In Australia, heating and cooling on average account for approximately 40 per cent of household energy bills.

But with temperatures warming globally, the International Energy Agency (IEA) has predicted a massive increase in the use of air conditioning which will in turn have one of the biggest impacts on the world’s electricity grids over the coming decade.

The IEA noted that a combination of rising incomes in the developing world and higher temperatures from climate change meant that power used for home air conditioning units would rise by an amount greater than the entire Middle East’s electricity use today, reported the Financial Times.

The agency’s flagship World Energy Outlook report released this week found that electricity usage in 2035 would be 6 per cent higher than anticipated last year. The report said air conditioning would need an extra 697 terawatt hours of electricity by 2030, more than three times the extra demand from computer data centres.

 

“It is a blind spot for many decision makers to see how important air conditioners are as a driver of global electricity consumption,” Fatih Birol, the head of the IEA, told the FT.

“Just to put it in context, in the US and Japan, 90 per cent of households have air conditioning but it is 5 per cent of households in Nigeria, 15 per cent in Indonesia and less than 20 per cent in India. With increasing income levels, and with the increasing impact of climate change, people buy air conditioners and this is a major driver,” he added.

It is estimated that more than 75 per cent of all Aussie households have at least one form of air conditioning at home. However, the figure varies around Australia, with only 48 per cent of Tasmanians having an a/c unit, while South Australians are the most reliant on air conditioning, with an estimated 80 per cent of homes in the state reportedly having an air conditioning system.

The IEA said energy use for residential air conditioning was expected to rise by 280 per cent globally by 2050 in a “business as usual” scenario, known as Steps.

 

It would account for 14 per cent of total energy demand in buildings by that date, up from less than 7 per cent today.

In contrast, it said the energy consumption of data centres, would be less demanding on grids. “There are more than 11,000 data centres registered worldwide and they are often spatially concentrated, so local effects on electricity markets can be substantial,” the IEA said. “However, at a global level, data centres account for a relatively small share of overall electricity demand growth to 2030.”

The IEA said that global electricity demand was rising at an annual rate of 1,000 TWh, equivalent to adding another Japan to electricity consumption each year. It also increased its forecast for demand in 2035 by 6 per cent, or 2,200 TWh, to 37,371 TWh.

In Australia, in 2022-2023, total electricity generation in the country increased 1 per cent, to around 274 terawatt hours, as demand increased across much of the country due to warmer and cooler weather at different points of the year.

Renewables contributed 35 per cent of total electricity generation in 2023 across OZ, including solar (16 per cent), wind (12 per cent) and hydro (6 per cent). The renewables share of total generation was up 3 per cent on 2022, the highest share of total generation on record.

About 20 per cent of Australia’s electricity was generated outside the electricity sector by households and businesses.