Surging Power Demand Shifts Political Focus from Oil to Electricity

Key points

• Global electricity demand grew at twice the pace of total energy demand in 2025, with EVs and data centers as major drivers.
• U.S. governors like Josh Shapiro and Greg Abbott are imposing restrictions on data centers due to voter anger over rising power bills.
• UK Prime Minister Andy Burnham eliminated a tax on electricity, while France's Marine Le Pen seeks to slash power levies and exit Europe's electricity market.
• IEA Executive Director Fatih Birol predicts electricity prices will become the key metric for energy affordability, replacing oil prices.
• European countries are struggling with high electricity prices linked to natural gas costs, with populists using this issue to gain political support.

Background

This shift in political focus follows earlier concerns about energy affordability, such as New Hampshire's rate increases in 2026 and Hungary's power shortfall in 2026. The growing importance of electricity prices reflects a broader trend of electrification, as noted by IEA Executive Director Fatih Birol, who described the coming decades as the 'Age of Electricity.'

Why it matters

The rising cost of electricity is becoming a critical political issue, influencing elections and policy decisions across the U.S. and Europe. This shift reflects a broader trend of electrification and the growing impact of AI data centers on energy demand, which could reshape global energy markets and political priorities in the coming decades.

What to watch

U.S. and European leaders are expected to continue addressing electricity prices through policy changes, including tax cuts and restrictions on data centers. The IEA's prediction that electricity prices will become the key metric for energy affordability suggests that this issue will remain central to political discourse in the coming years.