World Energy Outlook Expects Major Shifts in Energy Mix, Stronger Measures Needed

Industrial plant in Europe

(Credit: Unsplash)

by | Oct 25, 2023

This year’s World Energy Outlook from the International Energy Agency expects major shifts in global energy trends, including greatly increased prevalence of renewables and electric vehicles and a decline in fossil fuels, based on current policies alone.

In order to keep the Paris Agreement goal of 1.5 degrees Celsius within reach, however, the report explains the need for immense growth of renewables and financing for developing economies, supported by stronger policies.

The report predicts that based on current policies, solar power will generate more electricity than the entire United States power system currently does, renewables will make up nearly 50% of the global energy mix, and nearly 10 times the current amount of electric vehicles will be on the road by 2030. The report also describes heat pumps and other electric heating systems outselling fossil fuel boilers and expects three times more investment to go towards offshore wind energy projects than towards new coal and gas-fired plants.

“The transition to clean energy is happening worldwide and it’s unstoppable,” said IEA Executive Director Fatih Birol. “It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us. Governments, companies, and investors need to get behind clean energy transitions rather than hindering them. There are immense benefits on offer, including new industrial opportunities and jobs, greater energy security, cleaner air, universal energy access, and a safer climate for everyone.”

Fossil Fuels Demand Set to Peak this Decade, Still Too High for 1.5 Degree Goal

In all three explored scenarios in the report, peaks in global demand for coal, oil, and natural gas were possible in this decade based on today’s policy settings. However, meeting the 1.5-degree goal remains difficult unless immediate action to reduce fossil fuel dependence takes place. Many countries have called for a phasing out of fossil fuel subsidies to accelerate this transition.

“Taking into account the ongoing strains and volatility in traditional energy markets today, claims that oil and gas represent safe or secure choices for the world’s energy and climate future look weaker than ever,” said Birol.

Based on energy demand predictions, global emissions may be high enough to increase global temperatures by about 2.4 degrees Celsius this century, resulting in potentially catastrophic consequences if the clean energy transition is not achieved expediently. According to the IEA, the speed at which emissions decline worldwide will be determined by financing for sustainable solutions to meet energy demand for the world’s growing economies.

Report Proposes Strategy for Swift Emissions Decline

The WEO provides a global pathway for achieving a successful clean energy transition by 2030, with five main pillars that involve ramping up renewable energy and reducing fossil fuel dependency.

The five pillars include tripling global renewable energy capacity, doubling the rate of energy efficiency improvements, reducing methane emissions from fossil fuel operations by 75%, implementing financing mechanisms to triple clean energy investments in emerging economies, and taking steps towards an orderly decline of fossil fuels.

The report also explores how solar energy’s remaining untapped potential may help meet the need for such immense scaling-up of renewable energy capacity. Solar and other renewables have been found to provide an affordable energy transition, and global clean energy investment now outpaces fossil fuel spending, according to the IEA.

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