Scenarios in the World Energy Outlook 2025

The World Energy Outlook has long been recognised as the gold standard of long-term energy modelling and this year’s edition will be published on 12 November.

Since it was published as an annual report in 1998, the approach of the World Energy Outlook has never been to provide a single vision of the future but rather to view the world through different lenses or scenarios. All scenarios have the same starting point based on the latest data for energy supply and demand, markets, technology costs and policies, as well as the same assumptions for future population and economic growth. However, depending on the scenario, different assumptions on policies, end goals or the ability to overcome technological barriers can mean very different energy futures. This approach allows for a comparison of the effects and implications of different energy choices against a common backdrop.

Every year, we carefully review the scenarios included in the WEO to make sure they remain as useful and relevant as possible to policymakers and other stakeholders. This year is no different, and the WEO-2025 will see some changes from the past several years in the suite of energy futures it considers.

None of the scenarios in the WEO are a forecast. A framework that includes multiple scenarios allows us to explore the consequences of different policy choices for the key policy priorities of energy security, affordability and sustainability.

The WEO-2025 will include two exploratory scenarios: the Current Policies Scenario (CPS) and the Stated Policies Scenario (STEPS). Neither of these scenarios target any particular outcome. They do not assume that aspirational objectives – such as those in the Paris Agreement – are met. The CPS was a regular feature of the International Energy Agency’s suite of scenarios until the WEO-2020, when it was discontinued amid turmoil in energy markets and rapid changes in the policy landscape during the Covid‑19 pandemic. Now that the world has passed through the pandemic and the global energy crisis, there is merit in revisiting the CPS.

The WEO-2025 will also include two normative scenarios that map out ways to achieve specific outcomes: the Net Zero Emissions by 2050 (NZE) Scenario, and a new scenario called the Accelerating Clean Cooking and Electricity Services Scenario (ACCESS). The ACCESS scenario builds on the best examples of rapid historical progress to develop a country-by-country pathway to universal access to modern energy services.

The WEO this year will not include the Announced Pledges Scenario (APS). The APS has been included in the WEO since 2021 and models a future for the energy system in which all national energy and climate targets – such as countries’ nationally determined contributions – are achieved in full and on time. The intention for WEO-2025 had been to assess the new round of NDCs that were due this year, generally covering the period 2031-35. However, many countries are yet to announce or update their targets, and an update to the APS would give only a partial picture of the implications for energy and emissions. These will be reflected in future analysis.

In this commentary, we provide more information on the WEO-2025’s scenarios, while focusing on the differences between the two exploratory scenarios – the CPS and STEPS – as a way of providing some context for the upcoming WEO.

Understanding a scenario requires transparency on the underlying assumptions, in particular the rates of economic and population growth, the way that technology costs evolve, the assumptions on policies and other key variables. The assumptions included in each scenario and how these differ will, as always, be published on our website and in the WEO itself, alongside detailed information on the workings of the model that we use to generate the projections.

Every country has a core set of laws and regulations that govern its energy sector. These laws typically cover, for example, the structure and functioning of the power sector; the way that companies can explore for fossil fuels and energy-related minerals and produce them; how energy prices and tariffs are set; and which taxes and subsidies are applied. In many cases, there is specific legislation that sets out how renewable energy enters the system – via feed-in tariffs, auctions or investment incentives – as well as how energy efficiency is treated – via building codes, appliance standards or industrial efficiency requirements. Legislation in other sectors – in transport and industrial policies, for example – can shape the evolution of the energy sector. Environmental legislation has strong implications for energy, including pollution controls, carbon markets and taxes. The CPS looks at the evolution of the energy sector based on a detailed reading of this existing legislation.

The CPS might seem like a “business as usual” scenario, but this terminology can be misleading in an energy system where new technologies are already being deployed at scale, underpinned by robust economics and mature, existing policy frameworks. In these areas, “business as usual” would imply continuing the current process of change and, in some cases, accelerating it. In the CPS, however, potential constraints slow the uptake of these new technologies, whether due to insufficient infrastructure, grid integration costs, a lack of institutional capacity or financing, or the absence of continued policy support. It therefore tends to project slower adoption of new technologies than has been seen in recent years, or than is seen in the STEPS.

In addition to measures that are already in place, governments also signal their energy policy intentions before locking them in via legislation (at which point they are included in the CPS). Many governments produce strategy documents that indicate what initiatives they plan to take during their term in office. These may require new or amended legislation, which needs to work its way through parliament. They may involve other elements of rulemaking, to strengthen or weaken efficiency standards for various products, for example, or to introduce or withdraw support schemes for various energy technologies. These legislative, budget and regulatory processes all take time, but the intentions are clearly visible in advance of their formal adoption.

Many countries – especially developing economies – also outline energy-related goals in broader multiyear development plans. These can be energy-specific (such as power sector development plans that include targets for the future generation mix) or anchored in broader economic or poverty reduction strategies.

All these additional considerations feed into the STEPS. However, we do not assume that all policy intentions seamlessly become reality – their prospects are subject to an assessment of relevant market, infrastructure and financial constraints. We do not automatically assume that countries’ nationally determined contributions are achieved nor do we do so for more aspirational goals, such as those of the Paris Agreement.

Policies are a critical differentiating factor between the CPS and STEPS, yet they are sometimes imprecise and can also be translated in different ways and lead to different outcomes.

For example, many existing policies are time-bound or target specific years. In the CPS, these policies continue after their end-date but are assumed not to be strengthened. The STEPS assumes they continue and are strengthened in line with the previous ambition. For example, vehicle efficiency standards in Japan aim to improve the efficiency of new cars sold to around 4 litres per 100 km in 2030 (down from 5 litres per 100 km in 2016). This is achieved in both the STEPS and CPS. After 2030, the CPS assumes that new cars sold in Japan will continue to have an efficiency of around 4 litres per 100 km, while the STEPS assumes that the efficiency of new cars sold will continue to improve (reaching around 3 litres per 100 km in 2050).

Policies profoundly shape outcomes, but they do not determine them. They can be overachieved, underachieved, repealed or strengthened. The extent to which they are successful depends on many things, including their legal form, their level of specificity, the incentives on offer, and the way they are implemented.

There are many factors in a complex energy system that affect the direction of travel, including macroeconomic and financial conditions, investor strategies, innovation and technology progress, consumer preferences, and broader geopolitical factors. Capturing all this complexity is a daunting task for any forward-looking Outlook, but these factors all feature in the design and presentation of our scenarios.

In general, the CPS assumes slow progress in overcoming technology challenges and barriers while the STEPS assumes that a greater speed of change is possible. These additional considerations have always been a feature of the CPS and STEPS published in previous editions of the WEO.

Rapid progress on energy access has been made in recent decades in some regions and countries. Still, billions of people in around 100 countries remain without access to basic modern energy services, and the number of people without access to energy in sub-Saharan Africa has risen since 2010.

The new ACCESS scenario included in the WEO-2025 is a roadmap to achieve universal access to electricity by 2035 and clean cooking by 2040. It is grounded in practical constraints and solutions, examining what historical rates of progress have been achieved in the past – and then prioritises cost-effective, proven means to replicate those successes. It explores all relevant fuels and technologies required to achieve universal access as well as the infrastructure, policies and financing needed to scale them up.

In 2021, the IEA was asked by the COP26 Presidency to give an indication of what achieving the 1.5 °C goal would mean for the energy sector. The NZE Scenario, which responded to this request, represents a global pathway for the energy sector towards the goal of limiting warming to 1.5 °C. It describes a pathway to reducing global energy‑related carbon dioxide (CO2) emissions to net zero by 2050, alongside achieving goals on universal energy access and large reductions in air pollution. It does this while recognising that there are various paths to reaching these objectives and that each country will have its own route.

The NZE Scenario has been updated in the WEO every year since 2021. Because of the delay in reducing emissions, each successive update factors in higher cumulative emissions and higher peak warming. In the WEO-2024 version of the NZE Scenario, peak warming reached just below 1.6 °C around 2040 before subsequently declining to below 1.5 °C by 2100.

The level of long-term warming today stands at around 1.4 °C. Based on the latest trends of technology deployment, sector by sector – including slower improvements in efficiency and electrification of some end-uses, and lower deployment of hydrogen and carbon capture, utilisation and storage (CCUS) – the nearer-term emissions trajectory for the NZE Scenario in the WEO-2025 has again been revised upwards. At the same time, the goal of net zero emissions by 2050 is retained in the scenario design.

As countries prepare to consider the next round of nationally determined contributions under the Paris Agreement, the updated NZE Scenario pathway provides an overview of what would it take to keep alive the possibility of limiting the rise in global average temperatures to 1.5 °C, taking into account recent data on energy, technology, investment and emissions.