The global energy market is undergoing a major transformation, driven by electrification and the rise of renewable energy sources. The latest report from the International Energy Agency (IEA) shows that the increasing demand for electricity is largely being absorbed by sustainable energy. This is excellent news for the energy transition and the goal of a low-carbon economy. 

Explosive Growth in Electricity Consumption

Global electricity consumption increased by 4.3% in 2024, nearly double the average annual rise of the past ten years. This growth is mainly driven by the electrification of transport, industry, and households. The rise of electric vehicles (EVs) plays a particularly important role in this increasing demand.

However, the IEA report indicates that concerns about a potential lack of grid capacity are largely unfounded. The expansion of renewable energy sources, such as solar and wind power, has made it possible to absorb this growing demand without major difficulties.

Renewable Energy as a Response to Increasing Demand

One of the key takeaways from the report is that renewable energy was the main driver of electricity production growth in 2024. The increasing share of renewables has further reduced dependence on fossil fuels. This not only has a positive impact on climate goals but also demonstrates that the energy transition is accelerating.

CO2 Emissions at Their Lowest Level in 50 Years

In addition to rising electricity consumption and the expansion of renewable energy, the IEA report highlights a significant reduction in CO2 emissions in developed economies. In 2024, emissions declined by 1.1%, reaching their lowest level in 50 years. This is an important milestone, demonstrating that the global energy market can evolve toward a more sustainable model without hindering economic growth.

Declining Oil Demand

Another striking fact is the decrease in oil’s share of total energy demand. For the first time, oil accounted for less than 30% of global energy consumption, with growth  limited to just 0.8%. This trend reflects the impact of the energy transition and the growing adoption of electric mobility, which is steadily gaining market share at the expense of fossil fuels.

Challenges: The Need for a Flexible Electricity Grid

The energy transition and increasing electrification bring new opportunities but also challenges, particularly in grid management. The rising demand for electricity and the rapid growth of renewable energy require a modernized and more flexible electricity grid. Grid operators are therefore investing heavily in expanding and optimizing infrastructure to efficiently manage future energy flows.

A key factor in this adaptation is flexibility. Technologies such as  Vehicle-to-Grid (V2G), which allows electric vehicles not only to consume but also to return energy to the grid, can help balance demand peaks. Similarly, battery storage, smart energy management systems, and demand-side response play an increasing role in ensuring a stable energy supply.

Moreover,  governments have a crucial role to play  in facilitating grid expansion and supporting investments in innovative solutions. Through a combination of policy measures, technological advancements, and strategic investments, the electricity grid can adapt to evolving energy demands and continue to meet the needs of an increasingly electrified society.

Conclusion: The Energy Market Adapts to Electrification

The figures from the IEA report confirm that the energy market is evolving to support increasing electrification. Despite the sharp rise in electricity consumption, the growth of renewable energy ensures that this demand can be met sustainably. At the same time, CO2 emissions are decreasing, and reliance on fossil fuels is declining, paving the way for a more sustainable future.

The electrification of transport, industry, and households is not a threat to our energy networks but rather an opportunity to optimize energy use and reduce our carbon footprint. The transition to a sustainable energy system is well underway, and the outlook is positive for a climate-friendly future.