The Global Surge in Electricity Demand: Why HVAC Must Lead the Energy Efficiency Revolution

📍 By Thomas Gal – CEO of Technic Electrical Engineering (Thailand) Co., Ltd.

VP Engineering & Global Distribution – CONTINEWM®

The International Energy Agency (IEA) ’s Electricity Mid-Year Update 2025 (https://www.iea.org/reports/electricity-mid-year-update-2025) delivers a powerful message: HVAC is no longer background infrastructure — it’s a frontline player in global energy dynamics. We are entering a new “Age of Electricity,” where power demand is surging at its fastest pace in decades. 

Despite economic slowdowns, electricity demand is surging. What’s driving it? Not just AI, not just EVs. It’s your air conditioner. Your heat pump. The exponential growth of thermal comfort and digital cooling — from Bangkok to Berlin, from Texas to Tokyo — is reshaping grid load, investment priorities, and energy security. Driven by rapid electrification of transport, industry, and critically — buildings and air conditioning — global consumption will grow by an unprecedented 3,500 TWh between now and 2027. That’s like adding the entire electricity consumption of Japan to the global grid — every year.

But here’s the nuance few are talking about: HVAC isn’t just along for the ride — it’s driving the bus.

Let’s unpack what this means for the future of HVAC… and why passive efficiency technologies like CONTINEWM® must take center stage.

HVAC Loads Are Now Grid-Critical Infrastructure

From China’s 100 GW spike in cooling load last summer, to the soaring deployment of heat pumps across Europe and the U.S., HVAC systems are rapidly becoming grid-critical infrastructure.

From the IEA’s data, three clear trends emerge:

1. Global electricity demand is outpacing total energy demand, driven largely by air conditioning, electrification of heating, and data centers.
2. Heatwaves are multiplying — pushing cooling to the top of the load curve. In India, the government now mandates AC temperature settings (20–28°C) to avoid 60 GW peak load jumps.
3. Even in mature economies, HVAC electrification is accelerating. In the U.S., air-source heat pump sales rose 14% in 2024 and 9.5% in early 2025. Data centers — HVAC-intensive by design — consumed 180 TWh in 2024 and are expected to add another 240 TWh by 2030.

Cooling is no longer just a comfort — it’s a grid challenge.

Take Europe and the United States, where the push for building decarbonization is triggering a surge in heat pump adoption:

• In the EU, heat pump sales have more than doubled since 2019, with over 20 million units now in operation
• In colder regions like Scandinavia, heat pumps already heat over 60% of households
• In the U.S., heat pumps outpaced gas furnaces in new sales for the second year in a row

 Meanwhile, in India and Southeast Asia, the story is all about cooling:

• India’s residential AC penetration, while still under 10%, is rising at 15–20% annually — creating massive peak load pressure
• In Thailand, Indonesia, and Vietnam, urban cooling demand is expected to triple by 2030
• Across the region, air conditioning is projected to be the single largest driver of electricity growth

In China alone:

• Air conditioning already accounts for 30–40% of peak summer load
• 80% of households have AC, growing at +6% annually
• Data centers and 5G networks — heavily reliant on cooling — are doubling power use
• EV charging, another HVAC-intensive environment, will consume over 100 TWh this year

And everywhere — from hyperscale data centers in Texas, to resorts in Koh Samui, to EV charging hubs in Bangkok — cooling loads are surging, and HVAC is at the center of the energy discussion.

A Perfect Storm: Price Volatility + Load Growth + Renewable Intermittency

As cooling demand explodes, so does price volatility. As renewables expand (meeting 95% of demand growth globally), system stability becomes harder. We’re now seeing:

• Negative wholesale electricity prices in California, Europe, Australia
• Price spikes during “Dunkelflaute” events (no wind/sun)
• Germany faced up to 9% of hours with negative pricing — driven by solar oversupply + inflexible demand.
• Weather disruptions increasing strain on HVAC loads
• Wholesale electricity prices in the EU rose by 30–40% in H1 2025.
• India and Australia saw declining prices thanks to renewable additions — but their grids remain vulnerable to unseasonal spikes.

The conclusion? The HVAC sector must evolve from a passive load to a flexible, optimized asset. The IEA calls for urgent investment in demand flexibility. But most buildings still run inflexible HVAC systems, unable to modulate intelligently or absorb price volatility.

And not just through big-ticket CAPEX like new chillers or complex BMS systems.

This is where passive solutions like CONTINEWM® become transformative: boosting efficiency, reducing peak demand, and enabling HVAC to support the grid — without expensive retrofits.

What It Means for Us at TEET and CONTINEWM®

As the global distributor of CONTINEWM® and partner in energy transition with Schneider EcoStruxure and others, the IEA report confirms our frontline role in:

• Decarbonizing existing HVAC systems — quickly, affordably, and at scale
• Supporting data centers, cold chains, and hotels in lowering OPEX and peak loads
• Enabling climate-resilient, electrified growth in Southeast Asia, India, and the U.S.
• Empowering HVAC to shift from being a problem… to being a solution.

🌿 CONTINEWM®: A Passive, Scalable HVAC Efficiency Solution

As founder of TEET, VP Engineering & Head of global distribution at CONTINEWM®, I’ve seen firsthand how our technology helps clients reduce HVAC energy use by 20–30% — with:

• Zero disruption
• No moving parts, No Electronics, No Maintenance
• Quick ROI (typically 12–36 months)

In a world where data centers, EV infrastructure, and smart buildings are overwhelming traditional cooling infrastructure, passive retrofits like CONTINEWM® can provide the agility, affordability, and carbon impact that policymakers and operators alike are desperate for.

And unlike solar or storage, CONTINEWM® delivers load-side decarbonization — exactly what the IEA highlights as urgent for the years ahead.

What the IEA Report Means for Policymakers, Operators, and Investors

Here’s my take on how to act on the IEA’s findings: 

• For hotel owners, facility managers, data center operators: Retrofit your HVAC now. Focus on plug-and-play efficiency that cuts your bills, protects against price shocks, and prepares for ESG audits.
• For utilities and regulators: Incentivize demand-side technologies that support grid flexibility. CONTINEWM® helps smooth peak loads — exactly what your networks need.
• For green investors: Don’t overlook the HVAC retrofit space. It’s low-risk & high-impact

One Final Thought

 The IEA’s report doesn’t just offer a forecast — it offers a challenge: to rethink how we cool, how we consume, and how we decarbonize.

Too often, discussions around the energy transition focus on generation and storage. But if HVAC systems account for over 40% of a building’s energy use globally, and electricity is becoming the dominant global energy vector, then it’s time we spotlighted HVAC as a strategic lever — not a background cost.

Solutions like CONTINEWM® may be small in size, but in this new Age of Electricity, their impact can be immense.

Let’s make it part of the solution together with CONTINEWM® ASIA , CONTINEWM® EUROPE , CONTINEWM® USA , National Enviro Tech Solutions (N.E.T.S) , Bizsu , Meshik

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