
Although disruptions to LNG supplies through the Strait of Hormuz have pushed natural gas prices in Asia and Europe to their highest levels since the 2022–23 energy crisis, electricity systems have remained resilient. Increased LNG exports from North America and rapid growth in renewable energy have helped ease supply pressures, although higher gas prices have prompted some countries to switch from gas to coal-fired power generation.
The report forecasts that renewables will become the world’s largest source of electricity generation in 2026, overtaking coal. Renewable generation is expected to expand by more than 8% next year, increasing its share of global electricity generation from 33% in 2025 to 37% by 2027.
Solar photovoltaic (PV) is expected to remain the fastest-growing source of electricity, surpassing wind power in 2026 to become the world’s second-largest renewable electricity source after hydropower.
Among major economies, electricity demand is forecast to rise by 5.5% in China and 7% in India in 2026, while growth is expected to remain close to 2% in both the United States and the European Union. However, higher fuel costs and supply disruptions are expected to weigh on electricity consumption in LNG-dependent countries, including Bangladesh and Pakistan.
The IEA also warned that an intense El Niño event could further increase electricity demand for cooling while reducing hydropower and wind generation in some regions. It noted that expanding renewable energy will require greater investment in grid flexibility, battery storage and demand-response technologies to maintain reliable power systems.
