Global Electricity: Low-Carbon Sources to Dominate by 2026

Global power demand is rapidly increasing, driven by electrification across industries, transportation, and buildings, alongside emerging technologies like artificial intelligence and data centers. According to the International Energy Agency (IEA), low-emissions sources are poised to cover all of the world’s additional electricity demand over the next three years, marking a significant shift in the global energy landscape.

The Rise of Low-Emissions Electricity

Renewables and nuclear power are experiencing unprecedented growth, enabling low-emissions electricity generation to outpace overall demand growth globally. The IEA forecasts that by 2026, almost half of global electricity production will be low-carbon . This trend is expected to continue, with projections extending to 2030.

Regional Variations in Electricity Demand

While global demand is rising, regional trends vary significantly. Emerging economies in Southeast Asia, China, and India are driving approximately 85% of the growth in electricity demand. Energy-intensive data centers are likewise contributing substantially, with projected consumption equivalent to Japan’s total electricity use by 2026 .

Conversely, advanced economies like the US and Europe experienced declines in electricity demand in 2023, attributed to milder weather and reduced energy intensity in certain industries.

Africa’s Stagnant Electricity Consumption

Per capita electricity consumption in Africa has remained stagnant for over three decades, currently half that of India and 70% lower than in Southeast Asian countries. This highlights a critical gap in economic development and access to essential energy resources.

Challenges to Grid Flexibility and Capacity

As electricity systems integrate a more diverse mix of generation sources, greater flexibility is required to ensure secure and cost-effective operation. A key bottleneck is the increasing strain on grid capacity, leading to congestion and hindering the deployment of modern generation, storage, and demand-side resources. The IEA’s Electricity 2026 report emphasizes the need for regulatory reforms and rapid deployment of technologies to unlock grid capacity .

Carbon Emissions Trends

Despite increasing electricity demand, global carbon emissions from electricity generation are projected to decrease. The IEA estimates a 2.4% reduction in 2024, with further small cuts anticipated in 2025 and 2026 .

The IEA’s Role and Future Outlook

The IEA’s annual Electricity reports, published regularly since 2020, provide crucial analysis of global electricity systems and markets. The 2026 report expands the forecast period to 2030, offering a more comprehensive outlook on future trends. The agency continues to focus on challenges related to grid flexibility, demand response, and utility-scale battery developments .