Rapid and widespread changes across all parts of the energy system are needed to put the world on a path to a secure and sustainable energy future
13 November 2019
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 Deep disparities define today’s energy world. The dissonance
between well-supplied oil markets and growing geopolitical tensions and
uncertainties. The gap between the ever-higher amounts of greenhouse gas
emissions being produced and the insufficiency of stated policies to
curb those emissions in line with international climate targets. The gap
between the promise of energy for all and the lack of electricity
access for 850 million people around the world.
The World Energy Outlook 2019,
the International Energy Agency’s flagship publication, explores these
widening fractures in detail. It explains the impact of today’s
decisions on tomorrow’s energy systems, and describes a pathway that
enables the world to meet climate, energy access and air quality goals
while maintaining a strong focus on the reliability and affordability of
energy for a growing global population.
As ever, decisions made by governments remain critical for the
future of the energy system. This is evident in the divergences between WEO
scenarios that map out different routes the world could follow over the
coming decades, depending on the policies, investments, technologies
and other choices that decision makers pursue today. Together, these
scenarios seek to address a fundamental issue – how to get from where we
are now to where we want to go.
The path the world is on right now is shown by the Current Policies Scenario,
which provides a baseline picture of how global energy systems would
evolve if governments make no changes to their existing policies. In
this scenario, energy demand rises by 1.3% a year to 2040, resulting in
strains across all aspects of energy markets and a continued strong
upward march in energy-related emissions.
The Stated Policies Scenario, formerly known as
the New Policies Scenario, incorporates today’s policy intentions and
targets in addition to existing measures. The aim is to hold up a mirror
to today’s plans and illustrate their consequences. The future outlined
in this scenario is still well off track from the aim of a secure and
sustainable energy future. It describes a world in 2040 where hundreds
of millions of people still go without access to electricity, where
pollution-related premature deaths remain around today’s elevated
levels, and where CO2 emissions would lock in severe impacts from
climate change.
The Sustainable Development Scenario indicates
what needs to be done differently to fully achieve climate and other
energy goals that policy makers around the world have set themselves.
Achieving this scenario – a path fully aligned with the Paris Agreement
aim of holding the rise in global temperatures to well below 2°C and
pursuing efforts to limit it to 1.5°C – requires rapid and widespread
changes across all parts of the energy system. Sharp emission cuts are
achieved thanks to multiple fuels and technologies providing efficient
and cost-effective energy services for all.
“What comes through with crystal clarity in this year’s World Energy Outlook
is there is no single or simple solution to transforming global energy
systems,” said Dr Fatih Birol, the IEA’s Executive Director. “Many
technologies and fuels have a part to play across all sectors of the
economy. For this to happen, we need strong leadership from policy
makers, as governments hold the clearest responsibility to act and have
the greatest scope to shape the future.”
In the Stated Policies Scenario, energy demand increases by 1% per
year to 2040. Low-carbon sources, led by solar PV, supply more than half
of this growth, and natural gas accounts for another third. Oil demand
flattens out in the 2030s, and coal use edges lower. Some parts of the
energy sector, led by electricity, undergo rapid transformations. Some
countries, notably those with “net zero” aspirations, go far in
reshaping all aspects of their supply and consumption.
However, the momentum behind clean energy is insufficient to offset
the effects of an expanding global economy and growing population. The
rise in emissions slows but does not peak before 2040.
Shale output from the United States is set to stay higher for
longer than previously projected, reshaping global markets, trade flows
and security. In the Stated Policies Scenario, annual US production
growth slows from the breakneck pace seen in recent years, but the
United States still accounts for 85% of the increase in global oil
production to 2030, and for 30% of the increase in gas. By 2025, total
US shale output (oil and gas) overtakes total oil and gas production
from Russia.
“The shale revolution highlights that rapid change in the energy
system is possible when an initial push to develop new technologies is
complemented by strong market incentives and large-scale investment,”
said Dr Birol. “The effects have been striking, with US shale now acting
as a strong counterweight to efforts to manage oil markets.”
The higher US output pushes down the share of OPEC members and
Russia in total oil production, which drops to 47% in 2030, from 55% in
the mid-2000s. But whichever pathway the energy system follows, the
world is set to rely heavily on oil supply from the Middle East for
years to come.
Alongside the immense task of putting emissions on a sustainable
trajectory, energy security remains paramount for governments around the
globe. Traditional risks have not gone away, and new hazards such as
cybersecurity and extreme weather require constant vigilance. Meanwhile,
the continued transformation of the electricity sector requires policy
makers to move fast to keep pace with technological change and the
rising need for the flexible operation of power systems.
“The world urgently needs to put a laser-like focus on bringing down global emissions. This calls for a grand coalition
encompassing governments, investors, companies and everyone else who is
committed to tackling climate change,” said Dr Birol. “Our Sustainable
Development Scenario is tailor-made to help guide the members of such a
coalition in their efforts to address the massive climate challenge that
faces us all.”
A sharp pick-up in energy efficiency improvements is the element
that does the most to bring the world towards the Sustainable
Development Scenario. Right now, efficiency improvements are slowing:
the 1.2% rate in 2018 is around half the average seen since 2010 and
remains far below the 3% rate that would be needed.
Electricity is one of the few energy sources that sees rising
consumption over the next two decades in the Sustainable Development
Scenario. Electricity’s share of final consumption overtakes that of
oil, today’s leader, by 2040. Wind and solar PV provide almost all the
increase in electricity generation.
Putting electricity systems on a sustainable path will require more
than just adding more renewables. The world also needs to focus on the
emissions that are “locked in” to existing systems. Over the past 20
years, Asia has accounted for 90% of all coal-fired capacity built
worldwide, and these plants potentially have long operational lifetimes
ahead of them. This year’s WEO considers three options to bring
down emissions from the existing global coal fleet: to retrofit plants
with carbon capture, utilisation and storage or biomass co-firing
equipment; to repurpose them to focus on providing system adequacy and
flexibility; or to retire them earlier.
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About the IEA: The International
Energy Agency, the global energy authority, was founded in 1974 to help
its member countries co-ordinate a collective response to major oil
supply disruptions. Its mission has evolved and rests today on three
main pillars: working to ensure global energy security; expanding energy
cooperation and dialogue around the world; and promoting an
environmentally sustainable energy future.
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