The 4% Annual Rise in Electricity Demand: Implications for Modern Businesses
Published June 3, 2026
The Earth is not getting any larger, but our demands for its resources are only continuing to grow. Reports reveal, the total number of people currently residing on Earth is approximately 8.2 billion. All of whom have their needs met via electricity. The growing population is affecting Australia’s electricity needs, as well. Given that several of our largest coal-burning power stations have been expected to shut down by around 2028, there is potential for temporary shortages during this transition towards renewable energy production.
In this post, we’ll be taking a closer look at how electricity demands might change in the future, the price of such changes and how businesses could prepare for those adjustments.
Growing Global Electricity Needs
Let’s begin with looking at the global scale. As stated by the International Energy Agency, global electricity demand is estimated to grow annually by 4%. That’s approximately as much electricity consumption as produced by Japan – the 4th largest economy in the world.
Much of the growth is expected to occur through the growth of emerging economies in developing countries, but the ever-increasing demands of the transport industry and the construction of so many data centers powered by electricity will play an equally important role.
What Does That Mean For Australia?
So what does all of this mean for us? We’re part of the global environment, and when demands grow elsewhere, this means there is more competition for fuel and energy infrastructures.
One of the outcomes that may result from this will definitely be increasing costs associated with electricity production technologies. The leaders of Australia hope to counteract this problem through the swift implementation of renewable energy technologies, which we expect to be using exclusively by 2050.
However, before that happens, we need to make some investments into energy infrastructure. In such times of growing competition, this can lead to increased costs for a while.
Importance of 2028 in the Energy Market
If one were to take a look into the future about how things could pan out in the energy markets, 2028 stands out to be a crucial year in the context of energy transition. This is because of two major reasons,
2028 will mark the closure of a number of coal-fired power plants in Australia.
The biggest plant amongst them is the Eraring power plant which is scheduled to close off in the preceding year of 2027. The Eraring plant provides about 2,880 MW per annum and accounts for 25% of NSW’s total power supply grid.
2028 will also witness the closure of the Yallourn power plant. The Yallourn power plant produces about 1,480 MW per annum accounting for about 20% of Victoria’s total energy supply.
Although there are plans to ensure that renewable energy makes up for a significant percentage of the energy supply in 2028, things don’t seem to be on track at the current juncture.
The problem with closing coal plants is that their generated electricity cannot instantly be replaced. This may take time, and given the ongoing struggle to ramp up renewable capacity to meet demand, this delay could create significant strain on the electricity grid.
Moreover, running old coal plants comes at a considerable expense. In a recent analysis, it was shown that extending the lifespan of the Eraring plant beyond its 2025 expiry date would cost billions but continue to increase residential and industrial customers’ electricity bills because of high maintenance expenses.
So, while it’s certainly not an easy choice, 2028 will prove to be a challenging year for Australia’s transition away from coal plants, one that will likely affect commercial energy rates.
How Utility Market Can Help
As the country moves further away from using coal as an energy source while still experiencing rising demands for energy, it is expected that energy prices will continue to be unstable in the coming years.
The best way to protect your business against such instability is to be proactive in your measures, such as assessing your company’s energy consumption and implementing strategies to improve energy efficiency through the evaluation of business electricity tariffs.
We may not be able to solve the entire problem of transitioning to renewable energy ourselves, but rest assured that here at Utility Market, we can definitely assist you in getting a better deal. This is because the professionals at Utility Market not only have expertise in renewable energy, but they also know how to cut back on the cost hidden within the business’s energy bill.
Frequently Asked Questions About Australia’s Electricity Demand Growth
Population growth, electrification of transport, and expansion of data centres are driving higher demand.
Prices may become more volatile due to coal plant closures and ongoing renewable infrastructure transition.
Major closures include Eraring in NSW and Yallourn in Victoria, reducing large-scale baseload supply.
By improving energy efficiency, comparing tariffs, and optimizing usage during peak demand periods.
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