Outlook for Global Energy Demand according to the International Energy Agency (IEA)
As every year, the International Energy Agency (IEA), based in Vienna, has published its annual report « World Energy Outlook » for the year 2022. It is a report closely followed by decision-makers in the energy sector. energy around the world. It presents the medium and long-term production and consumption scenarios of the various forms of energy.
The 2022 World Energy Outlook (“WEO”) takes on particular significance in the context of Russia’s invasion of Ukraine in February 2022, which plunged global energy markets into turmoil and fueled inflationary pressures and slowed economic growth.
Key takeaways from the World Energy Outlook 2022
The global energy crisis according to the International Energy Agency
- The world is in the midst of a global energy crisis of unprecedented depth and complexity.
- Europe is at the center of this crisis, but it has major implications for markets, policies and economies around the world.
- How is the Russian invasion of Ukraine reshaping the energy world according to the International Energy Agency?
- Energy markets: High and volatile energy prices are hurting households and businesses, changing fuel choices and delaying progress towards universal energy access.
- Energy policy: Short-term responses have focused on securing available supply and protecting consumers, but many governments in the US, EU and elsewhere have adopted new policies that provide a major boost investments in clean energy and efficiency.
- Energy trade: European sanctions on coal and oil imports and Gazprom’s decisions to cut off gas supplies are causing a profound reshuffling of trade flows around the world.
- Economic impacts: high fossil fuel prices fuel inflationary pressures; the combination of falling real incomes and rising prices creates an imminent risk of a global recession.
- The report says that while Russia’s invasion of Ukraine caused a global energy crisis and is seen as a setback in the fight against climate change, it may also be an opportunity because of subsequent government responses, such as the American Inflation Reduction Act. that promotes clean energy, and the ambitious clean energy goals of India and China.
The outlook for energy demand according to the scenarios of the International Energy Agency
The outlook for energy demand is explored through three scenarios:
- NZE (Net Zero Emissions) Scenario: The WEO’s Net Zero Emissions by 2050 (NZE) Scenario defines what needs to be done to move beyond announced promises towards a trajectory that would reach net zero emissions globally by 2050.
- Scenario STEPS (Stated Policies): represents a path based on the energy and climate measures that governments have actually put in place to date, as well as on specific policy initiatives under development;
- APS (Announced Pledges) Scenario: This is an Announced Pledges Scenario (APS), which charts a path in which the net-zero emissions commitments announced by governments so far are implemented on time and on schedule. entirety.
- Natural Gas: High energy prices, heightened energy security concerns and tightening climate policies are ending a decade of rapid natural gas growth; its annual demand growth slows to 0.4% by 2030 in the STEP scenario, from 2.3% from 2010 to 2019.
- Coal: There is a temporary increase in demand in some regions of the energy and industrial sectors in response to the increase in natural gas prices, but efforts to reduce emissions have quickly caused coal to fall back , ending the decade with demand 9% lower than that of coal.
- Renewable energies: notably solar photovoltaic and wind, which have gained the most ground of all energy sources this decade, accounting for 43% of the world’s electricity production in 2030, compared to 28% today .
- Oil: Oil demand grows 0.8% per year through 2030, but peaks shortly thereafter at around 103 million barrels per day as electric vehicles (EVs) and efficiency gains undermine its prospects.
Read the detailed report of « World Energy Outlook »
