The IEA World Energy Outlook 2022
Browse this blog post
Related news and insights
Publications: 08 February 2024
Publications: 06 February 2024
News: 05 February 2024
News: 26 January 2024
The International Energy Agency publishes its World Energy Outlook (WEO) every autumn, and has been doing so since 1977. This year, the WEO report has been much anticipated in light of Russia’s invasion of Ukraine having far-reaching impacts on the global energy markets. The WEO noticeably highlights the unequal impact of this crisis across countries and on individuals, with 75 million people who recently gained access to electricity being likely to lose the ability to pay for it.
“The world has not been investing enough in energy in recent years, a fact that left the energy system much more vulnerable to the sort of shocks seen in 2022.”
IEA World Energy Outlook 2021
The WEO explores a range of different future scenarios, against the backdrop of the global energy crisis, with 2021 witnessing the largest ever rise in emissions after the global economy rebounded from the Covid-19 pandemic.
- The Stated Policies Scenario (STEPS) shows the trajectory implied by today’s policies. Under the STEPS, energy-related CO2 emissions would put the world on a trajectory for a 2.5 °C rise in global average temperatures by 2100.
- The Announced Pledges Scenario (APS) assumes that all aspirational targets announced by governments are met on time and in full, including their long‐term net zero and energy access goals. APS would lead to a projected global median temperature rise in 2100 of 1.7 °C.
- The Net Zero Emissions by 2050 (NZE) Scenario maps out a way to achieve a 1.5 °C stabilisation in the rise in global average temperatures, alongside universal access to modern energy by 2030. The NZE trajectory is consistent with limiting the temperature increase to less than 1.5 °C in 2100.
The STEPS is the first scenario based on prevailing policy settings that sees a definitive peak in global demand for fossil fuels. Coal use is predicted to fall by around 2025 and natural gas is expected to plateau by the end of the decade. The peak for oil demand is projected to take longer, and level off in the mid-2030s.
The WEO highlights that it is a mistaken idea that today’s crisis is a huge setback for efforts to tackle climate change. Despite the present upside for coal, the WEO reports that this is temporary, alleviating fears of a coal bounce back. Instead, the WEO identifies the opportunities that may arise out of the current energy crisis. It estimates that the bulk of additional investment in 2022 is being drawn towards clean energy – clean technologies remain the most cost‐efficient option for new power generation in many countries, aligning economic, climate and security priorities.
“Faster clean energy transitions would have helped to moderate the impact of this crisis, and they represent the best way out of it.”
IEA World Energy Outlook 2021
The NZE Scenario will require a tripling in spending on clean energy and infrastructure to 2030, and an increased investment in emerging market and developing economies. The WEO notes that, despite mostly discouraging developments, the pathway detailed in the NZE remains “narrow but still achievable”. The key priority measures to close the gap with the NZE include:
- a rapid expansion of clean electricity generation
- energy efficiency improvements and electrification of end‐uses
- widespread implementation of more stringent efficiency standards and policies encouraging fuel switching to generate reductions in the industry sector
- enhanced public support for innovation so that key technologies can be developed and deployed at scale
a steep fall in other energy‐related greenhouse gases such as methane emissions
- supportive policies not just in leading markets, but across the world.
A huge increase in clean energy investment is required for the NZE Scenario – USD 1.3tr was invested in 2021, but USD 4tr per year is required. This sets the scene for the scale of international ambition that will be required at COP27 to facilitate the transition.
For more insights on what to expect from COP27, read our blog: COP27 – setting the scene.