Electricity demand surges for the world’s two biggest polluters

China and the US, the world’s two top greenhouse gas polluters, could burn through a lot more electricity over the next couple of years, according to the latest forecast from the International Energy Agency (IEA). The steepest rise in global electricity demand in a while is expected over the next few years, with much of that coming from new data centers and the manufacturing of electric vehicles, batteries, solar panels, and semiconductors in the two countries.

That growth reflects broader changes across the world when it comes to how people consume information and what powers their lives. More vehicles and home appliances run on electricity these days. And new AI tools have led to a boom in energy-hungry data centers. That makes it all the more urgent to deploy new sources of energy that can make sure homes and businesses have enough electricity without creating a lot more pollution in the process.

“The acceleration of global electricity demand highlights the significant changes taking place in energy systems around the world and the approach of a new Age of Electricity. But it also presents evolving challenges for governments in ensuring secure, affordable and sustainable electricity supply,” Keisuke Sadamori, IEA director of energy markets and security, said in a Friday press release.

Globally, growth in demand is expected to be equivalent to adding more than Japan’s entire annual electricity consumption each year between now and 2027, according to the IEA. Most of that growth comes from countries whose economies are considered to be developing or emerging, including China. But so-called “advanced” economies, including the US, are also beginning to consume more electricity than they have in the past.

It’s important to note that rising electricity demand doesn’t necessarily correlate with economic growth. China’s electricity consumption has grown faster than its economy since 2020, according to the IEA. Its manufacturing of solar panels, EVs, and batteries is a big reason why; those three industries accounted for a third of the rise in electricity demand in recent years. Chinese automaker BYD rivals Tesla when it comes to selling the most electric cars in the world. Solar supply chains are still concentrated in China, despite trade sanctions against products tied to accusations of labor and human rights abuses in Xinjiang province. And on Monday, China announced new policies to boost battery production.

Artificial intelligence is a big part of the story, too. China-based startup DeepSeek recently announced major advances in its AI models. That includes significant gains in energy efficiency, which creates more uncertainty about how much energy AI might use in the future. Even so, the IEA says electricity use by data centers in China could double by 2027. The growth of 5G networks in China is also eating up more electricity, according to the IEA.

Electricity demand has either flatlined or fallen over the years in advanced economies including the US, Canada, the European Union, Japan, and Korea. Even with economic growth, that’s been the case since around 2009 thanks to the development of more energy-efficient technologies. Now, the IEA expects demand to rise as a growing number of data centers, EVs, electric heat pumps, and air conditioners suck up electricity from power grids.

After China, the US currently uses the most electricity and creates the most greenhouse gas emissions causing climate change. Its electricity demand dipped by 1.8 percent in 2023 but rebounded last year and is now expected to grow by around 2 percent on average each year through 2027. That might sound like a small percentage, but it adds up to the equivalent of California’s total electricity demand over three years. Data centers are driving that trend, with companies making plans to build out new gas infrastructure and develop new nuclear reactors to satiate growing demand from data centers. Generative AI has also increased demand for semiconductors, and chip manufacturing is forecast to burn through increasing amounts of electricity in the US.

Electrification — getting more buildings and modes of transportation to run on electricity — isn’t necessarily a bad thing as long as that electricity comes from cleaner sources of energy. China and the US are both heavy fossil fuel users, with fossil fuels generating around 60 percent of each country’s electricity mix. The Trump administration just abandoned US climate goals, instead favoring oil and gas development and efforts to make the US the “AI capital of the world.”

Nevertheless, pollution doesn’t have to go up with electricity demand. With solar and onshore wind farms already being the cheapest new sources of electricity in most of the world, renewable energy is growing quickly. Renewables are on track to beat coal and generate more than a third of the electricity the world uses this year and could meet as much as 95 percent of new electricity demand through 2027, the IEA says. It anticipates “record-high” electricity generation from both renewables and nuclear reactors over the same period. That leads to a very hopeful prediction from the IEA — that planet-heating carbon dioxide emissions from generating electricity could plateau globally sometime in the next few years.