World Energy Outlook 2024

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 latest edition of the World Energy Outlook published by the International Energy Agency (IEA) in October 2024.

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 a 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.

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 report 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 last ten years coming from China.

Greater investment in new energy systems needed

For clean energy to continue growing at pace, much greater investments in new energy systems, especially in electricity grids and energy storage, are necessary. Today, for every US dollar spent on renewable power, 60 cents are spent on grids and storage, highlighting how essential support of infrastructure is not keeping pace with clean energy transitions. Secure decarbonisation of the electricity sector requires investment in grids and storage to increase even more quickly than clean generation, and the investment ratio to rebalance to 1:1. Many power systems are currently vulnerable to an increase in extreme weather events, putting a premium on efforts to bolster their resilience and digital security.  

Despite growing momentum behind clean energy transitions, the world is still a long way from a trajectory aligned with its net zero goals. Decisions by governments, investors and consumers all too often entrench the flaws in today’s energy system, rather than pushing it towards a cleaner and safer path, the report finds. Reflecting the uncertainties in the current energy world, it includes a sensitivity analysis for the speed at which renewables and electric mobility might grow, how fast demand for LNG might rise and how heatwaves, efficiency policies and the rise of artificial intelligence (AI) might affect electricity demand going forward.

World on course for a rise of 2.4 °C by the end of the century

Based on today’s policy settings, global carbon dioxide emissions are set to peak imminently, but the absence of a sharp decline after that means the world is on course for a rise of 2.4 °C in global average temperatures by the end of the century, well above the Paris Agreement goal of limiting global warming to 1.5 °C. The report underlines the inextricable links between risks of energy se-curity and climate change. In many areas of the world, extreme weather events, intensified by decades of high emissions, are already posing profound challenges for the secure and reliable operation of energy systems, including increasingly severe heatwaves, droughts, floods and storms.

A new energy system needs to be built to last, the report emphasises, one that prioritises security, resilience and flexibility, and ensures that benefits of the new energy economy are shared and inclusive. In some regions of the world, high financing costs and project risks are limiting the spread of cost-competitive clean energy technologies to where they are needed most. This is especially the case in developing economies where these technologies can deliver the biggest returns for sustainable development and emissions reductions. Lack of access to energy remains the most fundamental inequity in today’s energy system, with 750 million people – predominantly in sub-Saharan Africa – without access to electricity and over 2 billion without clean cooking fuels.

(IEA/ile)

Read more and download the report on the IEA website