Cite report
IEA (2023), World Energy Outlook 2023, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2023, Licence: CC BY 4.0 (report); CC BY NC SA 4.0 (Annex A)
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Secure and people-centred energy transitions
Critical ingredients for success
- Secure energy transitions depend on keeping the global average surface temperature rise below 1.5 °C. The temperature today is around 1.2 °C above pre‑industrial levels, and global emissions have not yet peaked. In the Stated Policies Scenario (STEPS), the temperature rises to 1.9 °C in 2050 and 2.4 °C in 2100. This is 0.1 °C lower than projected in the STEPS from the World Energy Outlook-2022, but far above the levels of the Paris Agreement. In the Announced Pledges Scenario (APS), the temperature rise in 2100 is 1.7 °C; in the Net Zero Emissions by 2050 (NZE) Scenario, the temperature peaks in mid-century and falls to around 1.4 °C in 2100.
CO2 emissions and 2100 temperature rise
All further temperature rises carry risks: those in the STEPS would risk particularly extreme consequences for global ecosystems and human well-being.
- Energy transitions do not bring an end to traditional risks to energy security. Global oil and gas trade becomes increasingly focussed on flows between the Middle East and Asia, exposing importers to a variety of risks. Electricity faces rising short-term flexibility needs which can be met through demand response and storage, and rising seasonal flexibility needs which can be met by hydropower and thermal sources, all enabled by expanding and modernising grids.
- Energy transitions also bring new risks to energy security. One set of risks relate to supply chains for clean energy technologies and for critical minerals. Supply chains for both are highly geographically concentrated. Diversified investment to meet growing demand can help, but international partnerships will also be necessary.
Clean technology supply chain geography in 2030
- Another set of risks relate to the people-centred aspects of energy transitions, including what they mean for access, affordability and employment. The number of people without access to clean cooking (2.3 billion) and electricity (760 million) today fall by around 15% to 2030 in the STEPS, by two-thirds in the APS, and to zero in the NZE Scenario in response to measures to improve access. Household energy bills in advanced economies fall by nearly 20% in the STEPS to 2030, as fossil fuel use drops and energy efficiency gains accrue. In emerging market and developing economies, fossil fuel subsidies need to be phased out carefully to limit impacts on household budgets. Estimates of new jobs created range from 7 million in the STEPS to 30 million in the NZE Scenario: these increases outweigh losses in fossil fuel and related industries but will often be in new locations and require new skills.
Access to modern energy
Transitions depend on placing people at the centre of discussions. Particular help is needed for those that currently lack access to modern energy services.
- Prospects for secure and people-centred energy transitions depend on securing high levels of investment. Energy investment levels show encouraging trends for renewables and electric vehicles, but there are large energy investment gaps in emerging market and developing economies other than China, and investment in most end-use areas is lagging in all regions. The expected level of oil and gas investment in 2023 is similar to the amounts required in the STEPS in 2030 and far above the levels needed in the APS and NZE Scenario, implying that the oil and gas industry does not expect there to be any significant near-term reduction in demand.