The report highlights that while the deployment of clean energy, particularly wind and solar, is accelerating, the pace of change is not yet fast enough to significantly reduce reliance on fossil fuels. According to the International Energy Agency’s Stated Policy Scenarios (STEPS), fossil fuels remain the main source of energy.
Although the use of coal, oil and natural gas will peak before 2030 in this scenario, fossil fuels are still expected to account for 58% of the energy mix by 2050. While this is down from 80% in 2023, it is still well below the more ambitious targets set in alternative climate scenarios.
The report from the International Energy Agency (IEA), a Paris-based multinational agency, stated: “While STEPS expects renewable energy to triple, reducing the share of fossil fuel use in total energy demand from 80% in 2023 to 2050. 58%, but this is well below the announced commitment scenario (APS) and the 2050 net zero emissions (NZE) scenario, especially the step change achieved by the latter.”
In the APS, taking into account countries’ formal climate commitments and net zero commitments, fossil fuels are phased out faster, with clean energy meeting 40% of global energy demand by 2035 and nearly 75% by 2050. The most ambitious NZE scenario predicts that clean energy will meet 90% of energy demand by mid-century, with most of the remaining fossil fuel use reduced or offset through technologies such as carbon capture.
The IEA report also predicts that a supply glut of oil and liquefied natural gas (LNG) may occur in the second half of the 2020s, keeping prices low and potentially slowing the green transition.
“The prospect of more abundant or even excess oil and gas supplies depends on the development of geopolitical tensions, which will take us into a period with A very different energy world than we have experienced during the global energy crisis of recent years.”
Birol noted that while this could provide relief to consumers hit by soaring energy prices, it could also reduce the urgency to invest in alternative energy solutions.
In addition, the IEA report also highlights that global electricity demand is growing rapidly, driven by the electrification of transportation, increased energy consumption in data centers, and rising cooling needs. The world’s annual new electricity consumption is expected to be equivalent to Japan’s electricity consumption, with China being the main driver of this growth. Still, investment in clean energy infrastructure has not kept pace.
“Today, 60 cents of every dollar spent on renewable energy is spent on grids and energy storage, highlighting that critical supporting infrastructure is failing to keep pace with the clean energy transition,” the IEA said.
The report further highlights that grid expansion and permitting processes in many regions, including advanced economies, are struggling to accommodate the rapid growth of green energy. In developing countries, high capital costs and policy uncertainty continue to hinder clean energy infrastructure projects. This infrastructure gap is a major factor slowing down the pace of the green transition, leading to continued reliance on fossil fuels.
“Despite the growing momentum for the clean energy transition, the world is still a long way from being on track to achieve net zero goals,” the IEA said.
