The World Energy Outlook 2024 report, published by the International Energy Agency (IEA), presents a comprehensive assessment of the evolving global energy landscape. This year’s analysis emphasizes several critical themes, including the ongoing clean energy transition, the surge in global energy demand, and the rising geopolitical risks that threaten energy security. The report underscores India’s pivotal role in the global energy system, drawing attention to its increasing energy needs, continued dependence on coal, and its ambitious plan to achieve net zero emissions by 2070.
The Evolution and Purpose of the International Energy Agency (IEA)
The International Energy Agency (IEA) was founded in 1974 by member countries of the Organisation for Economic Co-operation and Development (OECD) in response to the global oil crisis of 1973-1974. The primary objective was to assist industrialized countries in managing the energy supply disruptions caused by the crisis. However, over the decades, the IEA has grown in both scope and influence, transforming into a key player in the global energy sector. Its mission has evolved beyond crisis management to encompass a wide range of issues, including energy security, economic growth, and clean energy transitions.
The IEA serves as an autonomous platform that provides critical analysis, data, and policy recommendations to governments, helping them build secure, sustainable, and affordable energy systems. Its work centers around four main pillars: energy security, ensuring that countries have access to reliable energy; economic development, supporting the growth and prosperity of economies through efficient energy use; environmental sustainability, promoting clean and renewable energy to mitigate the impacts of climate change; and global engagement, fostering international cooperation to address shared energy challenges.
Headquartered in Paris, France, the IEA operates as a collaborative forum where countries work together to develop long-term solutions for global energy issues. This has made the agency a key advisor in shaping energy policies across the world, especially in times of geopolitical instability and rising environmental concerns.
Membership and Global Influence
The IEA’s membership base consists of 31 full member countries, including major energy consumers such as the United States, Germany, and Japan. In addition, the agency has 13 association countries, including India, and 4 accession countries that are in the process of joining. To become a full member, a country must first be part of the OECD, reflecting the agency’s close ties with the world’s leading economies. However, the IEA has increasingly broadened its reach to engage with emerging economies and developing countries, recognizing that energy challenges are global in nature and require inclusive solutions.
The IEA has built a diverse platform that enables the sharing of best practices, technical expertise, and policy frameworks to address the pressing energy concerns of today’s world. The association status allows countries like India to benefit from the agency’s resources while contributing to its global dialogue on sustainable energy solutions.
IEA’s Major Publications
Over the years, the IEA has published a series of influential reports that shape global energy policies. The World Energy Outlook is its flagship publication, providing an annual review of the major trends in global energy markets. Other significant reports include the India Energy Outlook Report, which focuses specifically on India’s energy trajectory, and the World Energy Investment Report, which tracks global investments in energy infrastructure and technology. The IEA Technology Roadmap and Policy Pathway series offer guidance on implementing clean energy technologies, while the Annual Energy Efficiency Market Report assesses global progress in improving energy efficiency. The Energy Technology Perspectives publication provides a long-term view of the development of energy technologies and their impact on the future energy system.
Highlights of the World Energy Outlook 2024 Report
The World Energy Outlook 2024 highlights several key trends and challenges facing the global energy system. One of the major themes of the report is the impact of geopolitical tensions on energy security. Conflicts such as the ongoing Russia-Ukraine war and rising tensions in the Middle East are major threats to the stability of global energy supplies. The report notes that these conflicts have caused significant disruptions to the supply of oil and gas, particularly in Europe and other energy-importing regions.
Despite these challenges, the report also highlights the rapid progress being made in the transition to clean energy. In 2023, over 560 gigawatts (GW) of renewable energy capacity was added globally, with solar and wind power leading the charge. By 2030, renewable energy is expected to become the dominant source of electricity, surpassing traditional fossil fuels such as coal, oil, and gas. This shift is being driven by investments in solar photovoltaic (PV) and wind energy, along with low-emission energy sources like nuclear power. By the end of the decade, over 50% of the world’s electricity is projected to come from these low-emission sources.
Another significant trend identified in the report is the growing surplus in oil and gas markets. The second half of the 2020s is expected to see a surplus of oil and liquefied natural gas (LNG), which is likely to put downward pressure on prices. Meanwhile, the rise of electric mobility is changing the dynamics of global oil demand. By 2030, electric vehicles (EVs) are expected to account for 50% of new car sales, significantly reducing oil demand in the transportation sector.
The clean energy technology sector is also becoming highly competitive, with intense rivalry among suppliers of solar PV and battery storage technologies. This competition is expected to drive further innovation and cost reductions, making clean energy more accessible and affordable.
India’s Role in the Global Energy Transition
India plays a critical role in the World Energy Outlook 2024, as the country is set to experience the largest increase in energy demand over the next decade. With a 7.8% growth rate in 2023, India was the fastest-growing major economy, and it is on track to become the third-largest economy in the world by 2028. At the same time, India surpassed China as the most populous country, although its fertility rate has fallen below the replacement level.
India’s rapid economic growth and urbanization are driving a surge in energy demand, with total energy consumption expected to rise by nearly 35% by 2035. The country’s transportation, construction, and manufacturing sectors will be the main contributors to this increase. Despite its ambitious goals for expanding renewable energy, coal continues to play a vital role in India’s energy mix. By 2030, India is expected to add nearly 60 GW of new coal-fired capacity, and coal will still account for more than 30% of the country’s electricity generation.
In addition to the reliance on coal, India’s industrial sector is poised for significant expansion. Iron and steel production is projected to increase by 70%, while cement production is expected to grow by 55% by 2035. As a result, electricity demand for cooling is also set to skyrocket, with the stock of air conditioners projected to grow more than 4.5 times by 2035. The energy needed for air conditioning alone in 2035 will exceed Mexico’s total electricity consumption for that year.
Despite these challenges, India is making notable strides in expanding its renewable energy capacity. The country is on track to nearly triple its electricity generation to 1,400 GW by 2035. Furthermore, India is expected to have the world’s third-largest installed battery storage capacity by 2030, which will be crucial for integrating solar and wind power into the grid. These advancements will play a significant role in India’s efforts to reach its net zero emissions target by 2070.
Key Challenges and Way Forward
While the progress in clean energy is impressive, the World Energy Outlook 2024 also identifies several challenges. Geopolitical risks, such as the conflict in Ukraine, continue to disrupt energy supplies and pose a threat to global energy security. The concentration of clean energy technologies like solar panels and batteries in a few countries creates supply chain vulnerabilities that could hinder progress.
Additionally, the report highlights the high financing costs associated with renewable energy projects, especially in developing countries. The lack of sufficient grid infrastructure is another obstacle, as many countries do not have the capacity to fully utilize the growing supply of solar and wind power. Finally, the report notes that progress on energy efficiency is falling short of global targets, and the continued reliance on fossil fuels is slowing the transition to clean energy.
In light of these challenges, the report suggests several actions for the way forward. Governments need to increase clean energy investments, particularly in renewable energy and grid infrastructure. They must also work to diversify supply chains and improve financing for developing countries. Expanding and modernizing grid infrastructure is critical for fully integrating renewable energy into the energy system. Additionally, there is an urgent need to accelerate efforts to improve energy efficiency and strengthen the resilience of energy systems to the impacts of climate change.