Wood Mackenzie: US and Asia Pacific lead global power market demand growth
Global power markets are entering a period of unprecedented transformation in 2025, marked by divergent regional trajectories that reflect varying policy environments, economic conditions and technological adoption rates, according to Wood Mackenzie.
While Asia Pacific leads a massive investment surge driven by an energy storage revolution and renewable deployment, the US grapples with robust demand growth amid rising policy uncertainty, and Europe works to implement its bold and sustained decarbonisation commitments, Wood Mackenzie said.
The global energy transition is progressing unevenly, with investment patterns shifting dramatically as storage technologies mature and become mainstream across key markets. Traditional fossil fuel investments are being displaced at different rates regionally, while new demand drivers – from data centres to hydrogen production – reshape load profiles and infrastructure requirements.
This complex landscape presents both opportunities and risks for power market participants as they navigate evolving regulatory frameworks, supply chain constraints and changing competitive dynamics, according to Wood Mackenzie's latest Global Outlook.
Energy storage revolution in Asia Pacific
Asia Pacific's power markets are experiencing an unprecedented investment boom, with generation investments projected at US $3.9 trillion over the next decade – more than 44% higher than the previous 10 years. Solar energy dominates this investment wave, capturing a third of total capital, while energy storage emerges as a mainstream technology accounting for 14% of investments through 2034, surpassing both coal and gas.
This transformation reflects the region's continued role as the global demand growth engine, having driven 82% of worldwide power demand increases between 2015 and 2024 with annual growth rates of 5% - which is five times higher than the rest of the world, Wood Mackenzie said. Power demand in Asia Pacific is forecast to maintain 5% annual growth to 2030, it said.
Stronger demand growth in North America
American and Canadian power markets are experiencing robust demand growth driven by large industrial loads and manufacturing expansion, with US and Canada demand projected to grow at 2% annually through 2050 – up from the previous 1.6% forecast, Wood Mackenzie said.
Growth accelerates despite delays in electric vehicle deployment, with charging demand 20% lower through 2030. Large customers remain willing to pay premiums to secure reliable supply, fueling this accelerated growth despite policy headwinds. However, policy uncertainty from potential trade actions and regulatory changes introduce new costs and development risks, with proposed tariffs potentially raising generation costs across all technologies, it said.
Navigating the energy transition in Europe
European power markets face a more challenging outlook in the second half of 2025, as global trade tensions dampen economic growth and investor confidence. While political commitment to decarbonisation remains strong, policymakers confront mounting complexities in delivering the energy transition, Wood Mackenzie said.
Power prices are expected to follow gas costs downward toward 2030, supported by increasing renewable supply, though long-term price stability will depend on enhanced flexibility solutions and higher carbon pricing as thermal generation becomes increasingly sidelined, it said.
