From potential to power: Seizing the electric moment
- Frederic Godemel
- 06 Oct 2025
- 3 min read
Electricity consumption is projected to grow by approximately 4% annually through 2027, as forecasted by the International Energy Agency (IEA). This growth is driven by industrial expansion, increasing data center usage, and the combined effects of urbanization, digitization, and decarbonization. Over the coming decades, electricity demand is expected to accelerate sharply. However, global infrastructure is not yet prepared to meet this rising need.
- 4%of annual electricity consumption growth through 2027
- 20%of overall energy mix contributed by electricity
- 23%of increase in electricity mobility last year
Electricity’s share of total energy consumption has grown modestly over the past decade, increasing by just 2% to account for about 20% of the overall energy mix. Looking ahead, the next decade is expected to bring significant change, with electricity demand continuing to rise while overall energy demand remains flat, according to the IEA. This decoupling signals that electrification will take a larger share of the energy mix—a shift that holds significant implications for economic and environmental progress.
The growth in electricity demand comes from multiple sources. Around half stems from traditional economic drivers, including new industrial facilities, buildings, and expanded public transportation networks - reflecting the reliance of modern economies on electricity. The other half arises from emerging developments beyond typical economic expansion, such as data centers, artificial intelligence, and other innovative services.
Additionally, there is substantial growth from existing energy usage transitioning to electricity. Key contributors include electric mobility, which saw a 23% increase last year, as well as buildings converting from fossil fuel heating to electric HVAC systems. In industry, similar electrification trends are taking hold. Emerging economies are also experiencing an uptick in air conditioning demand, with Europe expected to follow suit in the near future.
This rapid shift will not be incremental or predictable. Growth will emerge from diverse sources, including established sectors, unpredictable developments, and expanding markets, all occurring simultaneously.
As electrification accelerates, the availability of grid infrastructure is becoming a major bottleneck. The disparity between the rapid pace of technological advancements and the slow progress of grid development creates a pressing challenge. For instance, renewable energy projects often face lengthy delays in connecting to the grid—up to 15 years in the United Kingdom. These delays must be minimized to provide businesses with affordable, clean energy and support their expansion.
The disconnect between the readiness of businesses and infrastructure availability will shape the coming years. With rising electricity demand, prices are expected to increase due to the need for substantial investment in infrastructure and growing competition for access. Businesses that have maximized their energy efficiency will seek greater access to the grid, prompting the need for more innovative energy solutions.
Distributed energy solutions, such as rooftop solar installations, offer a practical way to address infrastructure limitations. These technologies can be implemented much more quickly than large-scale grid projects and are relatively simple to deploy. For example, installing solar panels on a rooftop typically requires less than a year to complete, whereas connecting a wind farm to the grid may take 10 to 12 years. In cities like London or Oxford, grid infrastructure development can add another decade.
While large-scale infrastructure projects remain essential, distributed energy solutions are increasingly crucial for meeting electricity demand. In manufacturing, distributed systems are already proving viable, though their adoption remains underutilized.
In the United States, there is a clearer understanding of distributed energy's potential, reflecting a cultural emphasis on independence. In contrast, Europe’s reliance on government and regulatory authorities has slowed the uptake of these systems. Nonetheless, promising examples exist, such as Schneider Electric’s flagship building in Grenoble, France—IntenCity—which exemplifies energy efficiency through active solutions and data-driven innovation.
As demand for distributed energy solutions grows, these systems will transition from being optional to becoming essential components of modern energy strategies.
While electrification is often discussed in terms of decarbonization, modernization is an equally important outcome. Many industrial facilities, particularly in Europe and the United States, rely on outdated processes powered by fossil fuels—unchanged for decades. Electricity, as the energy source of modern economies, can drive this transformation.
Modernizing existing infrastructures
Challenges mean opportunities
Electrification is not solely about reducing emissions; it is also a pathway to advancing how energy is generated and utilized. Resilient systems foster modernization, expand access, and lower costs, enabling economies to evolve through electrification and digitalization. In turn, these advancements naturally support decarbonization as infrastructures become smarter, industries cleaner, and progress drives emissions reductions.
Traditional energy transition models often underestimate the speed and complexity of change. Predictions tend to assume incremental growth—a slightly larger population, modestly expanded economies, and marginal increases in energy use. However, this static approach fails to capture the dynamic shifts occurring across industries.
Data centers, artificial intelligence, and other emerging technologies are beginning to signal the scale of this transformation. These developments are advancing rapidly, defying conventional expectations. At our Sustainability Research Institute, early projections leaned heavily into electrification, yet the pace of change now surpasses those initial estimates. The future is arriving faster, marked by multifaceted challenges and opportunities.
Rising electricity demand, driven by economic growth, emerging technologies, and energy transitions, requires immediate action to address infrastructure limitations. Distributed energy solutions offer scalable options to meet this demand while fostering resilience and efficiency.
Modernizing energy systems through electrification not only supports decarbonization but also strengthens economic competitiveness and technological innovation. Businesses, industries, and governments must work together to accelerate infrastructure development and embrace smarter and more sustainable energy solutions. This transition will define the future of energy – and the perspectives for our world.
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