Global electricity demand is accelerating toward a projected 30,700 terawatt-hours by 2027, driven by expanding industrial activity, increased air conditioning use, and growing electric vehicle fleets, according to the International Energy Agency.
Solar Power Surges Past Wind Amid LNG Market Disruptions
Solar energy is providing the bulk of new renewable capacity, with generation expected to grow by roughly 600 terawatt-hours, matching record increases from the previous year. According to the International Energy Agency, solar is on track to surpass wind to become the world’s second-largest source of renewable electricity, trailing only hydropower. This rapid expansion is helping nations diversify supply networks while natural gas markets face intense pressure from Middle East conflicts.
Shipment disruptions through the Strait of Hormuz have pushed liquefied natural gas prices in Europe and Asia to levels not seen since the 2022-23 energy crisis. While North American shipments have eased some of the burden, rising renewable generation has protected power systems by lowering reliance on imported fuels. Even so, countries such as Bangladesh and Pakistan have seen electricity consumption squeezed by high fuel costs.
Data Centers and Weather Shape US and Global Demand
Electricity consumption in the United States and the European Union is projected to grow by nearly 2%. In the US, commercial data centers are driving the upward trend after two decades of flat energy use. Meanwhile, weather remains a major variable. The International Energy Agency warns that a stronger-than-expected El Niño could increase air conditioning loads while simultaneously suppressing wind and hydropower output in vulnerable regions.
Did you know? Global electricity consumption is expected to jump from 28,600 terawatt-hours in 2025 to 30,700 terawatt-hours in 2027, according to International Energy Agency data.
Coal Emissions Rise Temporarily as Grids Demand Flexibility
Global carbon emissions from the power sector are forecast to rise by roughly 1% before leveling off. High gas prices have triggered fuel switching to coal in certain markets, though strong nuclear output and continued renewable growth are expected to cap further emissions spikes. At the same time, spot wholesale electricity prices in the European Union and Japan jumped over 30% year over year during the second quarter.
The influx of variable renewable energy has also increased the frequency of negative wholesale prices in select markets. According to the International Energy Agency, power grids require greater flexibility through battery storage and demand response to balance abundant wind and solar generation.
Frequently Asked Questions
- When will renewables overtake coal? According to the International Energy Agency, renewables are expected to become the world’s largest source of electricity.
- What is driving global electricity demand? Industry, air conditioning, electric vehicle charging, appliances, and data centers are the primary drivers behind the 3.6% demand growth forecast.
- How are natural gas disruptions affecting power markets? LNG shipment interruptions through the Strait of Hormuz have driven up gas prices, prompting some Asian and European countries to switch temporarily to coal.
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