This is an extract from a recent report “Electricity 2025: Analysis and forecast to 2027” by IEA. In this extract, we specifically focus on The Americas.

Electricity demand in the Americas returned to growth in 2024, rising by 2.2% following a modest decline of 0.4% the previous year. The rebound in demand was led by the United States (+2%), Brazil (+6%) and Canada (+0.7%), which are the three largest electricity consumers in the region and together account for just over 85% of the market share. IEA forecasts electricity demand in the Americas region will continue growing at an average annual rate of about 2.2% in 2025-2027. Emerging industries such as electric battery and solar panel production are expected to further boost electricity demand during our forecast period. Brazil, which represents 10% of the region’s market share, will account for almost 20% of the growth by 2027, with wind and solar providing for all the additional demand, while hydropower remains the mainstay of the country’s electricity supply.

Renewable power generation grew by over 4% in 2024 across the Americas, primarily due to growth in solar PV and wind of almost 30% and 8%, respectively. Solar PV will be a key driver of increased renewable generation, and IEA forecasts an average annual growth rate of 20% during 2025-2027. Wind is also projected to play a significant role, up on average by 9% annually over the outlook period. Renewables, the primary source of electricity generation in the region, will see its share rise from 37% in 2024 to 43% by 2027. Hydropower will continue to account for about 20% of total electricity generation in the Americas over the outlook period. Coal-fired generation declined by about 3.5% in 2024 and IEA expects this contraction to continue at a similar rate during 2025-2027. Gas-fired generation rose by nearly 4.5% and is expected to record a slight decline with an average rate of about 1% in the 2025-2027 period. 

United States

Electricity demand in the United States recovered to growth of 2% after contracting in 2023 due to milder weather. A key contributor to higher demand is the expansion of data centres, which account for a growing proportion of the country’s electricity consumption. Manufacturing activity rebounded on a stronger economy in 2024, after dipping in 2023. Record-high system peaks were observed by the Texas independent system operator ERCOT and the Western Interconnection, as heatwaves significantly increased electricity usage. Weather events have caused increasing amounts of power outages and continue to impact systems, with major hurricanes Helene and Milton resulting in 4.7 million and 3.4 million customers, respectively, losing power. Data centres drive the increases in the commercial sector. New manufacturing capacity, especially from additional facilities for the development of batteries and semiconductor chips, is expected to further create additional demand growth. Continued electrification of the transportation and building sectors will further support strong growth.

Renewable power generation rose by about 8% in 2024, led by strong growth in solar and wind. Solar PV saw the largest gain, up 30% y-o-y, thanks to the expansion of utility-scale capacity from 2023. Texas and California, the two biggest markets for solar PV in the United States, particularly saw strong growth in total solar PV generation. US wind power generation was up by more than 6%. By contrast, hydropower output continued to be impacted by drought conditions in 2024, particularly in the Pacific Northwest, which hosts the majority of US hydro capacity. Hydropower generation in the United States decreased by around 1% y-o-y, reaching its lowest level in over two decades.  However, an improved outlook will be seen in the 2025-2027 period, with total renewable generation projected to grow at an average 10% annually. Gas-fired generation rose by 3.7% y-o-y in 2024, a slower rate compared to the average growth rate of 6.7% recorded during 2022-2023, despite lower prices. Coal-fired generation fell 3.7% in 2024 y-o-y and accounted for 16% of total generation in the country. Coal retirements continued into 2024, with about 3 GW of coal-fired capacity decommissioned. Coal-fired generation is expected to decline at an average annual rate of around 2% in 2025-2027. Nuclear generation increased by almost 1% y-o-y in 2024, following the first new nuclear project in the United States in over three decades commenced operations. Data centres are already the largest contributor to US electricity demand growth and a growing number of technology companies are planning to secure their electricity supplies from a dedicated source of nuclear energy. Plans to build up to 25 GW of SMR capacity associated with supplying data centres have been announced globally, almost all of them in the United States.

Canada

In 2024, Canada’s electricity demand rose by 0.7%, after declining slightly in 2023, as a hot summer was offset by a warm winter. IEA expects demand to increase at a similar rate of 1% per year through the 2025-2027 forecast period. Data centres are projected to be a significant driver of growth, with both the Energy Regulator and utilities anticipating greater demand from these facilities. Data centre development is either underway or planned, especially in Toronto and Montreal. Coal-fired power generation is estimated to have increased slightly in 2024 but is projected to decline in our forecast, with output roughly halved by 2027, in line with Canada’s commitment to phase out coal power by 2030. Gas-fired generation rose by an estimated 9% y-o-y, while nuclear generation declined by 4.4% in 2024. VRE sources continued their upward trajectory, with their share anticipated to reach 10% of total generation by 2027. In 2024, solar PV and wind recorded gains of around 45% and 18%, respectively. IEA forecasts this growth to continue over the 2025-2027 outlook period, with annual increases averaging 6% for wind and 7% for solar PV. Hydropower output – the dominant source of power generation, which accounts for around 60% of Canada’s total electricity demand – dropped by 6% in 2024 due to severe drought conditions. In 2024, drought conditions in Canada resulted in the lowest recorded year for hydropower in over two decades.

Nuclear output declined in 2024 due to maintenance at the Point Lepreau Nuclear Generating Station (660 MW) and the continued refurbishment of the Bruce Nuclear Power Station (6.2 GW), though works are ahead of schedule. The refurbishment of Darlington 1 was completed five months ahead of schedule in November 2024. Unit 4 is expected to complete refurbishment in 2026 as planned. Units 5-8 of the Pickering Station had their retirement postponed and will be refurbished instead, operating until the end of 2026 before refurbishment begins. Over the 2025-2027 forecast period, IEA expects nuclear generation in Canada to decline on average by 3% annually. The government released a new report, Powering Canada’s Future: A Clean Electricity Strategy, detailing plans to develop a power system that provides clean, affordable and abundant electricity. The strategy focuses on growing the grid, managing demand, ensuring policy certainty, and collaboration with regions to develop specialised plans. The country’s Clean Electricity Regulations were also finalised, which aim to reduce nearly 181 Mt of cumulative greenhouse gas emissions from the power generation sector between 2024 and 2050. Canada revised its target to achieve a net-zero power grid by 2050, updating the previous goal of an emission-neutral power grid by 2035.

Mexico

Mexico’s electricity demand rose 2.7% in 2024, driven higher by economic and population growth, as well as increased industrial activity. Electricity demand is expected to grow at a steady annual rate of just 3% during 2025-2027, though political and economic uncertainties may impact this outlook. Gas-fired power – the largest source of supply in the generation mix, exceeding 60% of the total – covered all of the additional demand. By contrast, hydropower generation continued to struggle as drought conditions persisted in 2024. Despite increasing by 9% y-o-y, this was the lowest level seen in over two decades, excluding 2023. This reduced the output from the country’s large hydroelectric plants. A series of rolling outages took place in May. Triggered by record-high electricity demand of nearly 50 GW – 9% higher than 2023’s peak – and generation unavailability, the outages affected over 2.6 million customers nationwide. Investigations pointed to a combination of factors, including inadequate maintenance planning, infrastructure constraints, and the inability to meet surging demand with existing capacity. These events highlighted vulnerabilities in the power system and the urgent need for investment in reliability measures.

In November 2024, the Mexican government introduced a National Energy Plan (NEP), which aims to balance the roles of the state and private sector in electricity generation. The plan stipulates that the Comisión Federal de Electricidad (CFE) will maintain a minimum 54% share in new energy assets, while private sector investment is encouraged for the remaining 46%, particularly in renewable energy projects. Public-private partnerships will play a central role, with wind and solar power development prioritised to meet growing demand. To attract private investment, the government has committed to streamlining regulatory processes and addressing bureaucratic hurdles. The plan also assures that electricity tariffs will not increase beyond inflation rates in order to maintain affordability for consumers while ensuring the financial viability of infrastructure investments. Additionally, the modernisation of transmission and distribution networks is a key focus, targeting a reduction in bottlenecks and the enhancement of grid stability. These efforts could help address longstanding challenges in Mexico’s power infrastructure, including financial constraints and regulatory hurdles that have previously hindered progress. The NEP is part of Mexico’s renewed commitment to its energy transition, with a focus on accelerating renewable energy development and modernising regulatory frameworks to support decarbonisation goals. 

Brazil

Electricity demand grew by 6% supported by robust economic growth. Higher-than-normal summer temperatures also boosted demand due to more intense use of air conditioning. Electricity demand is anticipated to grow at around 3.7% annually from 2025 to 2027. In addition, the Luz Para Todos programme, or Light for All, which aims to combat energy poverty and enhance quality of life in rural and Legal Amazon areas by providing access to clean, renewable energy for electricity generation, is projected to support increased residential electricity consumption. In 2024, the programme received the largest investment funds since its creation in 2003, and the goal for the coming years is to serve the 318 000 families that are still without electricity. On the supply side, from 2024 onwards, Brazil’s electricity market is marked by substantial growth rates in renewable energy, particularly in solar and wind, while fossil fuel sources continue their steady decline.

Renewables rose 4% in 2024 and are expected to post annual average gains of 5.1% over the outlook period. Wind power generation grew by 13% in 2024, and it is forecast to increase by an average rate of around 8% per year until 2027. Solar PV rose at the fastest rate of all sources, up 46% in 2024, and we expect an average yearly growth rate of 22% from 2025 to 2027. Despite a 2.8% decline in 2024, hydropower generation remains the largest source of power. In 2025, IEA assumes hydropower to return to 2022 levels, though a slight increase is projected for the remainder of the outlook period. These trends underscore Brazil’s accelerated shift towards renewable energy sources, whose share in the total electricity generated will be, depending on hydrological conditions, about 90% by 2027, compared to 88% in 2024 and 78% in 2017. As a result, emission intensity will fall on average by 13% annually over the 2025-2027 period. To support plans to gradually open the power market to competition, the Ministry of Mines and Energy (MME) has issued Ordinance 50/2022, which enabled high voltage consumers to access the free energy market.

Other Americas 

Chile: In 2024, electricity demand grew by around 2.5% y-o-y, in line with economic growth. Annual hydropower generation rose by 14% y-o-y, reaching its highest level since 2006, as rainfall was particularly heavy in the central and southern areas during May and June. Strong hydropower output, together with the increased contributions from wind and solar PV, led the total share of renewables in the generation mix to reach almost 70%. By 2027, wind and solar PV combined are forecast to account for more than half of Chile’s electricity generation, up from 32% in 2024, with solar PV the largest source in the electricity mix. The CO2 emission intensity of power generation is set to halve between 2024 and 2027. Solar PV and wind combined would meet all new demand, which is set to grow by 2.2% per year on average in 2025-2027. In August 2024, a strong storm caused large power outages in Chile’s central and southern regions, mainly affecting the Santiago Metropolitan Region. In early August, severe storms hit the country, with wind speeds in Santiago exceeding 120 km/h – significantly higher than the previous record of 76 km/h. The storms damaged electricity networks, leading to outages that simultaneously affected nearly a million consumers nationally and more than 600 000 in the Santiago Metropolitan Region, which houses nearly half of the country’s population. Another key development in Chile’s electricity sector in 2024 relates to regulated electricity tariffs. After having frozen electricity tariffs paid by end-users under regulated prices since late 2019, Chile began gradually normalising them in 2024, with accompanying subsidies to mitigate the impact on consumers. In April 2024, the Tariff Stabilisation Law was enacted to align tariffs with real costs, as frozen rates were about 30% below actual costs due to outdated exchange rates and unaccounted for increases in fuel prices and inflation. This measure was deemed essential, as frozen tariffs had created debt for power companies that amounted to more than USD 6 billion. 

Colombia: In 2024, electricity demand in Colombia declined by approximately 3% y-o-y. As forecasted by national authorities and weather organisations, the El Niño Southern Oscillation significantly affected rainfall and temperatures from October 2023 to April 2024, but the drought also persisted after the end of the phenomenon. This resulted in particularly low hydropower generation during this period. Hydropower, on average, provided 70% of the country’s electricity over 2017-2023, but was unable to meet its usual share in the electricity mix in 2024. Simultaneously, rising temperatures across the nation led to a significant increase in electricity demand, particularly for cooling. Low hydro output resulted in higher generation from thermal power plants throughout the year, particularly in April as generation averaged 65 GWh per day – four times the output from the same month the previous year. Meanwhile, hydropower generation plummeted by 40%, reducing its share of the electricity mix to slightly below 50%, its lowest level since March 2016. Emergency measures from the government included water rationing as well as several restrictions and halts in exports to Ecuador, which led to electricity rationing in the neighbouring country. The latest halt order started on 30 September and was expected to be valid until the end of July 2025. Colombia has launched a USD 40 billion investment plan over the decade to accelerate its energy transition. This includes expanding solar and wind capacity, converting thermal plants, promoting electric vehicles and developing energy communities.

Costa Rica: Costa Rica also faced significant challenges in the early months of 2024 due to the El Niño phenomenon, which negatively impacted reservoir levels and hydropower. Between January and May 2024, hydropower accounted for only about 50% of the electricity mix. To compensate, thermal power plants running on imported fuel oil and diesel provided crucial backup, making up 20% of the electricity mix during the first five months of the year. These plants covered less than 2% of the total generation during years 2021 and 2022 but had already surpassed 9% in 2024. Despite the government preparing an electricity rationing plan in May, it was never activated as rains quickly restored reservoir levels. The country’s electricity demand grew by 1.3% y-o-y in 2024. This increase was largely due to higher air conditioning usage in the residential and commercial sectors, along with new urban developments. Future demand could see further growth with potential expansions in the semiconductor industry. Electricity demand is forecast to rise at an average annual rate of just under 1% during the 2025-2027 forecast period. Politically, Costa Rica has seen discussions on a proposed law (Ley de Armonización del Sistema Eléctrico Nacional) to open the electricity generation market to greater competition, as privately-owned renewable capacity is currently capped at 15%. If enacted, this law could pave the way for much needed private sector participation in the energy sector. National authorities are actively encouraging private sector investment in EV charging infrastructure as Costa Rica anticipates having a fleet of more than 150 000 electric vehicles by 2030. This growing fleet is estimated to require around 290 GWh of electricity annually, accounting for approximately 2% of the country’s total yearly demand.

Access the report here