Cite report
IEA (2023), World Energy Outlook 2023, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2023, Licence: CC BY 4.0 (report); CC BY NC SA 4.0 (Annex A)
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Pathways for the energy mix
A view with a peak
- 2022 was a turbulent year for global energy markets, with energy prices – notably for natural gas – skyrocketing in Europe and many other parts of the world. The effects of the price shock on consumers were cushioned to a large extent by government interventions. Global energy demand rose 1.3% in line with its recent average.
- Despite geopolitical friction, volatile commodity prices and uncertainty around costs, transformative changes in parts of the global energy system are coming into view. Electric vehicles (EVs) account for around 15% of car sales today, and are on course to reach a share of 40% by 2030 in the Stated Policies Scenario (STEPS). A record 220 gigawatts (GW) of solar capacity was added in 2022, and deployment levels are projected to more than double, while heat pumps more than double their share of heating equipment sales in the STEPS by 2030. The planned boost in the manufacturing capacity of these clean energy technologies, if fully realised, appears able to meet many of the deployment milestones in the Announced Pledges Scenario (APS) and, in the case of solar and batteries, also to provide what is required in the Net Zero Emissions by 2050 (NZE) Scenario.
Transformative changes in parts of the global energy system are coming into view
The close historic relationship between global economic growth and fossil fuel demand is being loosened by the emergence of a new clean energy economy... Based on today's policy settings, each of the three fossil fuels see a peak before 2030.
- Accelerated scale up of the clean energy transition means there is very little runway left for growth in fossil fuels: for the first time, demand for oil, natural gas and coal each peak in the three World Energy Outlook‑2023 scenarios before 2030. The share of fossil fuels in primary energy demand declines from 80% over the last two decades to 73% in the STEPS by 2030, 69% in the APS and 62% in the NZE Scenario.
- Electricity supply becomes progressively cleaner as low-emissions sources increase faster than demand in each scenario. Solar PV is the clear frontrunner, but wind also scales up despite near-term supply chain challenges, while nuclear power, other renewables and low-emissions fuels all make progress too.
Solar PV and wind are reshaping electricity supply
Solar PV continues to gain momentum and grows at an astonishing rate in all our scenarios, complemented by robust growth for onshore and offshore wind. Scaling up power system flexibility is critical to integrate more solar PV and wind and accelerate transitions away from coal and natural gas.
- Electrification of mobility and heat accelerates in each scenario, although not at the same rate as power sector decarbonisation. Energy efficiency plays a key role in all sectors in determining total final consumption. In the STEPS, consumption increases by an annual average of 0.7% through to 2050; in the APS, it peaks in the late 2020s and then slowly starts to decline; in the NZE Scenario, it falls 1% per year from today.
Electrification is gathering pace
The share of electricity in total final consumption goes from 20% today to 41% in the APS and over 50% in the NZE Scenario by 2050. Electrification is a key contributor to reductions in fossil fuel demand, alongside efficiency improvements and greater use of low-emissions fuels.
- Hydrogen and carbon capture, utilisation and storage (CCUS) are making much-needed progress. The pipeline of projects shows that more than 400 GW of electrolysis for hydrogen and over 400 million tonnes of CO2 capture capacity are vying to be operational by 2030. This could potentially meet the milestones of the APS if all planned projects go ahead, but cost inflation and supply chain bottlenecks could hamper progress.