Transitions are getting competitive

  • Conflict and uncertainty provide an inauspicious backdrop to the new World Energy Outlook. Following Russia’s invasion of Ukraine, instability in the Middle East could lead to further disruption to energy markets and prices. This underscores once again the frailties of the fossil fuel age, and the benefits for energy security as well as for emissions of shifting to a more sustainable energy system.
  • Clean energy projects are facing headwinds in some markets from cost inflation, supply chain bottlenecks and higher borrowing costs. But clean energy is the most dynamic aspect of global energy investment. How fast it grows in the coming decades in response to policy and market stimuli is key to explain the differences in trajectories and outcomes across our three main scenarios. In all scenarios, the momentum behind the clean energy economy is enough to produce a peak in demand for coal, oil and natural gas this decade, although the rates of post-peak decline vary widely.
  • In the Stated Policies Scenario, average annual growth rate of 0.7% in total energy demand to 2030 is around half the rate of energy demand growth of the last decade. Demand continues to increase through to 2050. In the Announced Pledges Scenario, total energy demand flattens, thanks to improved efficiency and the inherent efficiency advantages of technologies powered by electricity – such as electric vehicles and heat pumps – over fossil fuel-based alternatives. In the Net Zero Emissions by 2050 Scenario, electrification and efficiency gains proceed even faster, leading to a decline in primary energy of 1.2% per year to 2030.
  • Our analysis explores some key uncertainties, notably regarding the pace of China’s economic growth and the possibilities for more rapid solar PV deployment opened by a massive planned expansion in manufacturing capacity (led by China). We highlight the implications of a huge increase in the capacity to export liquefied natural gas starting in the middle of this decade, led by the United States and Qatar. We examine how any deterioration in geopolitical tensions would undermine both the prospects for energy security and for rapid, affordable transitions.
  • Extreme volatility in energy markets during the global energy crisis has highlighted the importance of affordable, reliable and resilient supply, especially in price-sensitive developing economies that see the largest increase in demand for energy services. Energy transitions rely on electrification and technologies like wind, solar PV and batteries, and push electricity security and diversified supply for clean technologies and critical minerals up the policy agenda. Emerging market and developing economies account for almost 80% of the global growth in electricity demand in the Stated Policies Scenario, and for over two-thirds in the other scenarios.
Chart showing milestones in solar PV deployment

Solar PV is lighting a path forward for clean energy transitions

Solar manufacturing growth is outpacing the rise of solar PV deployment, creating some risks of imbalances but huge opportunities for the world to accelerate energy transitions.

A wave of new LNG export projects is set to overturn gas markets

More than 250 bcm per year of new liquefaction capacity is set to come online by 2030. The United States and Qatar account for 60% of this.

Chart showing capacity additions of LNG by region from 2011-2030 Chart showing capacity additions of LNG by region from 2011-2030

As China’s demand growth slows, clean energy pushes fossil fuels into decline

Chart showing annual change in energy demand for fossil fuels and clean energy in China through 2050 Chart showing annual change in energy demand for fossil fuels and clean energy in China through 2050