EuroWire, PARIS: Global electricity demand is set to rise sharply through 2030, the International Energy Agency said, projecting average annual growth of more than 3.5% and calling for a major increase in investment in power grids to keep pace with expanding consumption and a faster shift toward electrification. In its Electricity 2026 report released on Feb. 6, the IEA said demand growth is being propelled by structural changes in economies and the rapid addition of new electricity loads.
The agency said rising electricity use reflects accelerating electrification across industry and transport, continued growth in air-conditioning demand, and expanding digital infrastructure, including data centres and artificial intelligence applications. While most demand growth is expected to come from emerging and developing economies, the IEA said advanced economies are also returning to sustained growth after a long period of relatively flat electricity consumption, accounting for roughly one-fifth of net demand growth through 2030.
The IEA said the transmission and distribution network is the key constraint in many markets, with new generation and large new consumers frequently waiting for grid connections. It estimated more than 2,500 gigawatts of projects globally are in connection queues, including renewable generation, energy storage and large loads such as data centres. The agency said lengthy planning, permitting and construction timelines for grid infrastructure, often measured in years, are colliding with faster build cycles for many energy projects and new demand.
The report said grid investment must expand materially to preserve reliability and enable higher shares of clean generation. The IEA estimated annual investment in electricity grids would need to rise by roughly 50% by 2030 from about $400 billion today. It also said supply chains and skilled workforces will need to scale, noting that prices for key grid components have risen sharply, with the report citing a near doubling in costs over the past five years. The IEA said regulatory reforms and grid-enhancing technologies could help connect roughly 1,200 to 1,600 gigawatts of advanced-stage projects in the near term.
Grid bottlenecks and connection queues
The IEA said that as electricity systems add more variable renewable generation, the need for flexibility increases, including storage, demand response and modernized market rules that better reflect changing load patterns. The report said many grids were designed for centralized generation and one-way flows, and now need upgrades to handle more distributed resources and higher peak loads. It also pointed to the importance of digital tools for monitoring and control, as well as investments that raise capacity on existing corridors.
The agency forecast a continued expansion in low-emissions generation, with renewables and nuclear together expected to provide about half of global electricity generation by 2030, up from roughly 42% today, according to its report release. It said the growth in clean generation is expected to limit the rise in power-sector carbon dioxide emissions even as consumption increases, with emissions projected to remain broadly flat through 2030. The IEA also said natural gas-fired generation is expected to grow in some markets, including where demand is rising and where fuel switching is occurring.
Clean generation expands as demand rises
The report outlined how the demand mix is changing alongside the overall rise in consumption. In a separate IEA assessment on energy and artificial intelligence published in April 2025, the agency projected global data-centre electricity consumption would more than double to about 945 terawatt-hours by 2030, reaching just under 3% of global electricity consumption in its base case. The IEA said large new loads can appear faster than traditional infrastructure expansion timelines, increasing the importance of coordinated planning for siting, connections and system operation.
The IEA said meeting rising electricity demand while maintaining reliability will require coordinated action across investment, regulation and system operations, with grids and flexibility described as central requirements. It said faster and more predictable permitting, improved grid planning and the deployment of technologies that optimize existing networks can help reduce delays, while targeted investment can expand capacity and resilience. The agency said the scale of the challenge reflects electricity’s growing role in economies, as electrification expands and power systems carry a larger share of final energy demand.