The International Energy Agency's Global Energy Review 2025, published on 24 March, is the first comprehensive assessment of energy trends in 2024, and its central finding is simple: electricity is now driving global energy demand. World energy demand rose by 2.2 per cent last year, below GDP growth of 3.2 per cent but considerably faster than the average annual increase of 1.3 per cent between 2013 and 2023. Electricity consumption grew by nearly 1,100 terawatt hours, or 4.3 per cent, almost double the average of the past decade. Demand for every major fuel and energy technology increased, with renewables covering the largest share of the growth, followed by natural gas.
Much public discussion has focused on data centres and artificial intelligence as the reason for rising electricity demand. The IEA lists them among the drivers, alongside industry and the electrification of transport. But the Review is clear that record global temperatures, which boosted demand for cooling, played a major role. Our view is that this is the underappreciated story of 2024. Heat is becoming a structural driver of electricity demand, especially in emerging economies, and it raises difficult questions about peak capacity, grid resilience and coal use that energy planners in South Asia, the Middle East and Africa need to address now.
The headline numbers
Emerging and developing economies accounted for more than 80 per cent of the increase in global energy demand in 2024, even though China's growth slowed. Chinese energy consumption rose by less than 3 per cent, half its 2023 rate. Advanced economies saw a return to growth after several years of declines, with demand rising by almost 1 per cent in aggregate.
Renewables set another record. Around 700 gigawatts of new renewable capacity was installed worldwide, a record for the 22nd consecutive year, and nuclear capacity additions reached their fifth highest level in three decades. Renewables and nuclear together provided 80 per cent of the increase in global electricity generation and, for the first time, 40 per cent of total generation.
Natural gas demand grew by 115 billion cubic metres, or 2.7 per cent, well above the average annual increase of around 75 billion cubic metres over the past decade, largely because of higher power demand. Oil demand grew by only 0.8 per cent, and oil's share of total energy demand fell below 30 per cent for the first time, 50 years after it peaked at 46 per cent. Electric car sales rose by more than 25 per cent, reaching one in five cars sold globally.
Heat and coal
The coal story illustrates the role of temperature. Global coal demand rose by 1 per cent in 2024, half the rate of the previous year. But the IEA found that intense heatwaves in China and India, which pushed up cooling needs, contributed more than 90 per cent of the total annual increase in coal consumption. In other words, without exceptional heat, coal demand would have been close to flat.
Global energy-related carbon dioxide emissions rose by 0.8 per cent to a record 37.8 billion tonnes, with record temperatures contributing significantly. At the same time, the deployment of solar, wind, nuclear, electric cars and heat pumps since 2019 now prevents 2.6 billion tonnes of emissions a year, about 7 per cent of the global total. Emissions in advanced economies fell by 1.1 per cent to 10.9 billion tonnes, a level last seen 50 years ago, while most emissions growth came from emerging and developing economies other than China.
Why heat matters for planners
Cooling demand peaks at the hottest times of day and year, often in the late afternoon and evening when solar output is declining. That creates a sharp peak that grids must meet with dispatchable capacity, storage or demand management. In countries such as India and Pakistan, summer peaks have repeatedly strained grids, leading to load-shedding and emergency coal or oil use. As temperatures rise and incomes allow more households to buy air conditioners, these peaks will grow faster than average demand.
The policy responses are well known but underused. Minimum efficiency standards for air conditioners can reduce peak demand significantly, since the most efficient models on the market use far less power than the average unit sold, often at little extra cost. Building codes that reduce heat gain, district cooling in dense urban areas and time-of-use tariffs that encourage pre-cooling during sunny hours can all help. Battery storage paired with solar can shift midday generation to the evening peak.
What this means for gas
Gas was the second largest source of new supply in 2024, and much of that growth was in power generation, where gas plants provide flexible capacity to meet peaks. For gas-importing countries, that creates a tension. Gas plants are useful for meeting heat-driven peaks, but imported LNG exposes them to volatile prices. Countries that rely on LNG for peak power need contracts and storage that limit their exposure to price spikes, or alternatives such as batteries that can take over part of the peaking role as their costs continue to fall.
Data centres in perspective
Data centres are an important driver in some advanced economies and China, and their local effects on grids can be severe. But in global terms, the IEA's wider analysis, including its World Energy Outlook 2024, finds that they account for a relatively modest share of total demand growth this decade. For most emerging economies, cooling, industry, and electrification of transport and appliances matter far more. Planning that focuses mainly on data centres risks missing the larger, more widespread drivers.
Our assessment
The Global Energy Review 2025 confirms that electricity is the engine of energy demand growth and that clean sources are meeting most of it. But it also shows how sensitive demand, coal use and emissions are to heat. For emerging economies, rising temperatures are already a structural driver of electricity demand, with peaks that strain grids and push up coal and gas use. Efficiency standards for cooling, storage and smarter tariffs should be treated as core parts of energy security strategy, not as afterthoughts.