Global electricity demand is expected to accelerate in 2026 and 2027, driven by industry, electric vehicles, air conditioning, appliances and the continued expansion of data centres, according to the International Energy Agency’s latest Electricity Mid-Year Update 2026.
The IEA forecasts global electricity consumption to grow by 3.6% in 2026 and 3.8% in 2027, compared with 3% growth in 2025. By 2027, global electricity demand is projected to reach 30,700 TWh, up from 28,600 TWh in 2025.
The increase comes at a time when electricity systems are facing renewed pressure from volatile energy markets. Disruptions to LNG flows through the Strait of Hormuz have pushed natural gas prices higher in Europe and Asia, raising electricity generation costs and encouraging some countries to temporarily increase coal-fired generation.
At the same time, the transformation of the global power mix is accelerating. Renewables are expected to become the world’s largest source of electricity generation in 2026, overtaking coal. Renewable generation is forecast to grow by more than 8% this year, increasing its share of global electricity generation from 33% in 2025 to 37% by 2027.
Solar PV remains the fastest-growing source. Its global electricity output is expected to increase by around 600 TWh in 2026, while solar is set to overtake wind this year as the world’s second-largest source of renewable electricity after hydropower.
The IEA outlook also highlights a challenge that is becoming increasingly important for energy investment. As variable renewable generation expands, negative wholesale electricity prices are occurring more frequently in some markets, while price differences throughout the day are widening.
As the share of inverter-based resources (IBRs) such as solar PV, wind and battery storage continues to grow, transmission networks are facing new technical and operational challenges. Integrating large volumes of IBRs requires transmission systems to adapt to different patterns of power flows and new requirements for voltage and frequency control, system strength, fault response and overall grid stability. Addressing these challenges will require not only additional transmission capacity, but also improved system planning, monitoring, control and protection to ensure that growing amounts of renewable generation can be integrated reliably and efficiently.
These developments underline the growing need for battery storage, demand response, stronger electricity grids and other sources of system flexibility. With electricity demand rising and new consumers such as data centers placing additional requirements on power systems, investment is increasingly needed not only in new generation capacity but also in the infrastructure required to integrate and manage it efficiently.
These questions are directly relevant to the discussions around regional energy infrastructure, investment and project development that will be at the center of Energy and Investment Days 2026 in Novi Sad.