Heatwaves fuel global power demand boom as renewables struggle to keep pace

Intense heatwaves are helping drive the fastest growth in global electricity demand in over a decade, helping keep coal-fired generation online as renewables race to keep up, says the International Energy Agency (IEA).

Electricity demand is expected to grow 4% this year and the same amount again in 2025, up from 2.5% last year, a new IEA report has found.

This increase, which would represent the highest annual growth rate since 2007, is also being driven by robust economic growth and electrification.

The increase in demand highlights the “growing role of electricity in our economies as well as the impacts of severe heatwaves,” said Keisuke Sadamori, IEA director of energy markets and security.

The growth is driven by strong electricity demand in multiple regions and countries. China, which has been adding electricity demand roughly equivalent to that of Germany annually, will see growth of 6.5% this year, and India 8%.

The US will see growth of 3%, rebounding from a 1.6% dip in demand last year, due to “rising demand for air conditioning amid severe heatwaves and the surge in data centre expansions.”

Those heatwaves, which drive power demand for air conditioning units, have not just been in the US. The report noted that May was the hottest month since global records began and the 12th consecutive month of record-high temperatures.

India, Mexico, Pakistan, Vietnam and many other countries also saw “severe heatwaves with surging peak loads due to the increased need for cooling.”

At the same time, the IEA said that renewables have continued their rapid ascent, with their share of global electricity supply forecast to rise from 30% in 2023 to 35% in 2025.

The amount of electricity generated by renewables worldwide in 2025 is forecast to eclipse the amount generated by coal for the first time.

Solar PV alone is expected to meet roughly half of the growth in global electricity demand over 2024 and 2025 – with solar and wind combined meeting up to 75% of the growth.

“It’s encouraging to see clean energy’s share of the electricity mix continuing to rise, but this needs to happen at a much faster rate to meet international energy and climate goals,” said Sadamori.

At the same time, it’s crucial to expand and reinforce grids to provide citizens with secure and reliable electricity supply – and to implement higher energy efficiency standards to reduce the impacts of increased cooling demand on power systems.”

The report also noted the rise of artificial intelligence and resulting increase in electricity demand for data centres as “underscoring the need for more reliable data and better stocktaking measures.”

The report highlights the “wide range of uncertainties concerning the electricity demand of data centres, including the pace of deployment, the diverse and expanding uses of AI, and the potential for energy efficiency improvements.”