In the coming years, the world is about to enter a new energy market context, which the International Energy Agency (IEA) calls the “Age of Electricity”, marked by a relatively abundant supply of multiple fuels and technologies, including an excess of fossil fuels, together with the increase in the manufacturing capacity of clean energy technologies, which will translate into lower prices.
In its annual report ‘World Energy Outlook 2024’, the agency attached to the Organization for Economic Cooperation and Development (OECD) projects that, based on current policies, low-emission sources will generate more than half of the global electricity before 2030, while demand for coal, oil and gas will peak by the end of the decade.
In this sense, he highlights that clean energy is entering the energy system “at an unprecedented rate”, although he recognizes that its implementation is far from being uniform in all technologies and markets.
Age of electricity
Thus, the IEA points out that electricity consumption has grown at twice the rate of total energy demand over the last decade and predicts that the growth of global electricity demand will accelerate even further in the coming years, adding the equivalent to Japanese demand to global electricity use each year in a scenario based on current policies, which would increase even more rapidly in scenarios that meet national and global targets to achieve net-zero emissions.
“The future of the global energy system is electric, and it is now visible to everyone,” says Fatih Birol, director of the IEA, who is also convinced that, “in the second half of this decade,” the prospect of more abundant supplies , or even surpluses, of oil and natural gas, depending on how geopolitical tensions evolve, will lead to an energy world very different from that of the global energy crisis in recent years.
Birol adds that this “implies downward pressure on prices, which provides some relief to consumers who have been hit hard by price spikes.” In addition, “The respite from fuel price pressures can provide policymakers with space to focus on intensifying investments in clean energy transitions and eliminating inefficient fossil fuel subsidies,” he emphasizes.
“In the history of energy, we have witnessed the ‘Age of Coal’ and the ‘Age of Oil’, and now we are moving at high speed towards the ‘Age of Electricity’, which will define the global energy system in the future. future and will increasingly rely on clean sources of electricity,” according to Birol.
In any case, “Whether it is investment, fossil fuel demand, electricity consumption, renewable energy deployment, the electric vehicle market or clean technology manufacturing, we now find ourselves in a world where almost all energy stories are essentially a China story. Just one example: China’s solar expansion is advancing at such a pace that, by the early 2030s, in less than 10 years, China’s solar power generation alone could exceed the total electricity demand of the United States today.
Investments
For clean energy to grow at the same pace as global electricity demand, the IEA advises investing more in new energy systems, especially in power grids and energy storage.
Today, for every euro spent on renewable energy, 60 cents are spent on networks and storage, highlighting that essential supporting infrastructure is not keeping pace with clean energy transitions.
“Safe decarbonization of the power sector requires investment in grids and storage to increase even faster than clean generation,” the report recommends. Likewise, the study warns that many electricity systems are currently vulnerable to an increase in extreme weather events, making it more important to strengthen their resilience and digital security.
Despite the push to transition to clean energy, the IEA notes that the world is still very far from a trajectory aligned with its net zero emissions goals and estimates that, based on current policies, global CO2 emissions will peak imminently, but the lack of a sharp decline afterwards means the world is on track for a 2.4°C average rise in global temperature by the end of the century, well above the Paris Agreement target. to limit global warming to 1.5°C.
Finally, the report highlights that lack of access to energy remains the most fundamental inequity in the current energy system: 750 million people (mainly in sub-Saharan Africa) do not have access to electricity and more than 2 billion lack fuel clean for cooking.