IEA: World moving into 'Age of Electricity' but amid geopolitical strains
Oil and gas supply likely to be in surplus later this decade but low-emission sources like renewables to generate more than half of power needs by 2030, World Energy Outlook 2024 predicts
Although current tensions and fragmentation are creating major risks for energy security and action on reducing greenhouse gas emissions, the world in the coming years is likely to be marked by a relatively abundant supply of multiple fuels and technologies.
The IEA expects an overhang of oil and liquefied natural gas (LNG) in the second half of this decade, as well as an oversupply of manufacturing capacities for technologies such as 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,” said IEA executive director Fatih Birol.
“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.”
The report also found that electricity use has grown at twice the pace of overall energy demand over the last decade, with two-thirds of the rise coming from China.
“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,” Birol said, adding that in all global trends today – the market for EVs or clean tech manufacturing – “every energy story is essentially a China story.”
The Asian superpower’s solar power generation alone could exceed the total electricity demand of the US today by the early 2030s, he said.
Global power demand growth is set to speed up further in coming years, adding the equivalent of Japan’s demand to global electricity use each year in a scenario based on today’s policy settings.
For continued growth at this pace, much greater investment in new energy systems, particularly power grids and energy storage, is needed, the report said, adding that grids and energy storage already today account for 60% of spending on renewable power.
Despite growing momentum behind clean energy transitions, the world is still a long way from its net zero goals, the report warned.
Continuing today’s policy settings – which come down to an absence of a sharp decline of global carbon dioxide emissions – the world is on course for a rise of 2.4° Celsius in global average temperatures by the end of the century, well above the Paris Agreement goal of a rise limited to 1.5°C, the IEA said.
The report emphasises the inextricable links between energy security risks and climate change. In many areas of the world, extreme weather events, intensified by decades of high emissions, are already posing profound challenges to the secure and reliable operation of energy systems, including increasingly severe heatwaves, droughts, floods and storms, it pointed out.
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