The World Energy Outlook: IEA's Power Predictions

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The IEA has published its World Energy Outlook
The IEA’s annual World Energy Outlook explores energy security, the rise of clean tech & sustainability – with help from an AI tool designed by Microsoft

The International Energy Agency (IEA) releases its flagship World Energy Outlook (WEO) annually, providing critical analysis of global energy trends and projections.

Regarded as a leading authority in the field, the report delves into energy demand, supply, security, emissions and economic development, offering guidance for policymakers and industry leaders.

Its 2024 edition arrives amidst escalating geopolitical tensions, particularly in the Middle East, and emphasises the challenges of accelerating clean energy transitions while maintaining energy security.

The IEA says: “It identifies and explores the biggest trends in energy demand and supply, as well as what they mean for energy security, emissions and economic development.”

Simplifying the report with AI

Given the complexity of such detailed reports, the IEA has partnered with Microsoft to launch an innovative tool: the World Energy Outlook GPT (WEO GPT).

This AI-powered system enables users to explore the report more efficiently by tailoring searches and insights to individual interests.

Melanie Nakagawa, CSO of Microsoft

Microsoft Chief Sustainability Officer Melanie Nakagawa said: “At Microsoft, we're working to harness the power of AI for sustainability. This includes building tools to empower individuals, organisations and communities to learn about the environment and take action.

“I'm excited to share that Microsoft partnered with the International Energy Agency to launch WEO GPT to help you explore IEA’s flagship annual report with a new AI-powered agent.

“This allows users to more easily find insights and dig into their analysis in new ways.”

The IEA said the tool “lets anyone curious about the report’s findings to more easily dig into its data, analysis and projections”.

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Energy security and market trends

The WEO 2024 highlights significant shifts in the global energy landscape:

  1. Energy security concerns: While the immediate effects of the global energy crisis are subsiding, risks of disruption remain high. The IEA observes that “dependencies can quickly turn into vulnerabilities,” particularly in clean energy supply chains with high market concentration.

  2. Fragmented markets: Nearly 200 trade measures affecting clean energy technologies have been introduced since 2020, increasing market fragmentation. However, cleaner energy systems offer opportunities to reduce these risks.

  3. Climate and security links: Extreme weather events, exacerbated by emissions, are increasingly impacting energy security.

The IEA says renewables are overtaking fossil fuels

Transitioning to a cleaner future

The report identifies promising progress in clean energy transitions but acknowledges challenges ahead:

  • Rising investments in clean energy: Global clean energy projects now approach US$2tn annually, nearly double the expenditure on fossil fuels. Over 560 gigawatts (GW) of renewable capacity was added in 2023 alone, with renewable power generation capacity projected to more than double by 2030.
  • China’s leadership: China continues to dominate clean energy expansion, accounting for 60% of global renewable capacity additions in 2023. The country’s solar photovoltaic (PV) generation is on track to surpass the current electricity demand of the United States by the early 2030s.
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Despite this momentum, the report raises concerns about the integration of new renewable capacity into power grids and the slow pace of grid expansions in some regions.

The long-term outlook

China's projected coal demand (dark blue), with its forecast renewables offsetting (light blue)

The WEO underscores the interplay between clean energy development, market dynamics and policy decisions:

  • Peak fossil fuel femand: By 2030, demand for oil, natural gas and coal is expected to decline as clean energy adoption grows.
  • Global electrification: Electricity demand is rising faster than overall energy demand, driven largely by China. By 2035, electricity consumption is projected to be 6% higher than previous estimates, reflecting growth in electric vehicles (EVs) and other innovations.
  • EV expansion: Electric vehicle sales, currently 20% of new cars worldwide, are expected to reach 50% by 2030, particularly spurred by Chinese manufacturers.
China is increasingly moving away from fossil fuels, the IEA says

However, the report notes that policy uncertainty and high capital costs are slowing progress in developing economies.

Faster progress is needed

While clean energy capacity is expanding, imbalances in investment flows and supply chains persist.

Addressing these challenges is essential to accelerate transitions.

The IEA points out that clean energy manufacturing capacity for technologies like solar PV has surged, but sustained efforts are needed to keep costs declining and deployment momentum strong.

As the IEA concludes: “More than ever, the energy outlook is complex, multifaceted, and defies a single view on how the future might unfold."


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