Clean energy to outpace global demand growth, IEA says
Summary
Despite rapid growth, clean power needs to scale up faster to get on track for net-zero emissions, the International Energy Agency warns.Clean-energy sources are set to grow at a faster pace than global energy demand by the end of the decade, becoming the largest source of energy in the mid-2030s, the International Energy Agency said.
Based on current policy settings, global energy demand is set to slow between 2023 and 2035 to about 0.5% a year as a result of efficiency measures, electrification and a rapid build-out of renewables. This compares to a rate of around 1.4% on average in the 2013-23 period.
Meanwhile, cleaner forms of energy—solar and wind in particular—are poised for rapid growth. This will result in peak fossil-fuels demand before 2030 and bring their use down to 58% of total demand in 2050 from 80% last year.
“Continued progress of transitions means that, by the end of the decade, the global economy can continue to grow without using additional amounts of oil, natural gas or coal," the IEA said in its latest report on Wednesday.
Investments in renewables are forecast to reach $850 billion in 2030 from around $680 billion last year, with total renewables capacity worldwide increasing more than two fold.
Under the IEA’s so-called “announced pledges scenario"—which assumes all national energy and climate targets are met in full and on time—clean energy is projected to meet 40% of global energy demand by 2035 and rise to nearly three-quarters by 2050. Under the net-zero scenario, clean energy would meet 90% of demand by midcentury, according to the agency’s projections.
In all scenarios, electrification is poised to accelerate across all sectors, providing heating, cooling and mobility, as well as powering motors and appliances.
Still, “while clean power is gaining momentum, today’s policy settings and market conditions do not deliver fast enough growth to move onto a pathway to net-zero emissions," the IEA said.
Last year, global energy demand rose by around 2% and, despite a record deployment of clean energy, two-thirds of the increase was met by fossil fuels, pushing energy-related carbon-dioxide emissions to record highs.
Meanwhile, fuel-importing regions like Europe have been hit hard by higher fossil-fuel and electricity prices, such as during the 2022 energy crisis.
“Geopolitical uncertainty is exposing the underlying fragilities of the global energy system," IEA Executive Director Fatih Birol said. “Energy infrastructure is also facing increasing risks from extreme weather events that are becoming an all too common aspect of life."
Ample crude oil spare capacity—which is expected to reach 8 million barrels a day by 2030—and a wave of new liquefied natural-gas projects should partly provide a shield against the risk of sharp price shocks, but the security of fuel supplies isn’t guaranteed, the IEA said.
As part of a series of efforts needed to accelerate the transition toward a net-zero emissions system, the agency said it is crucial to scale up clean-energy investment in developing and emerging markets, which currently account for only 15% of total investment despite being home to two-thirds of the global population.
