IEA says today’s energy world defined by “deep disparities”

Deep disparities define today’s energy world, the International Energy Agency says, citing a variety of examples:

  • 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.

IEA’s newly released World Energy Outlook 2019 explores these widening fractures in detail. 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 decision makers pursue today.

The Current Policies Scenario 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 future outlined in this scenario describes a world in 2040 where hundreds of millions of people still go without access to electricity, pollution-related premature deaths remain around today’s elevated levels, and 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.

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.

Energy security also 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.

A sharp pick-up in energy efficiency improvements is the element that does the most to bring the world toward the Sustainable Development Scenario. Right now, efficiency improvements are slowing: the 1.2% rate in 2018 is about 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, with electricity’s share of final consumption overtaking that of oil, today’s leader, by 2040. Wind and solar PV provide almost all the increase in electricity generation.

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