The world is on the cusp of a significant shift toward electricity as the dominant source of energy, driven by a surge in the production of batteries and solar panels, according to the International Energy Agency’s (IEA) annual World Energy Outlook report released Wednesday.
However, the report also highlights that this transition may not be enough to limit global warming to the target set by the Paris Agreement.
“We’re now moving at speed into the Age of Electricity,” said IEA Executive Director Fatih Birol in a statement.
He emphasized that clean energy sources, such as solar and wind, will increasingly power the global energy system. The report projects that demand for fossil fuels, including oil and gas, will peak before the end of the decade, but cautions that the world remains far from capping temperature increases to 1.5 degrees Celsius, as required to avoid the worst impacts of climate change.
Despite the rapid growth in clean energy production, global emissions continue to rise due to increasing energy demand, particularly in emerging economies. The IEA estimates that global warming is currently on track to reach 2.4 degrees Celsius by the end of the century, overshooting the goals of the Paris Agreement.
China, the world’s largest emitter of greenhouse gases, plays a key role in both the problem and the solution. As a leading manufacturer of solar panels and electric vehicles (EVs), China is rapidly expanding its clean energy infrastructure. Electric vehicles now make up 40% of new car sales in the country, a figure expected to rise to 70% by 2030. However, China’s continued demand for oil and gas also complicates global efforts to reduce reliance on fossil fuels.
The IEA report also signals a potential surplus of oil and natural gas in the coming years, driven by slower demand growth in transportation due to the widespread adoption of EVs. This surplus could lead to lower prices for fossil fuels and potentially create an opportunity for countries to invest more in green energy technologies.
While clean energy investments are expected to nearly double fossil fuel investments in 2024, the report warns that this is not enough to meet the growing demand for electricity, particularly in industries like data centers and electric mobility. The IEA calls for accelerated investment in clean energy to meet future demand and reduce carbon emissions.
The Associated Press, Reuters, and Axios contributed to this report.
