Electricity: The New Raw Material for Economic Growth

Every industrial era has had its critical raw materials. Coal powered the first industrial revolution; oil became the strategic fuel of the 20th century. In today’s economy, electricity is moving into a similar position. It has always been essential, but the scale, speed and diversity of new electrical demand are changing its role. Electricity is no longer simply a utility input. Increasingly, access to reliable, scalable power is becoming a prerequisite for economic growth.

The long arc of electrification helps put the change in perspective. Global electricity generation was about 8TWh in 1900, roughly 600TWh in 1950, and around 13,500TWh by 2000. By 2025, it had risen to more than 31,000TWh.[1][2] The important point is not that demand is growing — it always has — but that the economy is becoming more electrical at the same time that new sources of demand are appearing at extraordinary scale. The IEA expects global electricity demand to grow about 3.6% annually through 2030, compared with 2.8% in the previous decade, adding roughly 1,100TWh of demand each year.[3]

Several forces are converging. Transportation is electrifying. Buildings are shifting toward electric heating and cooling. Industrial processes are becoming more automated and more power-intensive. Countries are rebuilding domestic manufacturing capacity under the banners of resilience, national security, and energy independence. Renewables are expanding rapidly and must be integrated with storage, transmission, and smarter controls. And artificial intelligence is adding large, concentrated loads that can move from investment decision to power requirement far faster than traditional infrastructure can be built. AI matters enormously, but it is one accelerant within a much broader transformation.

China shows the scale of what this transformation can look like. Nearly 55% of new cars sold there in 2025 were electric, and China accounted for 6 of every 10 electric cars sold globally.[4] It also added nearly 500GW of renewable capacity in 2025 — more than 60% of the world’s total renewable additions.[5] At the same time, it has built the world’s largest ultra-high-voltage transmission network. Over the last five-year planning period, the length of China’s UHV direct-current network increased from roughly 28,000km to more than 40,000km, while State Grid invested a record US$88 billion in transmission and distribution in 2025.[6][7] This is not only a clean-energy story; it is an infrastructure and industrial-competitiveness story.

The United States illustrates the other side of the equation: demand can move faster than the physical system. The Department of Energy’s National Transmission Planning Study concluded that substantial expansion of the US transmission system will be required through 2050. An industry analysis translating the study into annual construction requirements estimated a need for about 5,000 miles of new high-capacity transmission annually; only 888 miles of 345-kV-and-above transmission were completed in 2024.[8] The mismatch is fundamental. Capital can be committed quickly. A factory, battery plant or data center can be planned in months. Transmission lines, substations, transformers and interconnections often require years.

The Architecture of Power

That gap is changing the architecture of power. The answer cannot be only more central generation or only more grid investment. Both are necessary, but they are increasingly being complemented by distributed generation, battery storage, microgrids, on-site gas turbines, renewable generation and intelligent energy-management systems. Behind-the-meter generation is not new, but the urgency of securing power is pushing it into new applications and scales. SpaceXAI’s Memphis expansion, for example, has used mobile natural-gas turbines as bridge power while a permanent 1.2GW on-site plant is developed.[9] Similar pressures are accelerating interest in storage, aeroderivative turbines and other technologies that can be deployed faster than conventional grid expansion.

This is also why the relationship between technology and power is becoming circular. The World Economic Forum recently described AI and power systems as increasingly rewriting each other’s rules: computing is creating new electricity demand, while digital tools can improve forecasting, storage dispatch, demand response, asset utilization and grid flexibility.[10] Jensen Huang has made the same point from another direction, placing energy at the base of NVIDIA’s five-layer AI infrastructure stack.[11] The broader lesson goes beyond AI: The electrical system itself is becoming more distributed, flexible and intelligent because the pace of demand requires it.

Mexico sits squarely inside this global reality. Its manufacturing base, nearshoring opportunity and growing digital infrastructure create substantial upside, but also make power availability and grid capability increasingly strategic. CFE’s current investment plan includes more than US$8 billion for nationwide transmission projects and significant new electricity-storage capacity.[12] The opportunity is not unique to Mexico, nor is the constraint. What matters is whether generation, transmission, distribution and flexible resources can expand at the pace new investment requires.

For executives, investors and policymakers, that changes the sequence of decisions. Electricity can no longer be treated as a downstream utility question addressed after a site or investment has been selected. Power availability — in the required quantity, at the right location, with the necessary reliability and on the required timeline — increasingly belongs at the beginning of the strategy discussion. The winners in the next phase of industrial and digital growth will not simply be those that attract capital, technology and talent. They will be the countries and companies capable of generating, moving, storing and intelligently managing the electricity required to put them to work. Electricity is becoming the new raw material for growth.

Sources:

[1] Vaclav Smil, “Energy in the Twentieth Century: Resources, Conversions, Costs, Uses, and Consequences,” Annual Review of Energy and the Environment, 2000. Historical global electricity generation estimates: 8 TWh (1900), 600 TWh (1950), 13,500 TWh (2000).

[2] Our World in Data, “Electricity generation, 1900–2025,” based on Ember (2026), Energy Institute Statistical Review of World Energy (2026), and Pinto et al. (2023). Global electricity generation exceeded 31,000 TWh in 2025.

[3] International Energy Agency, Electricity 2026 / Global Energy Review 2026. Global electricity demand is projected to grow about 3.6% annually through 2030, versus 2.8% in the prior decade, with annual additions of roughly 1,100 TWh.

[4] International Energy Agency, Global EV Outlook 2026. Close to 55% of new cars sold in China in 2025 were electric; China represented roughly 60% of global electric-car sales.

[5] International Energy Agency, Global Energy Review 2026, “Technology: Solar PV and wind.” China added nearly 500 GW of renewable capacity in 2025, accounting for more than 60% of global renewable-capacity growth.

[6] National Energy Administration / State Grid data reported during China’s 14th Five-Year Plan: UHV DC transmission-line length increased from approximately 28,000 km to more than 40,000 km over the five-year period.

[7] International Energy Agency, World Energy Investment 2025; State Grid reporting. China invested approximately US$88 billion in transmission and distribution in 2025; State Grid reported a record RMB650 billion grid-investment program.

[8] U.S. Department of Energy, National Transmission Planning Study (2024); Grid Strategies, 2025 transmission analysis. The DOE study concludes that substantial expansion of the U.S. transmission system will be required through 2050; Grid Strategies estimates roughly 5,000 miles of new high-capacity transmission per year, versus 888 miles of 345-kV-and-above transmission completed in 2024.

[9] SpaceXAI / xAI, Memphis power-infrastructure disclosures, 2026. The company has used temporary mobile natural-gas turbines as bridge power and has described plans for a 1.2-GW permanent on-site power plant.

[10] World Economic Forum, “How AI and power systems are rewriting each other’s rules,” August 21, 2026.

[11] NVIDIA, “The AI 5-Layer Cake,” and Jensen Huang remarks on AI infrastructure: energy, chips, infrastructure, models and applications, with energy as the foundational layer.

[12] Comisión Federal de Electricidad (CFE), 2025–2030 General Investment Plan / 3Q 2025 Investor Presentation. CFE materials describe more than US$8 billion in nationwide transmission investment and significant new battery-energy-storage