The world is moving rapidly towards a cleaner energy future, with low-emission sources like solar and wind expected to generate more than half of the electricity by 2030, according to the International Energy Agency.
“We are moving at speed into the Age of Electricity,” IEA executive director Fatih Birol said at the launch of World Energy Outlook 2024.
“The future of the global energy system will increasingly be powered by clean sources of electricity,” he said.
While the annual IEA report shows a shift towards cleaner energy, it warns that the global demand for electricity is rising rapidly and more needs to be done to keep up.
The skyrocketing electricity demand is driven by increasing use of electric vehicles, cooling systems, and data centres needed for artificial intelligence.
China, responsible for two-thirds of the increase in global electricity demand over the past decade, is rapidly switching to electric vehicles. The switch is putting major oil and gas producers “in a bind”, according to the IEA report.
China already accounts for half the world’s electric cars on the road. By 2030, it’s projected that 70 per cent of all new car sales in the country would be electric.
Geopolitical risks, like Russia’s invasion of Ukraine and Israel’s war in Gaza, are also disrupting the traditional energy markets such as oil and gas at a time when the world’s energy needs are increasing faster than ever.
The IEA projects that the world will continue adding the equivalent of Japan’s electricity consumption per year. This rapid demand is driving the expansion of renewable energy but also creating new challenges.
While renewable energy is entering the system at an unprecedented rate, investments in infrastructure such as grids and storage are lagging. For every dollar spent on renewable power, only 60 cents go towards the infrastructure needed to support it.
This year, several countries in Europe have seen electricity prices dropping to negative for a record number of hours, driven by a rapid rise in renewables but slower progress in the storage infrastructure needed for it.
The IEA stresses that this ratio must be improved to ensure secure and reliable operations of energy systems, especially as extreme weather events become more frequent.
“As we move further into the age of electricity, solar and batteries are stealing the show,” said Dave Jones, global insights programme director at Ember.
“However, electricity demand is insatiable. Global coal generation is falling slower than expected, meaning CO2 emissions are not dropping fast enough. While renewables are booming, we need energy to be used more efficiently if we want to see a significant fall in emissions,” he said.
Despite the progress, the world is far from reaching its climate goals. Carbon dioxide emissions, responsible for driving the climate crisis, are expected to peak within this decade. The pace of reduction in the emissions isn’t fast enough, however, and temperatures are on track to rise by 2.4C by the end of the century, well above the 1.5C target set by the Paris Agreement.
The IEA projects that India will add nearly two million barrels per day of oil to its demand by 2035, potentially offering a lifeline to oil producers looking to offset declining growth in other regions.
The energy agency warned ″the world is still a long way from a trajectory aligned with its net zero goals″ because rather than going up for the next several years, global climate pollution must drop each year to preserve a good chance of keeping a climate similar to the one the Earth has now.
“There is a narrow but achievable pathway to 1.5C, but governments must act now,” Tracy Carty, global climate politics expert at Greenpeace, said.
“The steps we take in the next two years will decide how much climate-driven destruction we can avoid over the next two decades.”
Last year, much of the world pledged to move away from fossil fuels at the 28th UN climate summit, also called Cop28. Many countries are winding up coal power plants, with the UK shutting down its last such plant last month, but the use of oil and gas remains a sticking point.
Experts say to facilitate faster transition to renewables, more climate finance is needed, something that’s going to be discussed next month at the UN Cop29 summit in Baku.
“Rich governments need to commit to a new climate finance goal at Cop29 to help bridge the growing gap in funding,” Ms Carty said. “The fossil fuel industry and big polluters should be made to pay their fair share.”
