electricity demand – Thoughtful Journalism About Energy’s Future – Energi Media

Report on Global Electricity Demand and its Alignment with Sustainable Development Goals

Executive Summary: Global Electricity Demand and Sustainable Energy Transition

A recent analysis by the International Energy Agency (IEA) indicates a robust and sustained growth in global electricity demand through 2026. This trend presents both significant challenges and opportunities for achieving the Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 13 (Climate Action). The projected expansion is primarily driven by industrial activity, electrification of transport, and the increasing digitalization of the economy. The global response to this rising demand involves a critical shift in the energy mix, with renewables, nuclear, and natural gas poised to meet the additional needs, thereby influencing progress towards a sustainable and low-carbon future.

Projected Growth in Electricity Consumption

The report forecasts a significant acceleration in electricity demand, outpacing total energy demand growth. This highlights the increasing electrification of global economies, a key factor in advancing several SDGs.

2025 Forecast: Global electricity demand is set to increase by 3.3%.
2026 Forecast: A further acceleration to 3.7% growth is expected.
Comparative Growth: These rates are substantially higher than the 2015-2023 average of 2.6%, signaling a new phase of intensified electricity use.

Key drivers for this growth, which directly impact SDG 11 (Sustainable Cities and Communities) and SDG 9, include:

Industrial manufacturing and factory operations.
Increased use of household appliances and air conditioning.
Rapid expansion of data centres to support the digital economy.
Growing fleets of electric vehicles (EVs).

Energy Mix Transformation and Climate Action (SDG 7 & SDG 13)

The composition of the global electricity supply is undergoing a significant transformation, crucial for achieving SDG 7.2 (increase share of renewable energy) and mitigating climate change as per SDG 13.

Renewable Energy Ascendancy: Renewables are on track to surpass coal as the largest source of electricity globally by 2026 at the latest. This transition is fundamental to providing clean energy and reducing greenhouse gas emissions.
Nuclear Power Expansion: Nuclear output is projected to reach record highs, supported by reactor restarts and new capacity additions, primarily in Asia. This contributes a stable, low-carbon energy source.
Natural Gas Role: Gas-fired generation continues to displace more carbon-intensive coal and oil in many regions, serving as a transitional fuel.
Impact on Emissions: As a result of these shifts, CO2 emissions from electricity generation are forecast to plateau in 2025 and begin a slight decline in 2026, marking a pivotal step in global climate action efforts.

Regional Dynamics and Economic Implications

Demand growth is unevenly distributed, with significant implications for regional economic development and industrial competitiveness, linking to SDG 8 (Decent Work and Economic Growth).

Asia’s Leading Role: Emerging economies, particularly China and India, are expected to account for 60% of the growth in global electricity consumption through 2026.
Developed Economies: In the United States, the expansion of data centres is driving demand growth above 2% annually. The European Union is projected to see more modest growth of around 1%.
Price and Competitiveness: Significant variations in wholesale electricity prices persist. Higher prices in the European Union compared to the United States and China pose challenges to the competitiveness of energy-intensive industries, affecting sustainable economic growth under SDG 8.

Infrastructure and Policy Imperatives for Sustainable Development (SDG 9)

To manage the growth in demand and the transition to cleaner energy sources securely and affordably, significant investment and policy development are required, directly addressing SDG 9’s call for resilient infrastructure.

The report underscores the following critical needs:

Grid Modernization: Greater investment in electricity grids is essential to accommodate the rising share of variable renewable energy sources.
Energy Storage Solutions: The increasing frequency of negative wholesale prices highlights the urgent need for enhanced energy storage capacity to ensure system flexibility.
Demand-Side Management: Regulatory frameworks and market designs must be adapted to encourage greater demand response, ensuring power systems can meet growing needs securely and affordably, in line with the principles of SDG 7.

Sustainable Development Goals (SDGs) Addressed in the Article

The article on global electricity demand and generation trends addresses several interconnected Sustainable Development Goals. The primary focus is on the energy sector’s evolution, its economic drivers, and its environmental impact.

SDG 7: Affordable and Clean Energy

The entire article revolves around electricity, a modern energy service. It discusses the transition in energy sources, highlighting that “Renewables are expected to overtake coal as the world’s largest source of electricity as early as 2025 or by 2026 at the latest.” This directly relates to increasing the share of clean and renewable energy.
The article also touches upon the “affordable” aspect by discussing wholesale electricity prices, noting that in the EU and US, they “rose by 30-40 per cent” in the first half of 2025 and that price differences “pose challenges to the competitiveness of energy-intensive industries in the European Union.”

SDG 9: Industry, Innovation and Infrastructure

The article emphasizes the need for infrastructure development to support the changing energy landscape. It quotes the IEA Director stating that the expansion of renewables and nuclear “must be matched by greater investment in grids, storage and other sources of flexibility to ensure power systems can meet the growing demand securely and affordably.”
It also links electricity demand directly to industrial activity, mentioning the need to “power factories” and the growth of “data centres” as a significant driver of demand, particularly in the United States.

SDG 13: Climate Action

A key theme is the environmental impact of electricity generation. The article forecasts that due to the rise of renewables, nuclear, and gas displacing coal, “carbon dioxide emissions from electricity generation are currently forecast to plateau in 2025 and record a slight decline in 2026.” This is a direct measure related to climate action.

SDG 8: Decent Work and Economic Growth

The article explicitly links electricity demand to economic activity, stating that “Emerging economies in Asia account for the bulk of global electricity demand growth,” with China and India expected to “drive 60 per cent of the increase in global electricity consumption over 2025 and 2026.” This growth in energy consumption is a proxy for overall economic growth and industrialization.
It also demonstrates a potential decoupling of economic growth from environmental degradation, as electricity demand (linked to economic activity) is projected to grow robustly while CO2 emissions from its generation are expected to plateau and decline.

Specific SDG Targets Identified

Targets under SDG 7 (Affordable and Clean Energy)

Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article directly supports this by stating, “Renewables are expected to overtake coal as the world’s largest source of electricity as early as 2025 or by 2026 at the latest.”
Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology. The article highlights the need for this by calling for “greater investment in grids, storage and other sources of flexibility.”

Targets under SDG 9 (Industry, Innovation and Infrastructure)

Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… to support economic development and human well-being. The article’s call to invest in grids and storage “to ensure power systems can meet the growing demand securely and affordably” is a direct reference to the need for reliable and resilient energy infrastructure.
Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable… with greater adoption of clean and environmentally sound technologies. The shift in the electricity mix, where “gas-fired power generation is set to continue displacing coal and oil in the power sector,” is an example of upgrading the energy infrastructure to be cleaner and more sustainable for industrial use.

Targets under SDG 13 (Climate Action)

Target 13.2: Integrate climate change measures into national policies, strategies and planning. The forecast that “carbon dioxide emissions from electricity generation are currently forecast to plateau in 2025 and record a slight decline in 2026” reflects the outcome of policies and market shifts aimed at mitigating climate change within the energy sector.

Targets under SDG 8 (Decent Work and Economic Growth)

Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation. The article provides evidence for this decoupling trend: “Global electricity demand is expected to expand at one of the fastest sustained paces” (indicating economic growth), while simultaneously, “carbon dioxide emissions from electricity generation are currently forecast to plateau… and record a slight decline.”

Indicators for Measuring Progress

The article mentions or implies several quantitative and qualitative indicators that can be used to track progress towards the identified targets.

Indicators for SDG 7

Share of renewable energy in electricity generation: The article provides a clear, albeit predictive, indicator by stating that renewables will become the “world’s largest source of electricity” by 2025 or 2026, surpassing coal. This directly measures progress towards Target 7.2.
Wholesale electricity prices: The article cites specific figures, such as prices in the EU and US rising “by 30-40 per cent,” and notes that prices in the EU are “double those in the United States.” This serves as an indicator for the “affordability” aspect of SDG 7.

Indicators for SDG 9

Investment in energy infrastructure: While not providing a specific number, the article implies this is a critical indicator by stating that the expansion of renewables “must be matched by greater investment in grids, storage and other sources of flexibility.”
Electricity demand from industrial sectors: The growth in demand from “factories” and “data centres” is mentioned as a key driver, serving as an indicator of industrial activity and infrastructure needs.

Indicators for SDG 13

Volume of CO2 emissions from electricity generation: This is the most direct indicator mentioned. The article provides a specific forecast for this metric, stating that emissions are expected to “plateau in 2025 and record a slight decline in 2026.”

Indicators for SDG 8

Electricity demand growth rate: The article provides precise figures for this indicator, such as a global rise of “3.3 per cent in 2025 and 3.7 per cent in 2026,” and regional figures for China and India. This acts as a proxy indicator for economic growth.
Ratio of CO2 emissions growth to electricity demand growth: This implied indicator measures the decoupling mentioned in Target 8.4. The article shows electricity demand growing robustly while CO2 emissions from its generation are projected to stabilize and fall, indicating a negative growth ratio and successful decoupling.

Summary of SDGs, Targets, and Indicators

SDGs	Targets	Indicators Identified in the Article
SDG 7: Affordable and Clean Energy	7.2: Increase substantially the share of renewable energy in the global energy mix.	Share of renewables in electricity generation (stated to overtake coal by 2025/2026). Wholesale electricity prices (e.g., 30-40% rise in EU/US).
SDG 9: Industry, Innovation and Infrastructure	9.1: Develop quality, reliable, sustainable and resilient infrastructure. 9.4: Upgrade infrastructure and retrofit industries to make them sustainable.	Level of investment in grids, storage, and flexibility (implied as necessary). Electricity demand from data centers and factories (mentioned as a key driver).
SDG 13: Climate Action	13.2: Integrate climate change measures into national policies, strategies and planning.	Volume of carbon dioxide emissions from electricity generation (forecast to plateau in 2025 and decline in 2026).
SDG 8: Decent Work and Economic Growth	8.4: Endeavour to decouple economic growth from environmental degradation.	Global and regional electricity demand growth rates (e.g., 3.3% globally in 2025). Ratio of CO2 emissions growth to electricity demand growth (implied by rising demand and falling emissions).

Source: energi.media