The International Energy Agency (IEA) has urged increased investment in electrical infrastructure in light of the globally rising electricity consumption in a report released on Wednesday.
“The strong expansion of renewables and nuclear is steadily reshaping electricity markets in many regions,” the IEA’s director of energy markets, Keisuke Sadamori, said in Paris.
“But this must be matched by greater investment in grids, storage and other sources of flexibility to ensure power systems can meet the growing demand securely and affordably,” he said.
For Europe, insurance company Allianz Trade quantified the annual investment need in power grids and energy storage in their latest infrastructure report at €95 billion to €130 billion.
The highest investment need is in Germany, which not only functions as a central hub in the European electricity market but also requires more storage capacity to support the expected growth in renewable energy, Allianz Trade said.
Global electricity consumption is rising
According to new figures from the IEA, global electricity demand is set to increase by 3.3% this year and by 3.7% in 2026, which is twice the growth rate of overall energy demand.
Reasons for the rising electricity demand include the operation of factories, data centres and electric vehicles, as well as the cooling of buildings.
Renewable energies are expected to replace coal as the world’s largest source of electricity this year or next.
At the same time, the IEA expects nuclear power production to reach record levels, driven by the reactivation of reactors in Japan, robust production in the United States and France, and new nuclear power plants, particularly in Asia.
It is forecast that carbon dioxide emissions from electricity generation will peak this year and slightly decline by 2026.
