The World Energy Outlook (WEO) supply modelling relies on estimates of the remaining technically recoverable resource, rather than the (often more widely quoted) numbers for proven reserves. Resource estimates are subject to a considerable degree of uncertainty, as well as the distinction in the analysis between conventional and unconventional resource types.

Overall, the remaining technical recoverable resources of fossil fuels remain almost unchanged from the World Energy Outlook-2020. All fuels are at a level comfortably sufficient to meet the projections of global energy demand growth to 2050 in all scenarios.

The Covid-19 pandemic has slowed exploration and reserve replacement ratios, although there has been an upward revision to Middle East proven reserves by around 50 billion barrels compared with the WEO-2020. Remaining technically recoverable resources of US tight oil (crude plus condensate) in this Outlook are unchanged, totalling more than 200 billion barrels. Natural gas resource numbers remain broadly similar to those of last year. Most of the proven reserves lie in the Middle East and Eurasia.

World coal resources are made up of various types of coal: around 80% is steam and coking coal and the remainder is lignite. Coal resources are more available in parts of the world without substantial gas and oil resources, notably in Asia.

Overall, the gradual depletion of resources (at a pace that varies by scenario) means that operators have to develop more difficult and complex reservoirs. This tends to push up production costs over time, although this effect is offset by the assumed continuous adoption of new, more efficient production technologies and practices.

Major contributors to the levelised cost of electricity (LCOE) include: overnight capital costs; capacity factor that describes the average output over the year relative to the maximum rated capacity (typical values provided); cost of fuel inputs; plus operation and maintenance. Economic lifetime assumptions are 25 years for solar PV, and onshore and offshore wind.

Weighted average cost of capital (WACC) reflects analysis for utility-scale solar PV in the World Energy Outlook 2020, with a range of 3-6%, and for offshore wind from the Offshore Wind Outlook 2019, with a range of 4-7%. Onshore wind was assumed to have the same WACC as utility-scale solar PV. A standard WACC was assumed for nuclear power, coal- and gas-fired power plants (7-8% based on the stage of economic development).

The value-adjusted levelised cost of electricity (VALCOE) incorporates information on both costs and the value provided to the system. Based on the LCOE, estimates of energy, capacity and flexibility value are incorporated to provide a more complete metric of competitiveness for electricity generation technologies.

All electricity generation technology costs for the Net Zero Emissions by 2050 Scenario are from the Net Zero by 2050 report and remain in USD 2019.

Fuel, CO2 and O&M costs reflect the average over the ten years following the indicated date in the projections (and therefore vary by scenario in 2020).

Solar PV and wind costs do not include the cost of energy storage technologies, such as utility-scale batteries.

The capital costs for nuclear power represent the “nth-of-a-kind” costs for new reactor designs, with substantial cost reductions from the first-of-a-kind projects.

• All costs represent fully installed/delivered technologies, not solely the module cost, and includes engineering, procurement and construction costs to install the module.
• Industry costs reflect production costs in the iron and steel sub-sector and differentiate between conventional and innovative production routes. Conventional routes are blast furnace- basic oxygen furnace (BF-BOF) and direct reduced iron-electric arc furnace (DRI-EAF). The innovative routes are Hisarna with CCUS, DRI-EAF with CCUS and hydrogen-based DRI-EAF. Costs for conventional primary steel increase over time reflecting a growing shift toward DRI-EAF in new capacity, which is more capital intensive.
• Vehicle costs reflect production costs, not retail prices, to better reflect the cost declines in production, which move independently of final marketed prices for electric vehicles to customers.
• Utility-scale stationary battery costs reflect the average installed costs of all battery systems rated to provide maximum power output for a four-hour period.
• Electrolyser costs reflect a projected weighted average of installed electrolyser technologies, including inverters. However, inverter costs are not included in the WEO modelling of non-grid connected electrolysers.