Fossil energies will reach peak demand before 2030: IEA

Mexico City. In the following years, the world will begin a new context in the energy market, which is marked by geopolitical risks and despite an abundant supply of multiple fuels and technologies, fossil energies will reach their peak demand before 2030, indicates a report from the International Energy Agency (IEA).

The World Energy Outlook 2024 report indicates that demand for the three fossil fuels (coal, oil and gas) will peak at the end of the decade. However, low-emission sources will generate more than half of the world’s electricity by 2030.

The IEA forecasts oversupply of oil and liquefied natural gas in the second half of this decade, but also oversupply of manufacturing capacity for some key clean energy technologies, particularly solar PV and batteries.

“In the second half of this decade, the prospect of broader – or even surplus – supplies of oil and natural gas, depending on how geopolitical tensions evolve, would lead us to a very different energy world than we have experienced in recent years. during the global energy crisis,” said IEA Executive Director Fatih Birol.

However, Birol considered that this will allow less pressure on energy prices, which will give “some relief to consumers who have been greatly affected by cost spikes.”

The IEA considered that the respite from fuel price pressures can provide policymakers with space to focus on stepping up investments in clean energy transitions and eliminating inefficient fossil fuel subsidies.

“This means that government policies and consumer decisions will have enormous consequences for the future of the energy sector and for addressing climate change,” Birol said.

In the energy transition, which seeks a gradual replacement of fossil sources, “clean energy is entering the energy system at an unprecedented rate, but its implementation is far from being uniform in all technologies and markets.”

The IEA highlighted that the new global energy context is marked not only by the “abundant energy supply”, but also by regional conflicts and geopolitical tensions, which “are highlighting important fragilities in the current global energy system, which makes clear the need for stronger policies and greater investments to accelerate and expand the transition to cleaner and safer technologies.”

“Current geopolitical tensions and fragmentation are creating major risks for both energy security and global action to reduce greenhouse gas emissions,” he said.

The report highlights that electricity use has grown at twice the rate of overall energy demand over the past decade, and two-thirds of the global increase in electricity demand over the past ten years came from China.

“In the history of energy, we have seen the Age of Coal and the Age of Oil, and now we are moving full speed ahead towards the Age of Electricity, which will define the global energy system in the future and will increasingly rely on clean sources of electricity,” Birol said.

The IEA highlighted China for the role it is playing in terms of investments, demand for fossil fuels, electricity consumption, implementation of renewable energy, the electric vehicle market and the manufacturing of clean technology.

“China’s solar expansion is advancing at such a pace that by the early 2030s, in less than ten years, China’s solar power generation alone could exceed the total electricity demand of the United States today.” ”said Birol.

While the IEA estimates that the growth of global electricity demand will accelerate even further in the coming years, it also considered that for clean energy to continue growing at the same rate, much greater investment is necessary in new energy systems, especially in electrical networks and energy storage.

“For every dollar spent on renewable energy, 60 cents are spent on networks and storage, highlighting how essential supporting infrastructure is not keeping pace with clean energy transitions,” he said.

The report noted that many electricity systems are currently vulnerable to the increase in extreme weather events, making it essential to make efforts to strengthen their resilience to crises and digital security.

“In many areas of the world, extreme weather events, intensified by decades of high emissions, already pose profound challenges to the safe and reliable operation of energy systems, including heat waves, droughts, floods and increasingly severe storms,” indicated the IEA.