VIENNA, Austria – In launching its World Energy Outlook 2024 (WEO), the IEA stated that “the future of the global energy system is electric.” This follows its assertion that demand for coal, oil and gas will peak by the end of the decade. Furthermore, the IEA’s executive director stated: “In energy history, we’ve witnessed the Age of Coal and the Age of Oil – and we’re now moving at speed into the Age of Electricity, which will define the global energy system.”
The idea that the energy system can be ‘defined’ by one energy source does not correspond with the IEA’s own analysis, or indeed with today’s energy reality in which coal, oil and gas together make up about 80 percent of the global energy mix.
Additionally, reducing the history of energy to a series of succession events, with energy sources constantly locked in a battle of competition and replacement, overlooks the reality that energy sources exist in a mutually dependent relationship. It distorts the past and present, calling into question some of the fundamental assumptions underpinning the IEA’s vision of our energy future.
Regarding the ‘Age of Coal’ being in the past, it is worth noting that the IEA’s Report, ‘Coal Mid-Year Update – July 2024’ stated, “global coal demand grew by 2.6 percent in 2023, to reach a new record of 8.7 billion tonnes”, which is notable for being an all-time high. Furthermore, the IEA report, “Coal 2023 analysis and forecast to 2026”, published in December 2023, stated that “coal remains the largest energy source for electricity generation, steelmaking and cement production.”
The IEA has also implied that the ‘Age of Oil’ is a thing of the past. Yet, as the WEO 2024 states, “[Oil] demand in 2023 surpassed the previous peak set in 2019.” Indeed, in the WEO 2024, the IEA has actually revised upwards its forecasts in the Stated Energy Policies Scenario (STEPS) for the cumulative share of coal, oil and gas in the energy mix in 2030 to 75 percent from 73 percent in WEO 2023, bringing it more into line with OPEC’s assessment.
It is also worth highlighting what other recent IEA reports say about the share of coal, oil and gas in the energy mix. Just last week, on 9 October 2024, the IEA launched its report ‘Renewables 2024’ in which it stated that “almost 80 percent of global energy demand will still be met by fossil fuels” in 2030. In the WEO 2024, the IEA stated that this share will be 75 percent in the Stated Energy Policies Scenario. Even bearing in mind that the policy setup in these two cases might differ somewhat, this is a significant difference.
The ‘Age of Electricity’ that the IEA believes we are ‘moving at speed’ towards faces a series of diverse challenges. For example, mass expansion in electricity requires an exponential increase in demand for critical minerals. However, as the WEO 2024 states, “growth in the availability of critical minerals from the pipeline of announced projects – many of which have significant lead times – is set to be slower than expected growth in manufacturing capacity for a number of critical minerals.”
This growth in electricity demand will also require an unprecedented expansion of grid capacity. As the IEA has written in its report ‘Electricity 2024’, to achieve national energy and climate goals, 80 million kilometres of overhead power lines and underground cables need to be added by 2040. This is almost the same capacity that has been built over the last hundred years, which would need to be accomplished in 15 years.
Additionally, it is worth bearing in mind how essential petroleum-derived products are for both the critical minerals mining sector, namely mining vehicles and equipment powered by diesel, as well as throughout the electricity grid, from products like material for insulating cables and transformer oils, as well as transportation of vital equipment. Furthermore, mass electrification also necessitates large quantities of steel and cement – products that often require coal in the production process.
The IEA has urged policymakers to use its analysis to understand how the energy landscape is changing. It has also urged investors to stop investing in new oil and gas projects. In discussing that landscape, due regard should be given to consequences of underinvestment in the oil and gas industries, especially those related to energy security.
When defining the future of energy systems, the needs of those who lack access to the amenities that so many take for granted should be at the fore. The energy priorities of the 685 million people who still have no access to electricity and the 2.1 billion people who continue to rely on unsafe fuels for cooking differ vastly to those advocating which energy type to choose.
Much ink has been spilled in the past about ‘peaks’ in the energy system that never came to pass. Disproven by realities, such notions are truly past their peak. The reality of the matter is that today the world is consuming more oil, coal, gas and electricity than ever before.
For the just and sustainable energy future that we all aspire to, OPEC continues to advocate for an ‘all-peoples, all-energies and all-technologies’ approach.
