According to the latest WEO, regional conflicts and geopolitical strains are adding to fragilities in today’s global energy system, emphasising the need for stronger policies and greater investments to accelerate and expand the transition to cleaner and more secure technologies.
The IEA has examined 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 report claims that current geopolitical tensions and fragmentation are creating major risks for energy security and for global action on reducing greenhouse gas emissions.
The report’s projections 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 – which includes an overhang of oil and liquefied natural gas (LNG) supply coming into view during the second half of the 2020s, and an excess of manufacturing capacity for some key clean energy technologies, notably solar PV and batteries.
The report finds that low-emissions sources are set to generate over half of the world’s electricity before 2030, but that demand for fossil fuels is still projected to peak by the end of the decade. It claims that clean energy is entering the energy system at an unprecedented rate, but deployment is far from uniform across technologies and markets.
The 'Age of Electricity'
In this context, the WEO-2024 also states the beginnings 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.
“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,” IEA executive director, Fatih Birol, said in a statement. “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.”
For clean energy to continue growing at pace, the report claims that much greater investment in new energy systems, especially in electricity grids and energy storage, are necessary. Today, for every dollar spent on renewable power, 60 cents are spent on grids and storage, highlighting how essential supporting infrastructure is not keeping pace with clean energy transitions.
It also claims that secure decarbonisation of the electricity sector requires investment in grids and storage to increase even more quickly than clean generation, as 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 too often entrench the flaws in today’s energy system, rather than pushing it towards a cleaner and safer path, the report finds.
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Reflecting the uncertainties in the current energy world, the WEO-2024 includes 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.
Ultimately, a new energy system needs to be built to last, the WEO-2024 emphasises: one that prioritises security, resilience and flexibility, and ensures that benefits of the new energy economy are shared and inclusive.
“The IEA’s new report is a stark reminder of the pressing need to modernise our grid and deploy renewables at scale. Investing in renewables is key to enhancing energy security and unlocking a secure and affordable energy system that is resilient to global change,” commented Matthew Boulton, director of Solar, Storage and Private Wire of EDF Renewables UK.
“While it is excellent to see the rapid growth of renewables globally, we still need to move faster to get on track for net zero. We must utilise technologies like battery storage to create greater flexibility and invest in a stronger, smarter grid for a reliable system that can support the clean energy we need.
“In light of the UK government’s target of a clean energy system by 2030, upgrading the grid is now more urgent than ever. With quick, strategic investment in the development of our infrastructure, we can deploy renewables at pace, hit our targets and support the transition to net zero.”
The World Energy Outlook 2024 can be accessed and read in full here.
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