Understanding the World Energy Outlook’s projections.
Today, 50 years on from the oil shock that led to the founding of the International Energy Agency (IEA), the world once again faces a moment of high geopolitical tensions, with significant uncertainty in the energy sector driven by a crisis in the Middle East. However, as the IEA lay out in the new edition of our flagship World Energy Outlook, the global energy system has also changed considerably since the early 1970s – and further changes are quickly unfolding before us, with considerable implications for efforts to tackle climate change and ensure energy security.
Developing the extensive World Energy Outlook every year is no easy task. The report provides in-depth analysis and strategic insights into many aspects of the global energy system, evaluating different scenarios and assessing the implications for areas such as energy security, climate change goals and economic development, IEA reported.
Since 1993, the International Energy Agency have provided medium- to long-term energy projections using a continually evolving set of detailed, world-leading modelling tools. First came the World Energy Model (WEM) – a large-scale simulation model designed to replicate how energy markets function. A decade later, the Energy Technology Perspectives (ETP) model – which incorporates more than 800 individual technologies across the energy system – was developed for use in parallel to the WEM.
Then, in 2021, the IEA adopted a new hybrid approach, relying on the strengths of both models to develop the first comprehensive study of how to build a global energy system with net zero emissions by 2050. The IEA’s Global Energy and Climate Model is now the principal tool used to generate detailed sector-by-sector and region-by-region long-term scenarios across IEA publications – from the World Energy Outlook to the recent update of our Net Zero Roadmap.
This approach means that as the facts change, so do our projections. Starting conditions that feed into the Stated Policies Scenario (STEPS), which is based on today’s policy settings, are regularly updated to account for policy changes, market conditions and technological developments. This explains why, for example, the STEPS projections in this year’s WEO show more than 220 million electric passenger cars on the road in 2030, a 20% increase on the number from last year’s WEO.
Under today’s policy settings, clean energy technologies are set to play a much greater role in 2030 than they do today. These projections see:
Nearly 10 times as many electric cars on the road;
Renewables accounting for nearly 50% of the global electricity mix, up from around 30% today;
Heat pumps and other electric heating systems outselling gas boilers globally;
Peaks in demand for oil, gas and coal by 2030.
Even so, demand for fossil fuels is set to remain much too high to keep within reach the Paris Agreement goal of limiting the rise in average global temperatures to 1.5 °C. The World Energy Outlook 20203 (WEO-2023) finds that despite the impressive clean energy growth we’re now seeing, emissions are still set to push up global average temperatures by around 2.4 °C this century, based on today’s policy settings.
Given this trajectory, WEO-2023 proposes an urgent global strategy to ensure the 1.5 °C target remains on the table. By 2030, the world needs to:
Triple global renewable energy capacity;
Double the rate of energy efficiency improvements;
Slash methane emissions from fossil fuel operations by 75%;
Develop innovative, large-scale financing mechanisms to triple clean energy investments in emerging and developing economies;
Pursue measures to ensure an orderly decline in the use of fossil fuels.
Concrete plans to meet these objectives can form a basis for success at the COP28 climate change conference in Dubai in late November and early December.