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Electricity Demand Is Surging

Electricity Demand Is Surging

The Sectors Driving the World’s Power Consumption Boom

November 17, 2025

Global electricity demand isn’t just growing — it’s breaking out of its old pattern.

In 2024, global electricity consumption jumped by about 1,100 terawatt-hours (TWh), a 4.3% increase over 2023. That’s nearly double the average annual growth rate of the past decade and one of the largest jumps ever seen outside the immediate rebound from COVID. Electricity demand grew faster than global GDP and nearly twice as fast as total energy demand, powered by three reinforcing trends:

relentless electrification of transport, industry and heating,
a wave of digital infrastructure (AI, data centers, crypto),
and record-breaking heat driving air-conditioning loads.

This is the world’s new power consumption boom. The interesting part isn’t just how much demand is growing, but who is responsible. The answer is no longer just “heavy industry” or “people turning on the lights.” The surge is coming from a cluster of sectors that are simultaneously decarbonizing, digitizing and heating up — sometimes literally.

Let’s unpack the sectors that are quietly (and not so quietly) rewriting the global electricity story.

1. The Big Picture: A Breakout Moment for Electricity

Electricity’s expanding footprint

Electricity has become the core “currency” of the energy transition. While it still accounts for roughly a fifth to a quarter of final energy consumption today, its share is rising quickly. One recent synthesis drawing on the IEA’s World Energy Outlook 2024 and IRENA’s transition scenarios projects that electricity’s share of final energy could climb from about 23% in 2023 to over 50% by 2050 in a 1.5°C pathway.

Crucially, that doesn’t necessarily mean total energy demand doubles. Because electric technologies — EVs, heat pumps, induction motors — are far more efficient than combustion-based systems, they can deliver more useful energy services from less primary energy. For example:

EVs are 3–5 times more efficient than internal combustion vehicles.
Heat pumps can deliver 2–4 units of heat for every unit of electricity.

So electricity demand can surge even as overall energy demand grows much more slowly or even plateaus.

A geographically uneven boom

Demand growth is highly regional:

Asia is the epicenter. China, India and Southeast Asia are expected to account for more than 70% of global electricity demand growth in the next few years, with Asia’s demand rising around 5% annually. China’s share of global electricity use is projected to climb from ~10% in 2000 to roughly one-third by 2025.
Emerging and developing economies now account for over 80% of incremental global energy demand, with increasingly large shares in electricity.
Africa’s electricity demand is expected to triple by 2040, though this starts from a very low base — over 600 million people still lack access to electricity.
Europe is the outlier: high prices and industrial restructuring have kept electricity demand flat or falling in energy-intensive industries, at least in the short term.

All of this is happening against a backdrop where global electricity demand has nearly doubled since 2000 and is expected to keep climbing.

The key question now is: what is actually driving this new wave of demand? The answer starts in a place that barely registered on power planners’ radar 20 years ago — the cloud.

2. The Digital Deluge: AI, Data Centers and Crypto

If there’s a single symbol of the new electricity boom, it’s not a smokestack — it’s a server rack.

Data centers: from background load to headline risk

Global electricity use in data centers is on track to more than double by 2030 to around 945 TWh, roughly just under 3% of global electricity consumption in that year. From 2024 to 2030, data center electricity use is projected to grow by around 15% per year, more than four times faster than total electricity demand.

Recent analysis estimates:

Data centers consumed about 415 TWh in 2024.
By 2030, their consumption could rival the current total electricity use of Japan.

What changed? Three overlapping trends:

Cloud and hyperscale growth: Tech giants are building hyperscale campuses that each draw hundreds of megawatts of power. One review finds that data centers already accounted for roughly 1–1.3% of global electricity demand in 2022, with projections rising to 1.5–3% by 2026.
5G, streaming and edge computing: More devices, higher bandwidth and low-latency services push more computing (and power demand) into networks and edge facilities.
Artificial intelligence: The big one.

AI: the new super-user

AI isn’t just another workload; it’s an energy hog of a very specific kind.

The IEA estimates that AI-related data centers will see their electricity demand more than quadruple by 2030, making AI the single largest driver of rising data center electricity use.

Independent analysis suggests that by the end of 2025, AI could already account for up to 49% of total data center power consumption, up from perhaps ~20% in 2024, as AI chips and inference workloads explode.

Why so power-hungry?

Training state-of-the-art models requires thousands of GPUs running for weeks — one widely cited estimate puts training a frontier model at tens of GWh of electricity.
Inference — serving billions of user queries — is now the dominant energy component, especially as AI is embedded into search, workplace tools and consumer apps.

The effect is visible in grid planning. In the United States, one analysis cited in recent Oxford research suggests future U.S. electricity demand could rise 9–16% by the late 2020s, with new manufacturing and data centers (especially AI-heavy ones) major contributors in regions like Texas (ERCOT) and the Mid-Atlantic (PJM).

Cryptocurrency mining is smaller than AI in absolute terms but highly visible due to its clustering and sometimes dubious social value:

The Cambridge Bitcoin Electricity Consumption Index (CBECI) estimated that Bitcoin alone consumed about 67–240 TWh in 2023, with a central estimate of 120 TWh — roughly 0.2–0.9% of global electricity demand.
Newer estimates suggest Bitcoin’s annual electricity use may have climbed to around 170+ TWh by 2025.

Combined, data centers and crypto mining are now responsible for roughly 2% of global electricity use and nearly 1% of global energy-related CO₂ emissions, according to IMF analysis.

For grids, the issue is less the global share and more the local concentration. Many miners flock to regions with cheap hydro or coal power, sometimes overwhelming local systems. Russia, for example, has restricted crypto mining in some Siberian regions during winter to prevent power shortages, after miners took advantage of low-cost hydropower.

Why this matters

The digital sector represents a new class of “always-on, highly concentrated” load:

Facilities can draw hundreds of megawatts behind a single connection point.
AI and crypto loads can ramp up quickly, outpacing transmission and generation build-out.
Siting decisions now increasingly depend on access to clean, reliable and cheap electricity, pushing data center developers to negotiate long-term deals for wind, solar and even small nuclear.

In other words, the cloud is becoming one of the world’s largest industrial power users — and it’s just getting started.

3. The Electrification of Transport: EVs as a New Grid Giant

For a century, road transport was almost entirely an oil story. That is changing rapidly.

According to the IEA’s Global EV Outlook 2025:

In 2024, the global EV fleet consumed around 180 TWh of electricity, almost 60% more than in 2023.
That’s already more than the annual electricity consumption of Argentina.
EVs represented about 0.7% of global final electricity consumption in 2024.

From the grid’s perspective, these are still modest numbers — but they’re growing at eye-watering rates.

In the IEA’s demand breakdown for 2024:

Electricity consumption in the transport sector grew by over 8%, largely due to EV uptake.

Some projections suggest that by 2030, EVs could account for more than 4% of Europe’s electricity demand, and even higher shares in China.

Beyond cars: buses, trucks and two-wheelers

The EV story isn’t just passenger cars:

Two- and three-wheelers: There are already about 65 million electric 2/3-wheelers on the road, and this number could reach 210 million by 2030 and 360 million by 2035, over one-third of the total global 2/3-wheeler fleet.
Buses and delivery fleets: City buses and last-mile delivery fleets are electrifying quickly, particularly in China and parts of Europe. Their depot-based fast charging creates new night-time and mid-day peaks.
Heavy trucks: Still early days, but pilot corridors with megawatt-class chargers are emerging, posing challenges for local network capacity.

The grid challenge: it’s not just how much, it’s when

In raw TWh, transport electricity demand is manageable; what complicates things is timing and clustering:

Lots of EVs plugging in after work, around the same time, can spike evening peaks.
High-power fast chargers along highways can create localized demand surges, forcing substation upgrades.
Fleets can either be a headache or a blessing: if managed smartly, they can charge when wind and solar are abundant; if not, they exacerbate peaks.

As more countries push towards bans on new internal combustion car sales in the 2030s, electricity demand from transport will shift from “interesting” to “decisive” for system planning.

4. Industry: The Old Giant Wakes Up Electrified

Industry has always been the biggest electricity consumer. What’s changing now is how it uses electricity — and how fast that use is growing again.

In 2024:

The industrial sector accounted for nearly 40% of total growth in global electricity demand.
Industrial electricity use grew by almost 4%, a marked acceleration from 2023.

This growth is driven by:

Electro-intensive manufacturing — especially production of batteries, solar panels, semiconductors and EV components, heavily concentrated in China and other Asian economies.
Recovery and expansion in steel, chemicals, cement and other heavy industry in certain regions.

From fossil heat to electric heat

Historically, industrial energy demand was dominated by direct fossil fuel use (coal, gas, oil) for process heat. That is starting to shift:

High-temperature processes like electric arc furnace steelmaking are expanding, displacing coal-based blast furnaces.
Many low- to medium-temperature processes — e.g. food processing, textiles, pulp and paper — are moving towards electric boilers and heat pumps, especially where carbon prices or gas prices are high.

In net-zero scenarios, industrial electrification becomes a massive structural driver of electricity demand, especially as:

Green hydrogen production via electrolysis scales up to decarbonize steel, fertilizer, shipping fuel and refining. Electrolysers are extremely electricity-hungry; even moderate hydrogen penetration implies hundreds of additional TWh of demand by the 2030s.

Industrial firms are also increasingly signing long-term renewable PPAs (power purchase agreements) to hedge energy price risk and meet decarbonization targets — effectively tying the fate of global manufacturing capacity to the pace of clean-power deployment.

5. Buildings and Cities: Cooling, Heat Pumps and the Urban Heat Trap

While data centers and EVs grab the headlines, the single biggest driver of the 2024 electricity surge was more mundane: buildings.

Buildings: almost 60% of electricity demand growth in 2024

IEA data show that in 2024:

Global electricity consumption in buildings rose by more than 600 TWh, a 5% increase.
The buildings sector accounted for nearly 60% of total growth in electricity consumption, and its demand grew four times faster than in 2023.

What drove this?

Rising demand for air conditioning, amplified by severe heatwaves in countries such as China and India.
More appliance ownership and electrification of heating, especially via heat pumps.
Growing power use in commercial buildings, including offices that now host local data rooms, cooling-intensive equipment and EV chargers.

Cooling: the quiet giant

Space cooling is one of the fastest-growing sources of electricity demand worldwide:

In 2022, space cooling had the largest increase in demand of any buildings end use, growing by more than 3% year-on-year.
The IEA’s World Energy Outlook 2024 analysis suggests that due to increasing AC ownership and more intense heatwaves, electricity demand linked to air conditioning could be 500 TWh higher in 2030 and 700 TWh higher in 2035 than previously projected — about 20% more than in the baseline — with ~80% of this increase in emerging and developing countries, particularly in Asia.

As incomes rise in hot climates, AC rapidly shifts from luxury to necessity. This is especially true in megacities across South and Southeast Asia, the Middle East and parts of Africa. Each new AC unit is a long-lived commitment to higher peak electricity demand on the hottest days of the year.

Heat pumps: electrifying heat

On the other side of the temperature spectrum, heat pumps are electrifying space and water heating:

In 2023, heat pumps could already meet over 60% of global heating demand with lower CO₂ emissions than high-efficiency gas boilers, thanks to cleaner grids and better technology.
In a 1.5°C pathway, electricity’s share of energy use in buildings is projected to rise from about one-third today to over 70% by 2050, requiring a 14-fold increase in the number of installed heat pumps.

This is structurally bullish for electricity demand: every gas boiler swapped for a heat pump shifts a large chunk of winter heat load onto the grid. While heat pumps are much more efficient than resistive heating or gas boilers, the total impact at scale is still a material increase in kWh consumed.

6. Weather and Climate: Heatwaves as Load Multipliers

Underlying many of these sectoral shifts is an uncomfortable reality: the climate itself is now a major driver of electricity demand.

The IEA’s Global Energy Review 2025 and various news analyses highlight that in 2024:

Global energy demand grew 2.2%, faster than the previous decade’s average.
The growth was led by the power sector: electricity demand surged 4.3%, driven by record temperatures, electrification and digitalization.

Record heatwaves in China and India forced grids to run at full tilt, with peak loads hitting all-time highs:

India saw peak loads at record levels and an 8% forecast rise in electricity consumption in 2024, with long and intense heatwaves as a major driver.

Climate change contributes in a few key ways:

More cooling demand: Hotter summers and more frequent heatwaves push AC use higher and for longer periods.
Peak demand spikes: System peaks now increasingly occur during extreme heat days, not just winter evenings in cold climates.
Weather-sensitive renewables: At the same time, the power system is more reliant on variable renewables like wind and solar, which have their own weather-linked variability.

Put simply, climate change is making electricity demand more weather-sensitive, more volatile and more extreme, just as more sectors depend on it for core services.

7. Crypto, AI and “Optional” Loads: Who Gets the Power?

One emerging fault line in this boom is competition for electricity between “essential” and “optional” uses.

On one side: residential cooling, hospitals, public transport, core industrial processes.
On the other: AI model training, crypto mining, and mega-campus data centers supporting advertising, streaming or speculative finance.

We’re already seeing policy reactions:

Russia’s seasonal bans on crypto mining in low-energy regions to prevent winter shortages.
Growing calls in some countries to tax or cap electricity use by crypto and AI workloads, as proposed in IMF discussions on aligning tax policy with the rising carbon footprint of AI and crypto.

This raises difficult questions: in a constrained grid, should a region prioritize:

an aluminum smelter employing thousands,
air conditioning during a deadly heatwave,
or a server farm training a new AI model?

Regulators are still figuring out frameworks to decide who gets scarce capacity — and at what price.

8. The Paradox: Surging Electricity Demand, Falling Power Emissions?

Here’s the twist: even as electricity demand surges, power sector emissions are not necessarily rising at the same pace — and in some regions they are starting to fall.

Recent analyses show:

Renewables (wind, solar, hydro) plus nuclear supplied the largest share of new energy in 2024, with renewables alone accounting for about 38% of total energy supply growth.
In many forecasts, renewables are expected to cover 95% of net electricity demand growth between now and 2027, with global electricity demand rising ~4% per year and adding around 3,500 TWh in just three years.
Clean electricity (renewables + nuclear) is on track to surpass coal-fired generation worldwide, with solar alone becoming the second-largest low-emissions source behind hydropower in the next few years.

At the same time, electrification reduces primary energy demand by replacing inefficient combustion:

EVs displace oil with electricity at much higher efficiency.
Heat pumps displace gas-based heating with 2–4x more efficient electric heat.

In other words, it’s possible — though by no means guaranteed — to see electricity demand soar while overall fossil fuel use flattens or declines.

The hinge is whether:

New demand is met by low-carbon generation, and
Efficiency improvements keep pace with electrification.

If both are true, the electricity boom becomes an engine of decarbonization rather than a climate liability.

9. What This Means for Grids, Markets and Investors

The surge in electricity demand is not a single-sector story; it’s a stacked one:

Digital (AI & data centers)
Transport (EVs, buses, trucks, two-wheelers)
Industry (electrified process heat, green hydrogen, battery and chip manufacturing)
Buildings (AC and heat pumps)
Climate (heatwaves and weather extremes)

This stacking has profound implications.

1) Grids need to grow and get smarter

Traditional grid planning assumed slow demand growth and fairly predictable industrial loads. That’s over. Grid operators now have to deal with:

Faster baseline demand growth (4% per year rather than 2–3%).
Lumpier loads (data centers, hydrogen electrolysers, mega-chargers for trucks).
More weather-driven peaks (heatwaves, storms).
Higher shares of variable renewables.

This pushes investment into:

Transmission expansion to bring remote wind/solar to load centers.
Distribution upgrades for EV chargers, heat pumps and rooftop solar.
Flexibility resources — demand response, storage, interconnectors — to match variable supply with increasingly variable demand.

In some markets, the constraint is no longer “is there enough energy over a year?” but “is there enough capacity right here, right now?”

2) Power prices and competitiveness

Regions that can offer cheap, clean and reliable electricity stand to win:

Advanced manufacturing (batteries, semiconductors, green steel) is clustering in places with strong renewable resources and supportive policy.
Data centers and AI infrastructure are increasingly citing power availability as their number-one siting factor, sometimes even more than tax incentives or fibre connectivity.

Conversely, regions with high power prices and grid constraints risk losing industrial capacity, as some European industries already contemplating relocation to lower-cost energy regions demonstrate.

3) Policy: steering the surge

Governments face a delicate balancing act:

Encourage beneficial electrification (EVs, heat pumps, industrial decarbonization).
Manage or price “discretionary” loads (crypto, some AI workloads) so they don’t crowd out essential uses or lock in fossil generation.
Accelerate clean power deployment and grid build-out to stay ahead of demand.

Failure on any of these fronts could lead to:

Supply crunches and blackouts,
Price spikes that undermine public support for decarbonization,
Or a drift back toward coal and gas to keep the lights on — and the GPUs running.

For investors, this boom is both an opportunity and a warning: electricity is rapidly becoming the ultimate bottleneck for growth in the digital, industrial and transport economies.

10. Conclusion: The New Power Map of the World

Electricity demand is surging not because of any single revolution, but because several revolutions are happening at once:

The digital revolution is turning computation into one of the world’s biggest industrial power users.
The mobility revolution is moving transport from oil to the grid.
The industrial revolution 2.0 is electrifying factories and spawning new electrochemical industries like batteries and green hydrogen.
The urban and climate reality is forcing billions of people to cool and heat their homes in a warming, more volatile climate.

Together, these forces are adding thousands of terawatt-hours of new electricity demand in just a few years.

In that world, the countries and regions that thrive will be the ones that can:

Expand low-carbon generation fast enough,
Build grids that are not just bigger but smarter,
And craft policies that channel demand growth into socially valuable uses while keeping the lights on for everyone — from families running air conditioners in a heatwave to the algorithms running in distant server halls.

The surge in electricity demand isn’t a side-effect of the 21st century economy. It is the story of the 21st century economy.