Age of electricity has arrived as IEA flags surging power demand to 2035

IEA

The International Energy Agency says the Age of electricity has arrived, and global power use is accelerating. Fatih Birol says the shift has already arrived and markets must respond now. The latest World Energy Outlook shows electricity demand rising faster than overall energy use.

The report links electricity demand growth to households, mobility, cooling, and digital services. Meanwhile, it expects demand to rise about 40% by 2035 in two scenarios. In its Net Zero pathway, it expects demand to rise more than 50%.

Electricity demand growth accelerates with AI, cooling, and mobility

Electricity demand growth now surges in advanced economies because data centres and AI add new load. The agency estimates global data-centre investment could hit $580bn in 2025. That figure exceeds the $540bn it links to global oil supply spending.

This demand shift changes capital flows across the energy transition. However, utilities must match new load with firm capacity and flexible generation. As a result, corporate buyers will push harder for clean power procurement.

Renewables lead, but grid constraints and heat risks threaten reliability

Renewable energy deployment expands fastest across scenarios, and solar leads new capacity. Meanwhile, nuclear regains momentum for large plants and small modular reactors. Therefore, system planners will rely on more diverse generation mixes.

Grid investment now lags generation spending, and the bottleneck is getting worse. The agency says electricity generation investment jumped nearly 70% since 2015. However, annual grid spending rose at less than half that pace, and slow permitting delays projects.

Heat risk and security risk now threaten power reliability and supply chains. The agency says temperatures exceed 1.5°C regularly around 2030 in all scenarios. Meanwhile, energy-related CO2 hit a record 38bn tonnes in 2024, and it stays near that level in the current-policy case.

The Metalnomist Commentary

Grid investment will decide whether the Age of electricity has arrived stays affordable or turns inflationary. Meanwhile, metals supply chains must scale copper, aluminum, and transformer components. Therefore, policymakers should speed permits and reduce equipment bottlenecks.