The World Energy Outlook 2024 (WEO-2024), an annual report published by the International Energy Agency (IEA) in 2024, provides an in-depth analysis of the global energy system, exploring the progress and challenges of the global clean energy transition in the context of the current multiple contexts of geopolitics, energy security and climate change. The report depicts the progress and challenges of the global clean energy transition in three scenarios: Stated Policies Scenario (STEPS), Announced Pledges Scenario (APS), and Net Zero Emissions by 2050 Scenario (NZE). ), depicting possible pathways for the global energy system under different policy environments.
The IEA’s World Energy Outlook 2024 comes at a time of great uncertainty for global energy markets. The report emphasizes that regional conflicts and geopolitical tensions have highlighted the fragility of the global energy system, with geopolitical crises such as the conflict in the Middle East and the Russia-Ukraine war triggering global concerns about energy security, and the need for stronger policies and more investment to accelerate the transition to cleaner and safer technologies.IEA Administrator Fatih Birol noted that the next five years will see a greater abundance in the supply of oil and natural gas, and even a a possible surplus, leading prices into a downward spiral and providing policymakers with the space to focus on investments in the clean energy transition. At the same time, the acceleration of clean energy investment and technology development globally demonstrates the commitment of countries to transition to a low-carbon economy.
Key Findings and Trend Analysis
Global Energy Electrification Trends: According to the latest news, the world is entering a phase of rapid expansion of “electrification,” driven by the spread of clean energy and electric vehicles, and the IEA forecasts a significant increase in global electricity demand by 2030, with emerging markets and developing economies accounting for 80% of the increase, with China making the largest contribution. China is not only the world’s largest producer of solar cells. Not only is China the world’s largest producer of solar cells, but the continued growth in sales of electric vehicles is further driving the electrification of its energy system.
Rapid Deployment of Clean Energy: In the clean energy sector, the report notes a 40-fold increase in installed solar capacity and a six-fold increase in wind power since 2010. 560 GW of new clean energy capacity will be added globally by 2023, and the world is investing $2 trillion per year in clean energy, twice the amount invested in fossil fuels. the IEA expects that in the STEPS scenario, clean energy capacity will be close to 10,000 GW by 2030. 10,000 GW.
Peak fossil Fuel Demand: The report finds that while fossil fuels continue to meet a significant portion of global energy demand, demand for coal, oil and natural gas is projected to decline after peaking in 2030 with the rapid development of clean energy sources. In the STEPS scenario, almost all new energy demand over the next 10 years will be provided by clean energy, which is critical for global emissions reductions.
Geopolitical and Energy Security Challenges: The vulnerability of global energy supply is particularly emphasized in the IEA report. Tensions in the Middle East and the Russia-Ukraine conflict have made countries realize the risks of over-reliance on a single energy supply chain.The IEA calls for accelerated expansion of clean energy to reduce the threat to energy security from geopolitical crises.
Three Scenario Analyses
Established Policy Scenario (STEPS)
The STEPS scenario assumes that the world continues to evolve according to current declared policies. In this scenario, global demand for electricity is projected to grow at a rate of 3% per year through 2030. Declining costs of clean energy technologies have helped drive the penetration of low-carbon power generation technologies such as solar and wind, but it will still be difficult to meet the 1.5°C target set by the Paris Agreement.
Climate Commitment Scenario (APS)
The APS scenario assumes that the world is able to implement policies in strict compliance with climate commitments and net-zero emissions targets. The IEA projects in this scenario that global electricity demand will grow at an average annual rate of 3.5% through 2030. This scenario expects greenhouse gas emissions to be gradually contained below current levels, as countries invest in clean energy technologies and supportive policies continue to ramp up.
2050 Net Zero Emissions Scenario (NZE)
The NZE scenario envisions a global goal of net-zero emissions by 2050, in which the IEA expects global electricity demand to grow at an average annual rate of 4.5%. This scenario requires more aggressive policy interventions and increased investment in clean energy in the power system.
Key Challenges to Achieving Net-zero Emissions
The report notes that current underinvestment in grids and energy storage is limiting further deployment of clean energy. the IEA emphasizes that to achieve a low-carbon transition in the global power system, the growth rate of investment in grids and storage must outpace that of investment in power generation. Despite the rapid development of clean energy technologies, there are imbalances in deployment across markets and technologies globally, and there is a need to accelerate the process of overcoming policy and market barriers to ensure that technological innovations lead to larger-scale emission reductions. At the same time, the frequency of extreme weather events poses a challenge to the security of the energy system. the IEA warns that events such as heat waves, droughts, and floods can lead to instability in the energy system, increasing the burden on the grid and storage systems, and that coping with the impacts of extreme weather on the energy system will require more resilient, cleaner energy systems.
Future Policy Recommendations and Outlook
To ensure a smooth clean energy transition and to safeguard energy security, the IEA has made a number of policy recommendations.
Increase Investment in Clean Energy and Infrastructure: To meet future growth in electricity demand and achieve emission reduction targets, the world must significantly increase investment in clean energy technologies and grid energy storage. The report notes that for every $1 invested in clean energy technologies, only $0.6 is currently invested in grid and storage systems, a ratio that needs to be increased to meet future demand.
Promoting International Cooperation and Innovation: Technology sharing and international cooperation are crucial in the energy transition process. Especially for developing countries, the IEA suggests that developed countries increase financial and technical assistance for clean energy technologies to ensure the overall effectiveness of global emission reduction.
Promoting the Diversification of Clean Technologies: The IEA advocates the vigorous development of a variety of clean energy technologies globally, including solar energy, wind energy, hydrogen energy, etc., to meet the energy needs of different regions. Diversification and innovation in clean technologies can effectively reduce the risks associated with single-energy dependence.
The IEA’s World Energy Outlook 2024 report reveals the profound changes facing the global energy system and also identifies key barriers to achieving net-zero emissions in the future. Accelerating investment in clean energy and increasing demand for electrification hold great promise for the global energy transition. However, the report warns that the world will struggle to meet the Paris Agreement’s 1.5°C target if current investments and policies are insufficient to meet future challenges. Therefore, countries should accelerate policy development and implementation, strengthen infrastructure development, and promote clean technology innovation and cooperation globally to realize a more sustainable and secure energy future.
