Global electricity demand is projected to grow by more than 3.5% annually on average through 2030, underscoring the urgent need for increased investment in electricity grids and system flexibility, according to a new report by the International Energy Agency (IEA). The report forecasts that renewables and nuclear power together will account for 50% of the global electricity mix by the end of the decade, up from 42% today, even as natural gas-based generation also expands.
The findings are detailed in Electricity 2026, the IEA’s latest annual assessment of global electricity systems and markets. The report provides an in-depth analysis of recent trends and policy developments, along with forecasts for electricity demand, supply, and carbon dioxide (CO₂) emissions through 2030.
According to the report, electricity demand is set to grow at least 2.5 times faster than overall energy demand during the period, driven by rising industrial electricity use, the continued adoption of electric vehicles, higher air-conditioning demand, and the rapid expansion of data centres and artificial intelligence. While emerging and developing economies will remain the primary drivers of demand growth, advanced economies are also seeing a rebound in electricity consumption after 15 years of stagnation, accounting for about one-fifth of the total increase in global power demand through 2030.
On the supply side, the report notes that electricity generation from renewables, supported by record deployment of solar photovoltaic capacity, is now in the process of overtaking coal-fired generation after nearly matching it in 2025. Nuclear power output has also reached a new record. Together, renewables and nuclear are expected to generate half of the world’s electricity by 2030.
Natural gas-fired power generation is also projected to rise through 2030, supported by increasing electricity demand in the United States and the ongoing shift from oil to gas in the Middle East. In contrast, coal-fired generation is expected to lose ground globally as renewables expand, returning to 2021 levels by the end of the decade. As a result, global CO₂ emissions from electricity generation are forecast to remain broadly flat between now and 2030.
The IEA emphasises that growing electricity demand, a more weather-dependent generation mix, and evolving consumption patterns require a rapid and efficient expansion of electricity grids and system flexibility. Currently, more than 2,500 gigawatts of projects worldwide, including renewables, energy storage, and large-load projects such as data centres, are stalled in grid connection queues.
New analysis in the report suggests that advancing grid expansion, deploying grid-enhancing technologies, and implementing regulatory reforms to enable more flexible grid connections could allow up to 1,600 gigawatts of queued projects to be integrated in the near term. These measures would improve grid utilisation and unlock substantial additional capacity.
“At a moment of significant uncertainty across energy markets, one certainty is that global electricity demand is growing much more strongly than it did over the past decade,” said Keisuke Sadamori, IEA Director of Energy Markets and Security. “In this Age of Electricity, the increase in global power consumption through 2030 is set to be equivalent to adding more than two European Unions. Meeting this demand will require an annual investment in grids to rise by 50% by 2030. Expanding flexibility will also be crucial as power networks continue to evolve, along with a strong focus on security and resilience.”
The report also highlights a sharp rise in utility-scale battery storage installations, which are providing critical short-term flexibility to power systems. Markets such as California, Germany, Texas, South Australia and the United Kingdom have recorded strong growth in utility-scale battery capacity in recent years.
In addition, Electricity 2026 points to electricity affordability as a growing concern. Household electricity prices in many countries have increased faster than incomes since 2019, while elevated prices are also placing pressure on industries and businesses. In response, policymakers are focusing on policies, market designs and regulations that support not only additional investment but also greater flexibility and efficiency across demand, supply and infrastructure use.
The report further stresses the need to strengthen the security and resilience of power systems worldwide, which face increasing risks from ageing infrastructure, extreme weather events, cyberthreats and other emerging vulnerabilities. Modernising system operations and enhancing the physical protection of critical infrastructure will be essential to addressing these challenges, the IEA concludes.
