The International Energy Agency is calling for faster investment and modernisation of electricity grids as rising electricity demand places increasing pressure on existing infrastructure.
In its latest analysis, the IEA says electricity demand has grown at roughly twice the rate of overall energy demand over the past decade, driven by electrification, cooling, industrial expansion and, in some markets, data centres.
The agency estimates that global grid capacity will need to increase by at least 30% by 2035 to meet expected electricity demand. This would require adding or replacing approximately 25 million kilometres of power lines.
Modernising transmission and distribution networks is becoming increasingly important as electricity demand accelerates.
Emerging markets and developing economies are expected to account for around three-quarters of the required increase in grid capacity.
The IEA also highlights the potential of digitalisation and artificial intelligence to make better use of existing networks. Technologies including dynamic line ratings, topology optimisation and advanced power-flow control could enable additional generation, storage and electricity demand to connect to existing grids without waiting for extensive network reinforcement.
The agency estimates that these technologies could potentially enable up to 330 GW of additional generation, storage and demand to connect to existing networks.
The report underscores a growing connection between digital technology and power infrastructure. As AI and data-centre investment accelerate electricity demand, modernising the grid will become increasingly important to energy security, industrial development and economic growth.
Source: International Energy Agency, Modernising Grids in the Age of Electricity, 2026. IEA report