India saw second largest increase in energy demand last year, IEA says

Last year, India saw the second largest increase in energy demand in absolute terms—more than the increase in all advanced economies combined, the International Energy Agency (IEA) said in a report released this week.

Emerging and developing economies accounted for more than 80% of growth in global energy demand, with China seeing the largest increase in energy demand in absolute terms, the IEA’s latest Global Energy Review said.

However, the rate of growth in energy demand in emerging market and developing economies slowed last year, falling to below 3%, down from nearly 4% in 2023.

This was led by the slowdown in demand growth in China, which halved from 2023—in part reflecting the last effects of the country’s post-Covid reopening in early 2023.

Growth also slowed in India, falling to below 5%.

Power generation was the main driver of growth as high temperatures pushed up electricity consumption for cooling.

Rising temperatures boost electricity demand

Record global temperatures boosted demand for cooling in many countries in 2024—the warmest year recorded, the IEA said, adding that demand growth was driven by higher industrial use, and by increased gas use in power generation (in part due to the impact of extreme weather).

Intense heatwaves drove coal use higher in both China and India, which together represented the large majority of the global demand increase of around 65 million tons of coal equivalent.

Global cooling degree days (a measure of cooling needs) were 6% higher in 2024 than in 2023, and 20% higher than the long-term average between 2000 and 2020.

Regions with high cooling demand were particularly affected, including China, India and the US. IEA said.

Among fossil fuels, natural gas grew the fastest, with demand rising by 2.7% to hit an all-time high in 2024. Higher demand was focused in fast growing Asian markets, with growth of over 7% in China, and over 10% in the smaller Indian market.

The IEA report said global energy demand rose by 2.2% last year—lower than the gross domestic product (GDP) growth of 3.2% but considerably faster than the average annual demand increase of 1.3% between 2013 and 2023.

“There are many uncertainties in the world today and different narratives about energy – but this new data-driven IEA report puts some clear facts on the table about what is happening globally,” IEA executive director Fatih Birol said.

“What is certain is that electricity use is skyrocketing, pulling overall energy demand along with it to such an extent that it is enough to reverse years of declining energy consumption in advanced economies,” Birol said.

“The result is that demand for all major fuels and energy technologies will increase in 2024, with renewables covering the largest growth share, followed by natural gas. And the strong expansion of solar, wind, nuclear power, and EVs is increasingly loosening the links between economic growth and emissions,” he added.

India largest single oil demand source

On crude oil, the report said fuel demand is growing in other emerging market and developing economies in Asia, with India being the largest single global oil demand growth source in 2024 at 3.4%, while demand in Southeast Asia also rose significantly at 2.6%.

India’s economy “has underpinned the advances of recent years,” with urbanization and rising car ownership lifting oil demand 11.6% higher in 2024 than 2019. Gasoline use in the world’s most populous nation increased by 41.7% (or 310,000 barrels per day) from 2019 to 2024, the report said.

“From slowing global oil demand growth and rising deployment of electric cars to the rapidly expanding role of electricity and the increasing decoupling of emissions from economic growth, many of the key trends the IEA has identified ahead of the curve are showing up clearly in the data for 2024,” Birol said in the report.