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Electricity demand rose by 4.3% in 2024 and will continue to grow at close to 4% annually through 2027, according to a new report from the International Energy Agency. 

If that sounds familiar, it may be because there’s been a constant stream of headlines about energy demand recently, largely because of the influx of data centers—especially those needed to power the AI that’s spreading seemingly everywhere. These technologies are sucking up more power from the grid, but they’re just a small part of a much larger story. 

What’s actually behind this demand growth is complicated. Much of the increase comes from China, India, and Southeast Asia. Air-conditioning, electric vehicles, and factories all play a role. And of course, we can’t entirely discount the data centers. Here are a few key things to know about global electricity in 2025, and where things are going next.

China, India, and Southeast Asia are the ones to watch.

Between now and 2027, about 85% of electricity demand growth is expected to come from developing and emerging economies. China is an especially major force, having accounted for over half of global electricity demand growth last year.

The influence of even individual sectors in China is staggering. For example, in 2024, about 300 terawatt-hours’ worth of electricity was used just to produce solar modules, batteries, and electric vehicles. That’s as much electricity as Italy uses in a year. And this sector is growing quickly. 

A boom in heavy industry, an increase in the number of air conditioners, and a robust electric-vehicle market are all adding to China’s power demand. India and Southeast Asia are also going to have above-average increases in demand, driven by economic growth and increased adoption of air conditioners. 

And there’s a lot of growth yet to come, as 600 million people across Africa still don’t have access to reliable electricity.

Data centers are a somewhat minor factor globally, but they can’t be counted out.

According to another IEA projection published last year, data centers are expected to account for less than 10% of global electricity demand growth between now and 2030. That’s less than the expected growth due to other contributors like electric vehicles, air conditioners, and heavy industry.

However, data centers are a major storyline for advanced economies like the US and many countries in Europe. As a group, these nations have largely seen flat or declining electricity demand for the last 15 years, in part because of efficiency improvements. Data centers are reversing that trend.

Take the US, for example. The IEA report points to other research showing that the 10 states hosting the most data center growth saw a 10% increase in electricity demand between 2019 and 2023. Demand in the other 40 states declined by about 3% over the same period.

One caveat here is that nobody knows for sure what’s going to happen with data centers in the future, particularly those needed to run AI. Projections are all over the place, and small changes could drastically alter the amount of energy required for the technology. (See the DeepSeek drama.)

One bit I found interesting here is that China could see data centers emerge as yet another source of growing electricity demand in the future, with demand projected to double between now and 2027 (though, again, it’s all quite uncertain).

What this all means for climate change is complicated.

Growth in electricity demand can be seen as a good thing for our climate. Using a heat pump rather than a natural-gas heating system can help reduce emissions even as it increases electricity use. But as we add demand to the grid, it’s important to remember that in many places, it’s still largely reliant on fossil fuels.

The good news in all this is that there’s enough expansion in renewable and low-emissions electricity sources to cover the growth in demand. The rapid deployment of solar power alone contributes enough energy to cover half the demand growth expected through 2027. Nuclear power is also expected to see new heights soon, with recovery in France, restarts in Japan, and new reactors in China and India adding to a stronger global industry.

However, just adding renewables to meet electricity demand doesn’t automatically pull fossil fuels off the grid; existing coal and natural-gas plants are still chugging along all over the world. To make a dent in emissions, low-carbon sources need to grow fast enough not only to meet new demand, but to replace existing dirtier sources.

It isn’t inherently bad that the grid is growing. More people having air-conditioning and more factories making solar panels are all firmly in the “positive” column, I’d argue. But keeping up with this breakneck pace of demand growth is going to be a challenge—one that could have major effects on our ability to cut emissions. 

Now read the rest of The Spark

Related reading

Transmission equipment is key to getting more power to more people. Here’s why one developer won’t quit fighting to connect US grids, as reported by my colleague James Temple.

Virtual power plants could help meet growing electricity demand for EVs in China, as Zeyi Yang lays out in this story.

Power demand from data centers is rising, and so are emissions. They’re set to climb even higher, as James O’Donnell explains in this story from December.

STEPHANIE ARNETT/MIT TECHNOLOGY REVIEW

Another thing

Competition is stiff in China’s EV market, so some automakers are pivoting to humanoid robots. With profit margins dropping for electrified vehicles, financial necessity is driving creativity, as my new colleague Caiwei Chen explains in her latest story. 

Keeping up with climate

The Trump administration has frozen funds and set hiring restrictions, and that could leave the US vulnerable to wildfire. (ProPublica)

US tariffs on imported steel and aluminum are set to go into effect next month, and they could be a problem for key grid equipment. The metals are used in transformers, which are in short supply. (Heatmap)

A maker of alternative jet fuel will get access to a $1.44 billion loan it was promised earlier this year. The Trump administration is exploring canceling promised financing, but this loan went ahead after a local representative pressured the White House. (Canary Media)

A third-generation oil and gas worker has pivoted to focus on drilling for geothermal systems. This Q&A is a fascinating look at what it might look like for more workers to move from fossil fuels to renewables. (Inside Climate News)

The Trump administration is working to fast-track hundreds of fossil-fuel projects. The US Army Corps of Engineers is speeding up permits using an emergency designation. (New York Times)

Japan’s government is adopting new climate targets. The country aims to cut greenhouse-gas emissions by more than 70% from 2013 levels over the next 15 years and reach net zero by 2050. Expansion of renewables and nuclear power will be key in the plan. (Associated Press)

A funding freeze has caused a whole lot of confusion about the state of federal financing for EV chargers in the US. But there’s still progress on building chargers, both from government funds already committed and from the private sector. (Wired)

The US National Oceanic and Atmospheric Administration (NOAA) is the latest target of the Trump administration’s cuts. NOAA provides weather forecasts, and private industry is reliant on the agency’s data. (Bloomberg)