Electricity demand will rise much faster than overall energy growth in the coming decades, underscoring the need for diversified energy sources, according to an analysis released Wednesday.

The report by the International Energy Agency ����������renewable energy, led by solar power, will grow faster than any other major source in the next few years. One scenario the agency anticipates is coal and oil demand peaking globally by the end of this decade — but the group also said global oil and gas demand could continue growing until 2050. The report noted that many natural gas projects were approved in 2025, due to changes in U.S. policy, indicating worldwide supply will rise even as questions remain about how it will be used. Meanwhile, global nuclear power capacity is set to increase by at least a third by 2035 after being stagnant for years.

The release of the annual World Energy Outlook coincided with U.N. negotiations in Brazil, where global leaders this week are calling for ways to curb climate change.

The IEA says building greater resilience in energy systems is especially important as data centers, heating and cooling, electrification and more drive energy demand. Investment in data centers is expected to reach $580 billion this year, exceeding investment in the oil supply, according to the report.

Growing economies including India and nations in Southeast Asia, the Middle East, Africa and Latin America, will “increasingly shape energy market dynamics in the years,” the IEA said, noting their potential for solar power.

China, meanwhile, has accounted for half the global growth in demand for oil and gas, and more than half for electricity, since 2010.

“In a break from the trend of the past decade, the increase in electricity consumption is no longer limited to emerging and developing economies,” IEA Executive Director Fatih Birol stated in a release. Electricity use is also rising in advanced economies, according to Birol.

Nations are grappling with meeting demand while preparing for the risks brought on by climate change. The IEA says the world is falling short on universal energy access and climate change goals. Around 730 million people still live without electricity, according to the IEA, and despite progress, nearly one-quarter of the global population still relies on inefficient cooking methods that hurt their health or the environment. 2024 was also the hottest year on record.

Nations should diversify their energy sources and cooperate to expand supply chains for critical minerals used to make things like batteries for electric vehicles and components for solar and wind power generation, the IEA said. This also includes making quick improvements to the grid, energy storage and broader infrastructure.

“When we look at the history of the energy world in recent decades, there is no other time when energy security tensions have applied to so many fuels and technologies at once,” Birol said. “With energy security front and (center) for many governments, their responses need to consider the synergies and trade-offs that can arise with other policy goals — on affordability, access, competitiveness and climate change.”

The IEA brought back an approach to this year’s outlook using what it calls current policies. It used this approach in 2019 to weigh different possible global energy outcomes, before better aligning with clean energy transition plans. This year the agency’s outlook includes the possibility of essentially regressing on the phase-out of fossil fuels.

In a conference call Wednesday, Birol said: “We will still use oil. We will still use gas. But the growth of electricity demand is spectacular.”

He noted the role transportation plays in accounting for 45 percent of global oil consumption, for example. “How the electrification of the transportation takes place, especially in countries beyond China and Europe, will determine the shape of the oil demand and growth.”

Wednesday’s edition of the yearly report is the first released since the start of U.S. President Donald Trump’s second term. Trump’s administration has for a second time opted out of the Paris agreement, rolled back dozens of climate regulations, slashed federal support for renewable energies such as wind and solar power and is reversing the “endangerment finding” that sits at the core of U.S. climate policy.

Trump has pledged his support instead to the fossil fuel industry, investing in coal and loosening restrictions on pollution.

But energy analysts said the shift to clean power is happening regardless of climate policy around the world.

“The evidence on the ground is overwhelming,” said Dave Jones, chief analyst at global energy think tank Ember. “EV sales are taking off in many emerging countries, solar is permeating even through the Middle East. Renewables and electrification will dominate the future.”

Maria Pastukhova, energy transition program lead at climate change think tank E3G, said the report makes “the choices for the global energy system and the global economy unambiguous.”

Others, however, were critical of how the outlook addressed oil and gas. Ben Backwell, CEO of the Global Wind Energy Council, said the outlook does not fully capture the momentum in renewables, and that it should have emphasized the trajectory for renewable energy is accelerating, driven by the decreasing cost of the technologies, strong policy support and the move toward electrification.

“We’re accelerating,” he added. “You can see it all around the world and we can see it in our numbers for last year, but also in our numbers for the first half of this year. It looks very, very exciting, both for wind and for solar, in fact, and for next year, even more so.”

The IEA addressed some of the criticism in the call Wednesday. It said that it sees differences economically, politically and regarding clean energy efforts across the globe, and that its analysis tries to account for those differences.

“In a nutshell, the IEA is backsliding,” said Stephan Singer, global energy senior adviser at CAN International, a global network of environmental organizations. “As a global think tank, the IEA has largely failed to represent where most countries in the (Organisation for Economic Co-operation and Development) and the developing world are, as they’re supporting net zero emissions with 98 percent CO2 emissions reductions by mid-century.”

Editor’s note: Associated Press reporters Jennifer McDermott in Providence, Rhode Island, and Sibi Arasu in Bengaluru contributed to this report.

The post IEA: Electricity demand surging faster than energy production appeared first on Daily Journal of Commerce.

HARRISBURG, Pa. — Coal-fired power plants, long an increasingly money-losing proposition in the U.S., are becoming more valuable now that the suddenly strong demand for electricity to run Big Tech’s cloud computing and artificial intelligence applications has set off a full-on sprint to find new energy sources.

President Donald Trump — who has pushed for U.S. “energy dominance” in the global market and suggested that coal can help meet surging power demand — is wielding his emergency authority to entice utilities to keep older coal-fired plants online and producing electricity.

While some utilities were already delaying the retirement of coal-fired plants, the scores of such plants that have been shut down in the past couple years — or will be shut down in the next couple years — are the object of growing interest from tech companies, venture capitalists, states and others competing for electricity.

That’s because they have a very attractive component: high-voltage lines connecting to the electricity grid that they aren’t using anymore and that a new power plant could use.

That ready-to-go connection could enable a new generation of power plants — gas, nuclear, wind, solar or even battery storage — to help meet the demand for new power sources more quickly.

For years, the bureaucratic nightmare around building new high-voltage power lines has ensnared efforts to get permits for such interconnections for new power plants, said John Jacobs, an energy policy analyst for the Washington, D.C.-based Bipartisan Policy Center.

“They are very interested in the potential here,” he said. “Everyone sort of sees the writing on the wall for the need for transmission infrastructure, the need for clean, firm power, the difficulty with siting projects, and the value of reusing brownfield sites.”

Rising power demand, dying coal plants

Coincidentally, the pace of retirements of the nation’s aging coal-fired plants had been projected to accelerate at a time when electricity demand is rising for the first time in decades.

The Department of Energy, in a December report, said its strategy for meeting that demand includes reusing coal plants, which have been unable to compete with a flood of cheap natural gas while being burdened with tougher pollution regulations aimed at its comparatively heavy emissions of greenhouse gases.

There are federal incentives as well — tax credits and loan guarantees, for instance — that encourage the redevelopment of retired coal-fired plants into new energy sources.

Todd Snitchler, president and CEO of the Electric Power Supply Association, which represents independent power plant owners, said he expects Trump’s executive orders will mean some coal-fired plants run longer than they would have — but that they are still destined for retirement.

Time is of the essence in getting power plants online.

Data center developers are reporting a yearlong wait in some areas to connect to the regional electricity grid. Rights-of-way approvals to build power lines can also be difficult to secure, given objections by neighbors who may not want to live near them.

Stephen DeFrank, chairman of the Pennsylvania Public Utility Commission, said he believes rising energy demand has made retiring coal-fired plants far more valuable.

That’s especially true now that the operator of the congested mid-Atlantic power grid has re-configured its plans to favor sites like retired coal-fired plants as a shortcut to meet demand, DeFrank said.

“That’s going to make these properties more valuable because now, as long as I’m shovel ready, these power plants have that connection already established, I can go in and convert it to whatever,” he said.

Gas, solar and more at coal power sites

In Pennsylvania, most conversions are likely to be natural gas because Pennsylvania sits atop the prolific Marcellus Shale reservoir, DeFrank said.

In Homer City, a coal-fired plant that had operated for 54 years recently saw its smokestacks and cooling towers demolished. The owners are planning to build a $10 billion natural gas production facility to power data centers on campus. It would be the nation’s third-largest power generator.

In states across the South, utilities are replacing retiring or retired coal units with gas. That includes a plant owned by the Tennessee Valley Authority; a Duke Energy project in North Carolina; and a Georgia Power plant.

The high-voltage lines at retired coal plants on the Atlantic Coast in New Jersey and Massachusetts were used to connect offshore wind turbines to electricity grids.

In Alabama, the site of a coal-fired plant shuttered in 2019, Plant Gorgas, will become home to Alabama Power’s first utility-scale battery energy storage plant.

Texas-based Vistra, meanwhile, is in the process of installing solar panels and energy storage plants at a fleet of retired and still-operating coal-fired plants it owns in Illinois, thanks in part to state subsidies approved there in 2021.

Don’t forget about the potential of nuclear

Nuclear is also getting a hard look.

In Arizona, lawmakers are advancing legislation to make it easier for three utilities there — Arizona Public Service, Salt River Project and Tucson Electric Power — to put advanced nuclear reactors on the sites of retiring coal-fired plants.

At the behest of Indiana’s governor, Purdue University studied how the state could attract a new nuclear power industry. In its November report, it estimated that reusing a coal-fired plant site for a new nuclear power plant could reduce project costs by between 7 percent and 26 percent.

The Bipartisan Policy Center, in a 2023 study before electricity demand began spiking, estimated that nuclear plants could cut costs from 15 percent to 35 percent by building at a retiring coal plant site, compared to building at a new site.

Even building next to the coal plant could cut costs by 10 percent by utilizing transmission assets, roads and buildings while avoiding some permitting hurdles, the center said.

That interconnection was a major driver for Terrapower when it chose to start construction in Wyoming on a next-generation nuclear power plant next to PacifiCorp’s coal-fired Naughton Power Plant.

The post Coal plant sites offer potential for AI, data growth in energy pivot appeared first on Daily Journal of Commerce.