Regional conflicts and geopolitical strains are highlighting significant fragilities in today’s global energy system, making clear the need for stronger policies and greater investments to accelerate and expand the transition to cleaner and more secure technologies, according to the International Energy Agency (IEA)’s new World Energy Outlook 2024.
The latest edition of the World Energy Outlook (WEO), the most authoritative global source of energy analysis and projections, examines how shifting market trends, evolving geopolitical uncertainties, emerging technologies, advancing clean energy transitions and growing climate change impacts are all changing what it means to have secure energy systems. In particular, the new report underscores that today’s geopolitical tensions and fragmentation are creating major risks both for energy security and for global action on reducing greenhouse gas emissions.
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The report’s projections based on today’s policy settings indicate that the world is set to enter a new energy market context in the coming years, marked by continued geopolitical hazards but also by relatively abundant supply of multiple fuels and technologies. This includes an overhang of oil and liquefied natural gas (LNG) supply coming into view during the second half of the 2020s, alongside a large surfeit of manufacturing capacity for some key clean energy technologies, notably solar PV and batteries.
“In the second half of this decade, the prospect of more ample—or even surplus—supplies of oil and natural gas, depending on how geopolitical tensions evolve, would move us into a very different energy world from the one we have experienced in recent years during the global energy crisis,” IEA executive director Fatih Birol says.
“It implies downward pressure on prices, providing some relief for consumers that have been hit hard by price spikes. The breathing space from fuel price pressures can provide policymakers with room to focus on stepping up investments in clean energy transitions and removing inefficient fossil fuel subsidies. This means government policies and consumer choices will have huge consequences for the future of the energy sector and for tackling climate change.”
Based on today’s policy settings, the report finds that low-emissions sources are set to generate more than half of the world’s electricity before 2030—and demand for all three fossil fuels, coal, oil and gas—is still projected to peak by the end of the decade. Clean energy is entering the energy system at an unprecedented rate, but deployment is far from uniform across technologies and markets.
In this context, the WEO-2024 also shows that the contours of a new, more electrified energy system are coming into focus as global electricity demand soars. Electricity use has grown at twice the pace of overall energy demand over the last decade, with two-thirds of the global increase in electricity demand over the past 10 years coming from China.
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“In previous World Energy Outlooks, the IEA made it clear that the future of the global energy system is electric—and now it is visible to everyone,” Dr Birol says.
“In energy history, we’ve witnessed the Age of Coal and the Age of Oil—and we’re now moving at speed into the Age of Electricity, which will define the global energy system going forward and increasingly be based on clean sources of electricity.”
Read the full report here.
