Global growth in electricity demand is expected to slow this year, with demand in the EU set for a record slump, according to the International Energy Agency (IEA).

The IEA’s latest Electricity Market Report, published on Wednesday, found that electricity demand in the US is predicted to decline by almost 2%. Demand in Japan is set to fall by 3%. In the EU, electricity demand is set to drop by 3% this year. Combined with a similar slump last year, this will amount to the bloc’s largest dip in demand on record, with electricity consumption expected to drop to levels last seen in 2002.

The global decline comes as advanced economies continue to grapple with the effects of the energy crisis and worldwide economic slowdown.

According to projections in the report, global electricity demand is set to increase by slightly less than 2% this year, down from 2.3% in 2022. However, if an improving world economic outlook can be assumed for 2024, an uptick in demand growth is expected, rebounding to 3.3%.

Electricity demand is expected to continue to rise in the coming years in line with the energy transition and electrification of core sectors, most notably in transport, as the world moves to limit the worst effects of the climate crisis. An increase in the use of indoor electrical cooling systems, predicted to climb in line with rising global temperatures, will also contribute to increased electricity consumption.

Electricity generated from fossil fuels is also expected to decline over the next two years, with renewables’ share of global electricity generation predicted to exceed one-third next year.

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China’s demand is forecast to increase at an average annual rate of 5.2% over the next two years, falling slightly below its 2015–19 average. However, average annual growth in demand from India through 2024 is estimated at 6.5%, a significant increase from its 2015–19 average.

“The world’s need for electricity is se t to grow strongly in the years to come,” Keisuke Sadamori, the IEA’s director for energy markets and security, said in a statement. “The global increase in demand through 2024 is expected to amount to about three times the current electricity consumption of Germany.

“We’re encouraged to see renewables accounting for a rising share of electricity generation, resulting in declines in the use of fossil fuels for power generation. Now is the time for policy makers and the private sector to build on this momentum to ensure emissions from the power sector go into sustained decline.”