Britain's electricity demand has risen for the second year in a row after two decades of decline, marking a turning point as electric vehicles, heat pumps and AI data centers usher in a new era of electrification.
According to analysis by Imperial College London for Drex Electric Insights, provisional data to 2025 shows electricity consumption rising by 3 per cent, the fastest annual increase since 2001. This is the first time the UK has recorded demand growth for two consecutive years since 2002-03.
Electricity use is projected to reach 273 terawatt-hours (TWh) this year, up from 266 TWh in 2024 and 262 TWh in 2023. Demand peaked at 347 TWh in 2005 before falling steadily as equipment became more efficient, heavy industry declined, and parts of the economy deindustrialized.
The long-term trend appears to have now reversed.
“After 20 years of demand decline, we have reached a turning point,” said Ian Staffel, associate professor of sustainable energy at Imperial College and lead author of the Electric Insights analysis. “Electric vehicles, heat pumps and data centers powering AI are now driving electricity demand.”
This growth reflects rapid electrification in transportation, heating and digital infrastructure. Installations of heat pumps are projected to increase by nearly 20 percent in 2025, while electric vehicle sales are projected to increase by 28 percent, with nearly one in three new cars now electric. Demand for electricity from data centers powered by artificial intelligence is also accelerating. It is estimated to have doubled since 2020 and now accounts for 3-4 per cent of UK electricity consumption, with projections suggesting it could rise to more than 10 per cent within a decade.
The Climate Change Committee has previously warned that electricity demand could at least double by 2050 if Britain is to meet its decarbonisation targets, a scenario that undercuts the government's plans to expand generation capacity and upgrade the national grid at a cost of tens of billions of pounds.
Importantly, the analysis shows that additional demand in 2025 was entirely met by clean energy. Renewable generation grew rapidly due to a 35 percent increase in solar power following the sunniest year on record and the connection of new solar farms. Solar still accounts for only 7 percent of the total electricity mix, but wind remained the largest source at 31 percent for the second year in a row.
After prolonged maintenance interruptions and unplanned shutdowns at older reactors, gas-fired generation provided 28 percent of electricity, while nuclear generation dropped to just 12 percent – its lowest share since the 1980s.
“Our electricity system has gotten cleaner as we've grown,” Staffel said. “Renewable energy meets all the additional demand placed on the grid.”
Carbon emissions from electricity generation fell to their lowest level since 1938 following the final closure of coal-fired power stations in 2024. However, the cost impact was less benign. Wholesale electricity prices increased 12 percent over the year due to higher gas prices and a sharp increase in carbon costs.
The data underlines a fundamental shift in the UK's energy system: electricity demand is rising again – not because of inefficiency, but because electricity is replacing fossil fuels across the economy. The challenge now is whether production, networks and storage can grow fast enough to keep pace without rapidly increasing costs for homes and businesses.
jamie young
Jamie is a senior reporter at Business Matters, with over a decade of experience in UK SME business reporting. Jamie has a degree in Business Administration and regularly attends industry conferences and workshops. When Jamie is not reporting on the latest business developments, he is passionate about mentoring budding journalists and entrepreneurs to inspire the next generation of business leaders.