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What actually is the IEA?
The IEA was founded in 1974 in the wake of the global oil crisis in order to facilitate coordinated measures to safeguard the oil supply in the event of further crises. Today, it is regarded as one of the key global energy organisations. As an autonomous institution within the OECD (Organisation for Economic Co-operation and Development), it acts as a voice for the energy-consuming nations, including Germany, which has been an IEA member since 1974. Today, the IEA brings together 31 OECD countries, 13 association countries and four accession countries.
The issues of energy security and economic growth are still at the forefront, as are environmental policy and climate action. A stated aim of the work done by the IEA is to ensure the availability of reliable, affordable and clean energy for everyone in its Member States.
Sharing international experience in almost all areas of energy policy
The focus of the IEA’s work has evolved and broadened over the last few decades towards sustainable energy policy, the drafting of market reforms, the development of innovative energy technologies and the increasing, proactive involvement of emerging economies in energy policy issues.
The IEA has developed into a central platform for sharing experience on virtually all aspects of energy policy. A key part of this is how renewable energy can be developed and integrated into the various energy systems. Regular country reviews setting out policy recommendations, as well as the annual World Energy Outlook (WEO), are highly respected sources for the formulation of national energy policies around the globe.
The World Energy Outlook flags up development scenarios up to 2050
The latest WEO works from the latest data and market developments to analyse future development scenarios on the energy markets up to 2050. In order to make the best possible forecasts, the report examines different developments based upon three different scenarios.
The Stated Policies Scenario (STEPS) depicts a development path on the basis of the current policy framework. The Announced Pledges Scenario (APS) is based on the assumption that all the ambitious targets set by governments – including their long-term climate neutrality and energy security goals – are attained fully and on schedule. The Net Zero Emissions by 2050 Scenario (NZE) sketches out a path to limit the average global rise in temperatures to 1.5C, whilst making access generally available to modern energy sources around the world.
Three structural changes dominate all the WEO scenarios
Three structural changes characterise the findings for all the WEO scenarios in 2023: the extraordinary rise in clean energy technologies, combined with a slowing and reorientation of Chinese economic growth (particularly towards electric vehicles and solar photovoltaics), are changing the orientation of global energy trends.
For the first time, the IEA itself is forecasting that, on the basis of the current policy environment, without additional policies, the zenith of global demand for all fossil fuels will be reached during this decade. The proportion of fossil fuel in the world’s energy supply will drop from 80% today to 73% in 2030 in this status quo scenario. The report expects to see the peak of energy-related carbon emissions in 2025.
A wave of LNG export projects (mainly from the U.S. and Qatar) will boost the supply of gas by around 45% up to 2030 – whilst global gas demand will rise much more slowly. This means that Russia’s influence on the international gas market could fall significantly.
2023 will be another year of record temperatures around the world. It concludes that the path to the 1.5C target is becoming narrower, but is still achievable. The technological and political means to attain the climate targets exist.
Direct impact on the international energy scene
As benchmarks for the success of the COP28 global climate conference, the WEO is looking primarily to the rapid global roll-out of renewable energy and increased energy efficiency. At the same time, the methane emissions and demand for fossil fuel must fall significantly, and emerging and developing economies must continue to receive even more of the support they need during the transition.
Reports like the WEO have a direct impact on the international energy scene. For example, G7 and G20 countries announced common targets for the expansion of renewable energy for the first time this year, saying that they intended to triple their renewable energy capacities by 2030. These targets are based on figures and statistics provided not least by the IEA during the negotiations.