The International Energy Agency (IEA) is calling for increased investment in energy infrastructure, as revealed in a report released by the agency on Wednesday.
The investments are deemed necessary to cope with the rapidly rising global electricity consumption. “The strong growth of renewable energy sources and nuclear power will transform electricity markets in many regions,” explained Keisuke Sadamori, Director of Energy Markets for the IEA. According to the report, electricity demand is projected to rise by 3.3% this year, a rate twice as fast as the overall energy demand.
Sadamori emphasised that the transition must be accompanied by more investment in networks, storage, and other resources to ensure energy systems remain secure, affordable, and capable of meeting the increasing demand. The rise in electricity demand is partly attributed to the numerous factories, data centres, and electric vehicles reliant on electricity. Furthermore, electricity is crucial for cooling buildings, a factor growing more important due to climate change.
Germany, as a central hub in the European electricity network, faces the greatest need for investment, particularly in storage capacity to accommodate the anticipated growth in renewable energy. Calculations by Allianz Trade suggest that necessary investment costs across Europe could rise to €130 billion annually.
The IEA anticipates that renewable energy will surpass coal as the world’s largest electricity source this year or next. Nuclear power production is also expected to reach record levels, partly due to the reactivation of nuclear plants in Japan and large-scale production in the United States and Japan. The report predicts that CO2 emissions from electricity production will peak this year, with a gradual decline expected from 2026 onward.
