Surge in Global Electricity Demand
Global electricity consumption is expected to increase at its fastest pace in years over the 2025–2027 period. After rising by an estimated 4.3% in 2024, demand is forecast to grow around 4% annually through 2027. This implies an unprecedented addition of roughly 3,500 TWh over three years – equivalent to adding the entire yearly electricity consumption of Japan to the world’s demand each year. Key drivers behind this surge include expanding industrial production, greater use of air conditioning, accelerating electrification of transport and buildings, and the proliferation of data centres worldwide. The International Energy Agency (IEA) notes that these trends are “raising the curtain on a new Age of Electricity,” with power increasingly at the foundation of the global economy.
Global power demand is set to grow 4% annually through 2027, led by Asia
Asia’s Dominance in Demand Growth
Emerging and developing economies – led by Asia – are the main engines of growth in electricity demand. These countries are projected to account for around 85% of the global demand increase to 2027, with China alone contributing more than half of the rise. China’s power consumption jumped by about 7% in 2024 and is expected to continue growing ~6% annually on average through 2027. India and the nations of Southeast Asia are also experiencing robust demand increases, propelled by rapid economic expansion and rising appliance ownership (notably air conditioners). For example, India’s electricity demand is forecast to grow 6.3% per year on average during 2025–2027, outpacing its 2015–2024 average growth of 5%. By contrast, Africa’s growth is much slower – and an estimated 600 million people in sub-Saharan Africa still lack access to electricity – underscoring the regional disparities in the new growth era.
Industrial Sector’s Impact
A major factor in Asia’s electricity boom is surging industrial power usage. In China, industry now consumes roughly 60% of all electricity, far above the ~32% average industrial share in OECD countries. Industrial activity accounted for nearly half (48%) of the increase in China’s electricity demand from 2022 to 2024. Notably, the rapid expansion of manufacturing for solar PV modules, batteries, electric vehicles (EVs) and related materials has added substantially to consumption. These emerging “new energy” industries in China consumed over 300 TWh of electricity in 2024 – about as much as the entire country of Italy uses in a year. This segment alone contributed around one-third of the growth in Chinese industrial demand and about 16% of China’s total demand growth over 2022–2024. The trend reflects a broader electrification of industry: beyond new manufacturing, some sectors are replacing fossil-fuel heating with electric heating (e.g. in chemicals and refining), and industrial heat pumps are increasingly being deployed .
Developed economies have had a different dynamic – many saw flat or declining electricity use for over a decade due to efficiency gains – but are now also rebounding. Advanced economies (like the EU, United States, Japan, Korea, Australia) are expected to contribute about 15% of global demand growth in 2025–2027 as their electricity consumption rises again. New loads such as EV charging, heat pumps, and expanding data centers are pushing power usage upward after a period of stagnation. For instance, U.S. electricity demand hit a record high in 2024 (up 2% year-on-year) and is now projected to grow ~2% annually over the next three years – equivalent to adding the electricity demand of California over that period. In Europe, after two years of decline, the EU’s power demand in 2024 inched up by 1.4%, driven largely by household and commercial sectors (more heat pumps, EVs and data centers) even as industrial demand remained sluggish .
Shifting Supply: Renewables and Emissions
Record-high growth in low-carbon power supply is forecast to meet essentially all of the new demand through 2027. According to the IEA, renewables (solar, wind, hydropower) together with nuclear are on track to account for about 95% of the increase in global generation in this period. By 2025, renewables are expected to provide over one-third of the world’s electricity – overtaking coal as the largest source of generation. In fact, coal’s share of the global power mix is projected to fall below 33% for the first time in a century around the mid-2020s. Rapid deployment of ever-cheaper solar photovoltaics is leading the charge: solar output hit 2,000 TWh in 2024 (about 7% of global generation, up from 5% in 2023). Over 2025–2027, roughly 600 TWh of additional solar generation will come online each year – equivalent to the annual electricity use of South Korea. Solar alone is set to deliver almost half of global demand growth during the forecast period. Wind power is also expanding steadily and is expected to supply around one-third of the additional demand worldwide. Meanwhile, nuclear generation is rebounding to record levels, driven by the recovery of France’s reactors, restarts in Japan, and new reactors coming online in China, India, Korea and elsewhere. This strong growth in renewables and nuclear is gradually edging out fossil fuels in the power mix.
Coal remains dominant, but renewables are growing rapidly across Southeast Asia
Consequently, CO₂ emissions from electricity generation are nearing a plateau. Global power-sector CO₂ emissions increased by about 1% in 2024 to 13.8 billion tonnes – the highest of any sector – but further rises are expected to stall out by 2025–2027. The surge of clean energy is projected to offset electricity demand growth so that emissions flatten (after a 1.4% increase in 2023). Notably, global coal-fired generation is slated to stagnate over the next few years. Declining coal use and emissions in Europe and the U.S. will mostly counterbalance continued emissions growth in India and Southeast Asia during this period. As a result, coal’s share of generation drops below one-third and power sector emissions stop climbing, although uncertainty in China – which accounts for over half of coal power output – remains a wild card for future emissions trends .
Vietnam’s Electricity Outlook
Vietnam exemplifies the rapid electricity growth and evolving energy mix in emerging Asia. The country’s electricity consumption has surged eightfold since 2002, reaching over 240 TWh in 2022. This dramatic rise was underpinned by industrialisation – industry is Vietnam’s largest electricity user, with particularly strong demand growth from the manufacturing sector. Residential and commercial usage have also climbed quickly as the economy developed and access to electricity became nearly universal.
Vietnam’s power mix is shifting, with coal surpassing 50% share by 2027
To fuel this soaring demand, Vietnam’s power generation expanded rapidly on multiple fronts. From 2000 to 2010, natural gas output grew the most; then in the 2010s, coal and hydropower capacity boomed with many new plants coming online. In just the last few years, solar PV saw an unprecedented boom, making Vietnam one of the largest solar markets in Southeast Asia. As of 2022, coal-fired power still supplied about 41% of Vietnam’s electricity, followed by hydropower (35%), natural gas (11%), and solar PV (~10%). However, the country is now pivoting towards cleaner energy under its newly approved Power Development Plan VIII (PDP8). PDP8 lays out a roadmap to transform Vietnam’s electricity sector through 2030 with a vision to 2050. Alongside robust economic growth, the plan projects electricity demand to double by 2030 and rise about fivefold by 2050 – reaching nearly 1,200 TWh in 2050. Meeting this growth will require a massive expansion of generation capacity, but with a different mix: Vietnam aims to peak its unabated coal power generation by the mid-2020s and sharply scale up gas and renewables thereafter.
Notably, PDP8 increases the targets for renewable energy. Excluding large hydro, Vietnam has raised its 2030 target for installed non-hydro renewables capacity to 21% (of total capacity), up from 9.4% in previous plans. At the same time, the planned share of coal-fired capacity in 2030 was cut from 52% (earlier projection) down to 43%. In the longer term, the strategy envisions wind and solar becoming the dominant sources of electricity by 2045–2050, complemented by hydropower, natural gas, and significant additions of new fuels like biomass, hydrogen, and ammonia (used in power plants to reduce emissions). Consequently, investment requirements are estimated to soar – on the order of $30 billion per year by 2030 – to build out generation and grid infrastructure. The payoff would be a cleaner and more secure energy system: under PDP8, Vietnam’s power-sector CO₂ emissions are expected to peak by 2030 at around 250 million tonnes and then decline to ~30 million tonnes by 2050, aligning with the country’s net-zero by 2050 commitment.
Need for Flexibility and Reliability
As Vietnam and other countries integrate more renewable energy, ensuring grid flexibility and reliability is becoming a critical challenge. Already, some power systems have experienced periods of negative electricity prices – for instance in parts of Australia, the United States (California), and Europe – which broadly signal insufficient flexibility in the system. Such occurrences often happen when renewable output is very high and demand is low, indicating the grid’s limited ability to absorb excess power or reduce supply. While negative prices can incentivize more flexible resources (like storage or demand response) to come online, price signals alone may not be enough. The IEA emphasizes that appropriate regulations, market designs and tariff structures are also essential to foster flexibility.
Investments in dispatchable back-up capacity and energy storage, as well as leveraging demand-side response and cross-border interconnections, will be vital to maintain electricity security in this new landscape. As both electricity supply and demand become more weather-dependent (due to renewables and climate-related usage swings), having sufficient reserves and responsive systems is crucial. In practical terms, this means upgrading grids, deploying batteries and other storage at scale, enhancing system operations, and possibly keeping some gas-fired plants as a flexibility cushion even as their overall generation declines. Strengthening these capabilities will help countries like Vietnam keep the lights on and fully capitalize on low-carbon energy growth, ensuring that the “Age of Electricity” is one of both sustainable and secure power supply.
📚 Sources
International Energy Agency (IEA).
Electricity 2025: Analysis and Forecast to 2027. Paris: IEA, 2025.
🔗 https://www.iea.org/reports/electricity-2025
International Energy Agency (IEA) & Viet Nam Ministry of Industry and Trade (MOIT).
Achieving a Net Zero Electricity Sector in Viet Nam: Technical Report.
Paris: IEA, 2024.
🔗https://www.iea.org/reports/achieving-a-net-zero-electricity-sector-in-viet-nam
