electricity demand linked to GDP

Estimating the energy needed for power generation requires an assessment of electricity demand. Electricity demand is strongly linked to GDP. Electricity use helps support economic development and, in turn, rising prosperity also increases the demand for electricity.

The linkage between electricity demand and economic progress is evident when considering electricity use (kilowatt-hours, kWh) on a per-capita basis relative to GDP per capita in countries around the world. China, South Korea and the United States are specifically highlighted in the chart, which displays OECD OECD (Organization for Economic Cooperation and Development) Member Countries (30) Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States countries in red and non-OECD nations in blue.

It is apparent that there are huge differences in personal incomes and electricity consumption between countries today. However, while specific levels vary by country, the general trend is clear. As economies grow and incomes rise, per-capita electricity use increases to serve an expanding variety of needs — from appliances and air conditioning in homes to commercial office equipment and the manufacture of goods.

As developing countries become more prosperous and billions of people move up the economic curve, demand for electricity will increase significantly.