PARIS, (Pakistan Point News - 25th Jul, 2026) Global electricity demand is set to grow at a faster pace this year than last – even as power systems worldwide contend with energy market turmoil and volatile prices, according to a new IEA report.
While recent disruptions to global natural gas markets due to the war in the middle East have pushed up electricity generation costs in many regions, strong underlying demand from industry, appliances, cooling, electric vehicles and data centres is expected to keep global electricity consumption on a firm upward trajectory.
The IEA’s latest Electricity Mid-Year Update forecasts that global electricity demand will grow by 3.6% in 2026 and by a further 3.8% in 2027 – up from 3% growth in 2025. Global electricity consumption is projected to reach 30,700 terawatt-hours (TWh) in 2027, compared with 28,600 TWh in 2025.
Renewables are on track to become the world’s largest source of electricity generation in 2026, overtaking coal after reaching near parity in 2025. Renewable generation is set to grow by more than 8% in 2026, and it is poised to increase its share of global electricity generation from 33% in 2025 to 37% by 2027.
Solar power continues to lead growth in electricity supply worldwide. Solar PV generation is set to expand strongly over the next two years, overtaking wind power in 2026 to become the world's second-largest source of renewable electricity generation after hydropower. Solar PV’s global electricity output is forecast to increase by around 600 TWh in 2026, matching the record annual growth achieved in 2025, with similarly robust expansion expected in 2027.
The report finds that as renewable generation expands worldwide, negative wholesale electricity prices are becoming more common in some markets. These occurrences broadly signal insufficient flexibility in the system due to technical, regulatory or contractual reasons. At the same time, wider price swings throughout the day are increasing the importance of flexibility, including battery storage and demand response, for maintaining reliable and efficient electricity system
The world’s largest economies are set to see strong rises in electricity consumption. In China, demand growth is expected to accelerate to 5.5% in 2026, pushed higher by manufacturing activity and expanding electric vehicle charging. In India, demand growth is forecast to rebound strongly to 7% following weather-related weakness in 2025.
Among advanced economies, growth remains robust at close to 2% in the United States and in the European Union. By contrast, sharply higher fuel costs and supply disruptions are weighing on electricity consumption in more price-sensitive LNG-importing markets in Asia, including Pakistan and Bangladesh.
The report cautions that weather-related developments may affect electricity demand trends significantly, adding uncertainty to the outlook. A stronger-than-expected El Niño event in 2026 could boost electricity demand further by raising cooling needs while simultaneously reducing hydropower and wind generation in some regions, increasing reliance on other sources of generation.
