Air con leads surge in energy use as world heats up – but most new demand is being powered by solar

Air conditioning is set to become one of the biggest drivers of rising electricity demand, as the world adapts to climate driven heatwaves and rising average temperatures. 

But much of this extra demand is already being met by a parallel surge in renewable energy generation and could set the scene for the next wave of solar investment, the International Energy Agency (IEA) said in its 2025 World Energy Outlook today.

The Outlook paints a depressing picture of the road ahead for global temperatures, with an admission that overshooting the 1.5 °C temperature target is now “inevitable.”

It means the energy needed to run constantly whirring air conditioners, one of the fastest growing uses of energy in buildings over the last decade, is now second only to that used by data centres. 

“Cooling is a rising source of electricity demand in all scenarios, led by emerging and  developing economies,” the IEA says. 

“In the [mid-range] STEPS [scenario], for example, income-driven air conditioning use adds around 330 gigawatt (GW) to global peak demand by 2035, and higher temperatures add another 170 GW.”

Last year, heatwaves meant air conditioning was partly responsible for total global energy demand rocketing up by 2 per cent, well above the long-term average growth rate  of 1.4 per cent seen in the 13 years that came before.

But it was 680 GW of new wind and solar in particular that helped renewables satisfy about two thirds of that demand, which touched 1,100 terawatt hours (TWh).

“A decade ago, renewables accounted for around one-fifth of electricity generation worldwide. That has now risen to about one-third, reflecting cost reductions in renewable energy technologies and policy support in many markets,” the IEA says. 

The need for cool buildings in summer, are also putting pressure on grids that aren’t prepared for rising peak loads as changes in the climate driving more frequent and more extreme heatwaves.

Those peak demand spikes will be even higher under the Outlook’s most pessimistic scenario, which expects less efficient air conditioning units and higher extreme temperatures amplifying those pressures.

Intriguingly however, the IEA also shows global manufacturing capacity for solar and battery storage exceeds even demand in its most optimistic scenario, suggesting there is “strong potential” to beat its models, says global think tank Ember.

“Manufacturing capacity for electrotech such as solar PV, batteries and EVs is substantially in excess of demand in both the [floor] and [mid-range] scenarios,” it says.

Meeting cooling needs with solar

The rise of air-con is coming in countries that have already taken China’s mantle of being the biggest energy user in the world, India and Indonesia. Other regions where rising incomes are helping people afford air conditioners are in the Middle East and Africa.

And these locations make for a very interesting future for solar in particular.

During the last decade, the most energy hungry countries were in regions with low or average solar irradiance.

Now, the rising demand for air conditioning is coming from countries with excellent solar resources, such as the Middle East, India and Africa. 

It could be a perfect scenario for a new wave of solar installations, the IEA suggests. 

“These conditions provide an opportunity to harness abundant solar resources that should translate into  higher average capacity factors for solar PV than currently registered, and potentially lower average generation costs,” the Outlook says. 

What comes next?

What comes next in terms of energy demand, generation mix and the scale of temperature rises depends on which of the three scenarios mapped out by the World Energy Outlook the world takes. 

After pressure from the US, the IEA resurrected a scenario it calls the Current Policies Scenario (CPS) which only looks at existing legislation and policy and assumes no change. The outcomes are worse in some cases than business-as-usual. 

The Stated Policies Scenario (STEPS) takes a wider view of policy and countries’ commitments, while the Net Zero Emissions (NZE) scenario is less ambitious than it has been in previous years. 

“The NZE Scenario is no longer a limited-overshoot scenario, as warming peaks above 1.6°C and exceeds 1.5 °C for several decades before returning below 1.5 °C by 2100. These changes in the scenario trajectory reflect the reality of persistently high emissions in  recent years and slow or uneven momentum behind the deployment of some policies and technologies,” the IEA says.

“Bringing the temperature rise back down below 1.5 °C by 2100 also  requires widespread deployment of CO2 removal technologies that are currently unproven at large scale.”

However, what is undeniable is renewable energy has momentum: even in the CPS where the technologies face strong headwinds, renewables still have the largest share of total energy demand growth as reversals in the US are outweighed by the rest of the world. 

Electrification and renewables are an “electrotech revolution” taking place in real time as the two scenarios based on current policies are already behind the technology curve, says Ember chief analyst Dave Jones. 

“The evidence on the ground is overwhelming – EV sales are taking off in many emerging countries, solar is permeating even through the Middle East,” he said in a statement. 

“Technology is pushing new boundaries; for example, grid batteries now mean solar is increasingly dispatchable.”

Even under the pessimistic CPS scenario, renewables are driving growth with solar PV in the lead. 

In the mid-range scenario STEPS, solar and wind rise from 15 per cent of global electricity supply last year to 39 per cent in 2035, while fossil fuel use barely shifts. 

Jones says fossil fuel importing countries are still reeling from the energy crisis of 2022. 

“Leaders have a clear choice: the faster pathways offer a cheaper, more efficient and more secure energy system, while the slower pathways raise global temperatures and bloat energy demand with inefficient burning of fossil fuels,” he says.

“The world is moving in the right direction, and continued acceleration can drive a more rapid transformation of the energy system. Renewables and electrification will dominate the future – and fossil-importing nations will gain the most by embracing them.”

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