Stockholm (NordSIP) – Climate change is driving up global energy demand, but much of that growth is being met by renewable energy according to the International Energy Agency’s (IEA) latest Global Energy Review, which was published on 24 March 2025. The IEA monitors demand, supply, and emissions for the full range of energy sources used around the globe, including coal, nuclear, and renewables. 2024 saw energy demand increase by 2.2% across the board, which is faster than the 10-year average.
Although emerging economies drove 80% of the growth in energy demand, developed markets returned to growth following several years of decline. Annual energy demand in the European Union (EU) grew for the first time since 2017. The drivers behind this renewed growth in global demand provide an insight into some of the changes affecting the global economy as it faces up to the climate crisis.
Earlier this month the World Meteorological Organisation (WMO) issued a stark warning, with 2024 recorded as the warmest year since records began 175 years ago. This has led to a surge in electricity demand in both developed and emerging economies, as nations attempt to cope with more frequent and severe heat waves. The proliferation of energy intensive air conditioning is one of the factors behind last year’s 4.3% growth in global energy demand. The low-carbon transition also means that heavy industries are seeking to electrify their operations and electricity grids must also satisfy demand from a rapidly growing fleet of electric vehicles (EVs). These factors combined with the ongoing digitalisation trend and boom in artificial intelligence (AI) have resulted in the power sector accounting for almost two thirds of the global growth in energy demand.
Source: IEA (2025), Global Energy Review 2025
Despite the growth in demand being partly driven by climate change, there are positive signs to be gleaned from the IEA data regarding the supply side. 80% of the growth in electricity generation in 2024 can be attributed to low-carbon sources. Renewables such as wind and solar supplied 32% of total global electricity generation last year, a figure that rises to 40% with the inclusion of nuclear power. Although fossil fuel power generation continues to grow, it is being far outpaced by renewables. In 2024, the combined share of solar and wind generation with the EU exceeded that of oil and gas for the first time. Another positive indicator from the IEA report is the continued decoupling of increases in GHG emissions from global economic growth.
Commenting on the publication of the latest report IEA Executive Director Fatih Birol said: “There are many uncertainties in the world today and different narratives about energy – but this new data-driven IEA report puts some clear facts on the table about what is happening globally. What is certain is that electricity use is growing rapidly, pulling overall energy demand along with it to such an extent that it is enough to reverse years of declining energy consumption in advanced economies. The result is that demand for all major fuels and energy technologies increased in 2024, with renewables covering the largest share of the growth, followed by natural gas. And the strong expansion of solar, wind, nuclear power and EVs is increasingly loosening the links between economic growth and emissions.”
