The International Energy Agency’s 2025 analysis of electricity markets is dominated by the issue of surging demand, and how solar PV, wind and resurgent nuclear are set to fill the gap. This is despite Trump’s “drill baby, drill” ambitions in the US.
With the growing dominance of renewables in power generation, solar PV’s rise stands out globally – and in Ireland.
The agency predicts “a new era of electricity” that will test governments, regulators and transmission system operators in providing a secure, affordable and sustainable electricity supply.
Energy price is a critical lever to enhance EU competitiveness. With the EU about to commit to a 90 per cent reduction in carbon emissions by 2040, the critical mechanism is scaled-up renewables.
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Meeting long-term power demand will not be achieved without greater efficiency, but failure to scale up renewables will make it impossible.
The report forecasts growth in low-emissions sources – primarily renewables and nuclear – that “is sufficient, in aggregate, to cover all the growth in global electricity demand over the next three years”.
Solar expanded by 80 per cent in Ireland during 2023, contributing to an overall increase of 4.2 per cent year on year in renewable electricity generation. The agency predicts solar and wind power generation to be the primary drivers of increased renewables here, with average growth of 32 per cent and 12 per cent, respectively, up to 2027.
Demand everywhere is being driven by growing use of electricity for industrial production, increased use of air conditioning/heat pumps, accelerating electrification – especially in transport – and rapid expansion of data centres and 5G networks.
The trend is most pronounced in China, where electricity demand has been growing faster than the overall economy since 2020. This has been fuelled in part by the rapidly expanding electricity-intensive manufacturing of solar panels, batteries, EVs and associated materials.
China may be the world’s worst carbon polluter, but its bet on renewables and electrification is delivering economically. It is also enabling it to pivot ahead of schedule on reducing emissions with some forecasts suggesting they will peak this year.
With the US reversing out of efforts to become the global leader in clean tech, the path has been cleared for China.
