The IEA has provided a roadmap for understanding the current and future dynamics of global energy systems: find out the 2024 insights.
The International Energy Agency (IEA) has once again provided a roadmap for better understanding the current and future dynamics of global energy systems in its latest World Energy Outlook 2024.
Amid rising geopolitical tensions, economic shifts, and accelerating climate concerns, the report offers critical analysis and projections to guide policymakers, industries, and investors.
Global energy systems are undergoing profound transformations, prompted by rapid technological innovation, shifting geopolitical priorities, and an increasingly urgent need to combat climate change. The IEA identifies three potential future scenarios:
Each scenario illustrates different pathways to address global energy demand, improve energy security, and reduce carbon emissions.
Renewable energy emerges as a cornerstone in all scenarios. Solar photovoltaic (PV) and wind power continue to dominate the alternative energy field. By 2030, solar PV is set to become the largest source of electricity generation in the APS and NZE scenarios. Investments in battery storage and grid infrastructure are also growing to curb the issue of intermittent renewable power, addressing concerns over energy reliability.
The decreasing cost of renewable technologies has significantly accelerated the diffusion. However, disparities in renewable adoption persist across regions, influenced by economic conditions, policy support, and access to capital. The report underscores the necessity of equitable global investments to ensure an inclusive energy transition.
Geopolitical tensions, such as the war in Ukraine or in the Middle East and supply chain disruptions, have intensified focus on energy security. The IEA emphasizes diversifying energy supplies to mitigate risks associated with over-reliance on specific fuels or suppliers. Natural gas, a transitional fuel in many scenarios, remains critical but faces challenges due to fluctuating prices and supply uncertainties.
Energy storage technologies, hydrogen, and nuclear energy are highlighted as complementary solutions to enhance resilience in the energy system. The integration of these technologies could fill gaps in energy reliability while supporting decarbonization.
According to the World Energy Outlook, energy demand will nearly double by 2040; therefore, electrification is an essential step in the decarbonization path. Electric vehicles (EVs) and heat pumps are the main drivers of this surge, supported by policies promoting clean mobility and energy efficiency. EV sales have already surpassed expectations, signaling a shift toward sustainable transport systems.
However, increasing electricity demand requires increasing clean generation capacity and modernizing grid systems. In the NZE scenario, global investments in electricity infrastructure must exceed $4 trillion annually by 2030, underscoring the scale of the challenge.
Energy-intensive industries – such as steel, cement, and chemicals – cause a significant share of emissions. The IEA highlights the role of innovation in reducing industrial carbon footprints: carbon capture, utilization, and storage (CCUS) technologies, along with green hydrogen, are presented as game-changers. Scaling these solutions will require supportive policies and substantial investments.
Despite progress, around 675 million people still lack access to electricity, with the majority residing in sub-Saharan Africa: bridging this gap is critical for achieving broader development goals. The report calls for international cooperation and targeted investments in decentralized renewable systems, particularly in underserved regions.
Energy affordability is another concern: high energy prices disproportionately impact vulnerable populations, emphasizing the need for policies that balance climate goals with social equity.
Achieving the goals outlined in the APS and NZE scenarios demands a massive reallocation of capital. Global clean energy investments must more than double from $1.8 trillion today to $4.5 trillion annually by 2030 in the NZE scenario. Mobilizing these funds will require innovative financing mechanisms, stronger public-private partnerships, and a conducive policy environment.
