Fatih Birol, Executive Director of the International Energy Agency (IEA), announced at a press conference in Seoul that rising electrification rates continue to be the main pillar of global energy investment. He emphasized that "electricity demand is increasing three times faster than total energy demand." These statements come amid concerns about the potential threats that artificial intelligence poses to humanity.
Challenges and Opportunities on the Path to Electrification
Birol stated that the shift towards increased electrification is firmly supported by capital markets. He noted that electrification "is not a bed of roses," adding that this is a clear path that must be followed, despite concerns that investments in artificial intelligence may decline due to existing threats. However, Birol warned that higher electrification costs and the slow expansion of the electricity grid compared to rising electricity demand could limit global electrification rates.
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Global Electricity Demand Trends
Global electricity demand is increasing at the fastest rate in the past 15 years and is expected to continue this trend until the end of the current decade. In an annual report on electricity trends, Birol announced that the "age of electricity" has begun with the advent of artificial intelligence infrastructure, advanced manufacturing, and electrification. It is projected that global electricity demand will grow by an average of over 3.5% per year until the end of the current decade.
Emerging economies, including China, India, and the Southeast Asian region, will account for 80% of the additional electricity demand by 2030. Additionally, advanced economies will see growth in electricity demand after 15 years of stagnation. Birol added that artificial intelligence, data centers, and advanced manufacturing will contribute to the return of growth in electricity demand in advanced economies.
Electricity demand in the United States is expected to increase by 2.1% in 2025 and is projected to grow by approximately 2% annually until 2030. Birol emphasized that the rapid expansion of data centers will account for half of this increase.
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