A new report from the Asia-Pacific Economic Cooperation (APEC) projects a dramatic surge in electricity consumption across the region over the coming decades, driven by sweeping technological and industrial changes.
Electrification and AI Fuel Unprecedented Demand
According to the ninth edition of the APEC Energy Demand and Supply Outlook, electricity demand in Asia-Pacific economies could skyrocket by as much as 96 percent by the year 2060. This staggering increase is primarily fueled by the widespread electrification of transport, the explosive growth of data centers, and shifts in how energy is used in buildings and industry.
The outlook, released by the Asia-Pacific Energy Research Centre (APERC), forecasts that under current policies, electricity generation will climb to 32,690 terawatt-hours (TWh) by 2060, up from 18,971 TWh recorded in 2022. This represents a fundamental shift away from the direct burning of fossil fuels toward using electricity as the primary energy carrier.
Key Drivers: From EVs to Data Farms
Transportation electrification stands out as a major force behind this projected demand. The report estimates that by 2060, electric vehicles (EVs) will make up roughly 60 percent of the total vehicle fleet if current policies hold. This figure could jump to an impressive 96 percent if member economies successfully meet their stated climate and energy targets. While this shift will drastically cut oil consumption, it will place a massive new load on power grids.
In the buildings sector, power hunger continues to grow relentlessly. The rapid expansion of data centers and artificial intelligence (AI) workloads is a primary culprit, pushing consumption higher even as improvements in energy efficiency slow growth in other areas.
A Multi-Trillion Dollar Transition to Green Power
On the supply side, the energy mix is poised for a significant transformation. Renewable energy sources are projected to supply 55 percent of electricity generation by 2060 under current policies, a substantial increase from 26 percent in 2022. If economies achieve their targets, this share could reach 64 percent.
Consequently, coal's role is expected to diminish sharply, with supply forecast to fall by 56 percent under current policies and 74 percent if targets are met. Natural gas, however, is seen rising by 58 percent, highlighting its ongoing role as a transitional fuel.
This historic shift will require colossal investment. APERC estimates that cumulative spending in the power and hydrogen sectors from 2025 to 2060 will reach $57 trillion under current policies. Pursuing full emissions-reduction targets would raise that figure to a staggering $91 trillion. While reduced fossil fuel use could save about $5.4 trillion, these savings would be far outweighed by the costs of building new renewable generation, grids, storage, hydrogen infrastructure, and backup capacity.
Regional Cooperation is Critical
APERC Chairman and President Kazutomo Irie stated that the outlook aims to help member economies navigate the evolving energy landscape by pinpointing key challenges and opportunities. Eduardo Pedrosa emphasized the need for collaboration, noting that "no economy can secure reliable, affordable and sustainable energy alone."
The report warns that with electricity demand growing faster than overall energy use, economies face narrowing windows of opportunity. They must act swiftly to expand and modernize grids, deploy low-carbon technologies, and manage the complex transition in a way that avoids increasing price volatility or compromising supply security for millions across the Asia-Pacific region.
