World on the brink of a new age of electricity, says International Energy Agency

The International Energy Agency (IEA) has declared that the world stands at the threshold of a new era of electricity, as demand for fossil fuels is projected to peak by the end of the decade. In its newly released World Energy Outlook, the IEA suggests that a surplus in oil and gas supplies could pave the way for significant investment in green energy. However, the agency warns of substantial uncertainty due to ongoing geopolitical conflicts in the Middle East and Russia, both key oil and gas producers. Additionally, this year’s elections in countries responsible for half of the world’s energy consumption add to the unpredictability.

“In the second half of this decade, we could be facing a new energy landscape where sufficient—or even excess—oil and gas supplies exist, depending on how geopolitical tensions evolve,” said Fatih Birol, the IEA’s Executive Director. Birol explained that such a scenario could lower fossil fuel prices and provide countries with the resources to accelerate the transition to clean energy, marking the dawn of what he called the “age of electricity.”

The IEA reported that 2023 saw a record 560 gigawatts (GW) of renewable energy capacity commissioned globally. Looking ahead, an estimated $2 trillion will be invested in clean energy this year, nearly double the investment in fossil fuels. This shift underscores the world’s movement toward decarbonization.

Under current government policies, global oil demand is forecasted to peak at nearly 102 million barrels per day before 2030, before falling back to 99 million barrels per day by 2035, driven primarily by the increasing use of electric vehicles in the transport sector.

The IEA also pointed to rising energy demand from air conditioning as a significant factor in the future. With increasing global temperatures and growing incomes, the demand for air conditioning is expected to surge by 280% by 2050. This will require an additional 697 terawatt hours (TWh) of electricity by 2030, more than three times the demand from computer data centers. Electric vehicles will require even more energy, with an additional 854 TWh needed by the end of the decade.

Oil prices are projected to decline from $82 per barrel in 2023 to $75 per barrel by 2050 under the IEA’s current scenario. However, if governments commit to aggressive emissions reductions in line with net-zero targets, oil prices could drop as low as $25 per barrel by 2050.

This forecast signals a pivotal shift in the global energy landscape, with the potential for cleaner and more sustainable energy sources to take center stage in the coming decades.

The full reporter can be found on the link below:

Source: IEA and CTK

https://www.iea.org/reports/world-energy-outlook-2024