By 2025, the global energy conversation is shifting decisively toward electricity. From where demand is coming, how costs are evolving, to the strain on national grids, nearly every major energy issue now intersects with one undeniable force: artificial intelligence. Last week, the International Energy Agency (IEA) released its latest World Energy Outlook, a comprehensive annual assessment that outlines the trajectory of the global energy system. The report highlights key trends over the next decade, particularly around electricity, grid infrastructure, and climate change—painting a picture of an emerging “electric age” unlike any before. Three developments stand out. First, global electricity demand is set to surge by 40% over the next decade. While population growth and economic expansion continue to drive overall energy demand, electricity is the fastest-growing segment. Over the past decade, China led global electricity demand growth, and it will remain a key player. But a significant shift is underway: non-Chinese emerging economies are now contributing an increasing share of the rise. In contrast, electricity use in the U.S. and Europe has largely stagnated in recent years—until now. The rapid expansion of AI, cloud computing, and data centers is set to reverse that trend, with demand in these regions on a steep upward path. One often overlooked but powerful driver is air conditioning. As incomes rise, more households are adopting air conditioners. The IEA projects that by 2035, rising incomes alone will increase global peak electricity demand by 330 gigawatts. Climate change will add another 170 gigawatts—equivalent to a 10%+ increase in peak load compared to 2024. Second, AI’s energy consumption is highly uneven, but its impact is most acute in the United States. Global data center investment is expected to exceed $580 billion in 2025—surpassing the $540 billion projected for global oil and gas supply investment. This has made AI’s power use a major public policy issue. However, the IEA’s analysis shows that, globally, data centers will account for less than 10% of electricity demand growth by 2035—well below the contributions from industrial processes and household appliances, especially air conditioners. Even electric vehicle adoption will place greater strain on the grid in aggregate. The real pressure point lies in the U.S., where half of all new electricity demand before 2030 is expected to come from data centers. The concentration of these facilities in specific urban and regional grids means that some parts of the U.S. power system could face unprecedented strain within just a few years. A significant portion of planned data center capacity is already located near major cities, compounding the challenge of grid modernization and expansion. Third, the intersection of fossil fuels and clean energy is reaching a critical turning point. The ultimate test of the energy transition is not just demand, but the source of the new power. While fossil fuels still dominate global electricity generation, the shift toward clean energy is accelerating. In the first half of 2024, solar and wind power output surpassed coal for the first time, becoming the world’s largest source of electricity. Global coal consumption is expected to peak this decade and decline thereafter. Nuclear energy is experiencing a revival after two decades of stagnation, with global nuclear capacity projected to grow by one-third over the next ten years. Meanwhile, 80% of new electricity demand will come from regions with high solar irradiance, fueling rapid solar deployment in developing countries. Despite these positive trends, the IEA remains clear-eyed: global emissions reductions are still too slow to avoid severe climate impacts. In 2025, global carbon emissions are expected to hit another record high. To prevent the worst outcomes, the world must accelerate the transformation of its entire energy system—especially its electricity infrastructure. From data centers to air conditioning, from industrial decarbonization to grid upgrades, we are entering an era where the future of energy hinges on how we generate, distribute, and manage electricity.