Nov 12, 2025
The era of electricity has begun.
Global electricity demand is increasing much more rapidly than overall energy use, with renewables growing faster than any other significant energy source, according to the latest World Energy Outlook (WEO) from the IEA.
IEA executive director Fatih Birol stated, "Last year, we said the world was moving quickly into the age of electricity — and it's clear today that it has already arrived."
Electricity demand is rising due to households, mobility, cooling, and increasingly for data and AI services. The IEA predicts power demand will increase by around 40% by 2035 in two scenarios, and by over 50% in its Net Zero Emissions (NZE) by 2050 scenario.
Solar energy leads the growth of renewable energy in all scenarios, and the IEA foresees a resurgence for nuclear energy with both large plants and small modular reactors. Birol noted that the increase in power consumption is not confined to emerging economies, as demand driven by data centers and AI is also rising in advanced nations. The IEA estimates global investment in data centers will reach $580 billion by 2025, exceeding the $540 billion being spent on global oil supply.
The IEA outlines three scenarios in its 2025 WEO, none of which are forecasts. The Current Policies Scenario (CPS) reflects existing policies, the Stated Policies Scenario (Steps) considers a wider array of proposed but not yet adopted policies, and the NZE scenario outlines a path toward the 2050 goal in line with the Paris climate agreement, acknowledging that each country will follow its own route.
Since 2015, global investment in electricity generation has surged by almost 70%, yet annual spending on grids has increased at less than half that rate due to slow investment, lengthy permitting, and tight markets for certain components hindering grid projects.
The IEA also cautioned about the energy sector’s need to prepare for security risks associated with rising temperatures. The global temperature increase in all scenarios exceeds 1.5°C above pre-industrial levels "on a regular basis by around 2030." The Paris agreement aims to limit this increase to "well below" 2°C and strives for a 1.5°C cap.
Annual global energy-related CO2 emissions hit a record 38 billion tons in 2024 and are expected to stay around this level until 2050 in the CPS. The 2050 emissions level is 10 billion tons lower than previously modeled by the IEA in 2019.
CPS and Steps indicate temperature rises of nearly 3°C and 2.5°C, respectively, by 2100. The NZE scenario suggests global warming will "peak around 2050 at about 1.65°C and decline slowly thereafter, primarily due to proactive CO2 removal measures," according to the IEA.
IEA executive director Fatih Birol stated, "Last year, we said the world was moving quickly into the age of electricity — and it's clear today that it has already arrived."
Electricity demand is rising due to households, mobility, cooling, and increasingly for data and AI services. The IEA predicts power demand will increase by around 40% by 2035 in two scenarios, and by over 50% in its Net Zero Emissions (NZE) by 2050 scenario.
Solar energy leads the growth of renewable energy in all scenarios, and the IEA foresees a resurgence for nuclear energy with both large plants and small modular reactors. Birol noted that the increase in power consumption is not confined to emerging economies, as demand driven by data centers and AI is also rising in advanced nations. The IEA estimates global investment in data centers will reach $580 billion by 2025, exceeding the $540 billion being spent on global oil supply.
The IEA outlines three scenarios in its 2025 WEO, none of which are forecasts. The Current Policies Scenario (CPS) reflects existing policies, the Stated Policies Scenario (Steps) considers a wider array of proposed but not yet adopted policies, and the NZE scenario outlines a path toward the 2050 goal in line with the Paris climate agreement, acknowledging that each country will follow its own route.
Since 2015, global investment in electricity generation has surged by almost 70%, yet annual spending on grids has increased at less than half that rate due to slow investment, lengthy permitting, and tight markets for certain components hindering grid projects.
The IEA also cautioned about the energy sector’s need to prepare for security risks associated with rising temperatures. The global temperature increase in all scenarios exceeds 1.5°C above pre-industrial levels "on a regular basis by around 2030." The Paris agreement aims to limit this increase to "well below" 2°C and strives for a 1.5°C cap.
Annual global energy-related CO2 emissions hit a record 38 billion tons in 2024 and are expected to stay around this level until 2050 in the CPS. The 2050 emissions level is 10 billion tons lower than previously modeled by the IEA in 2019.
CPS and Steps indicate temperature rises of nearly 3°C and 2.5°C, respectively, by 2100. The NZE scenario suggests global warming will "peak around 2050 at about 1.65°C and decline slowly thereafter, primarily due to proactive CO2 removal measures," according to the IEA.