According to the International Energy Agency's (IEA) new report "World Energy Outlook 2024", regional conflicts and geopolitical tensions are highlighting significant weaknesses in today's global energy system. This points to the need for stronger policy and greater investment to accelerate and broaden the shift to cleaner and more secure technologies.

The latest edition of the "World Energy Outlook" (WEO), the most authoritative source of energy analysis and projections, examines how shifting market trends, changing geopolitical uncertainty, new technologies, the clean energy transition and the growing impacts of climate change are reshaping what a secure energy system means.

The report "World Energy Outlook 2024" (hereafter – the report) places particular emphasis on the fact that today's geopolitical tensions and fragmentation pose serious risks both to energy security and to global action on reducing greenhouse gas (GHG) emissions.

The projections set out in the report, based on today's policy settings, indicate that in the coming years the world will enter a new energy market situation, characterised both by continuing geopolitical threats and by a relatively abundant supply of many energy sources and technologies. This includes a surplus supply of oil and liquefied natural gas (LNG) that will emerge in the second half of the 2020s, as well as a large surplus of manufacturing capacity for some key clean energy technologies, particularly solar photovoltaics and batteries.

"In the second half of this decade, depending on how geopolitical tensions develop, the prospect of larger (or surplus) oil and gas supplies will move us into a very different energy world from the one we have experienced in recent years during the global energy crisis. That means downward pressure on prices, which would bring some relief to consumers hit hard by price rises. A period of respite that eases fuel price increases can give policymakers the opportunity to focus on scaling up investment in the clean energy transition and on removing inefficient fossil fuel subsidies. It means that government policy and consumer choices will have an enormous influence on the future of the energy sector and on tackling climate change," says IEA Executive Director Dr Fatih Birol.

Demand for the three main fossil fuels will peak as early as 2030

On the basis of current policy settings, the report concludes that by 2030 more than half of the world's electricity will be generated from low-emission sources, while demand for the three fossil resources – coal, oil and gas – will still be substantial by the end of the decade.

Clean energy is entering the energy system at an unprecedented pace, but its uptake is uneven across technologies and markets.

Against this backdrop, the "World Energy Outlook 2024" shows that, as global electricity demand rises rapidly, the contours of a new, far more electrified energy system are becoming ever clearer.

"In previous World Energy Outlooks, the IEA made clear that the future of the world's energy system is 'electric', and that is now plain for everyone to see. In the history of energy we have seen the age of coal and the age of oil, and we are now moving rapidly into the age of electricity, which will define the global energy system going forward and will rest increasingly on clean sources of electricity," stressed IEA Executive Director Dr Fatih Birol.

Over the past decade, electricity consumption has grown twice as fast as total energy demand. Two-thirds of the growth in global electricity demand over the past ten years has come from China which, as with many other global energy trends, is the decisive player in this area too.

"Whether it is investment, fossil fuel demand, electricity consumption, the roll-out of renewables, the electric vehicle market or clean technology manufacturing, we are now in a world where essentially almost every energy issue is connected to China. For example, China's expansion of solar power is currently proceeding so rapidly that by the 2030s – in less than ten years – solar generation in China could exceed total electricity demand in the United States today," said Dr Fatih Birol.

Growth in global electricity demand will continue to increase even faster

Growth in global electricity demand will continue to accelerate in the years ahead, adding the equivalent of Japan's annual demand to global electricity consumption every year. That is what will happen if the scenario based on current policy settings materialises, and growth will be faster still where national and international net zero targets are met.

For clean energy supply to keep growing at this pace, far greater investment is needed in new energy systems, especially in electricity grids and energy storage. At present, for every dollar spent on renewable energy, 60 cents is spent on grids and storage. This shows that the supporting infrastructure is "not keeping up" with the clean energy transition. The secure decarbonisation of the electricity sector requires investment in transmission grids and energy storage to grow faster still than investment in generation, and the investment ratio to be rebalanced to 1:1.

Many energy systems are currently vulnerable to the rise in extreme weather events, so efforts must be made to increase their resilience and digital security.

The world is still far from the coordinated action that net zero targets would require

Despite growing momentum behind the clean energy transition, the world remains far from a trajectory consistent with its net zero targets. The report finds that the decisions of governments, investors and consumers too often entrench the shortcomings of today's energy system rather than steering it onto a cleaner and more secure path.

Reflecting the uncertainties in today's energy world, WEO-2024 includes analysis of how quickly the share of renewables and electric mobility could grow, how quickly – demand for liquefied natural gas could rise, and how heatwaves, efficiency policy and the growing use of artificial intelligence (AI) could affect future electricity demand.

On the basis of current policy settings, global carbon dioxide emissions will soon peak and, absent a rapid decline, average global temperatures will rise by 2.4 °C by the end of the century, well above the target set in the Paris Agreement – to limit global warming to 1.5 °C.

The new energy system must be built to be sustainable

The 2024 "World Energy Outlook" report highlights the "inextricable link between energy security risks and climate change". In many parts of the world, extreme weather, intensified by decades of high emissions, is already creating serious problems for the safe and reliable operation of energy systems. Around the world, severe heatwaves, droughts, devastating floods and storms are being seen more often and in greater numbers.

The report stresses that the new energy system must be built to be sustainable, with security and flexibility as its priorities; it must be ensured that the benefits of the new energy economy are shared and inclusive.

In some parts of the world, high financing costs and project delivery risks are limiting the spread of cost-competitive clean energy technologies where they are needed most. This applies particularly to developing countries, where these technologies can deliver the greatest returns for sustainable development and emissions reduction.

Inadequate access to energy remains the most significant factor of inequality in today's energy system. A very large number of people – 750 million – (mainly in sub-Saharan Africa) have no access to electricity, and more than 2 billion – have no access to clean cooking fuels. Such a situation can create (and already is creating) catastrophic geopolitical crises, rising refugee numbers, risks of social unrest and human rights violations.