IEA warns global energy systems at risk from climate change, conflict

Global energy systems face huge challenges from climate change and conflict, the International Energy Agency (IEA) warned on Wednesday, while commending the huge progress made in developing renewable energies.

Presenting its flagship World Energy Outlook, the Paris-based agency said the "escalating conflict in the Middle East and Russia's ongoing war in Ukraine underscore the continued energy security risks that the world faces."

While the effects of the global energy crisis appeared to wane in 2023, the conflicts are continuing to cause serious disruption to energy markets, while demonstrating "how quickly dependencies can turn into vulnerabilities."

The transition to clean energy is also highly dependent on raw materials and technologies concentrated in the hands of a small number of countries, the report warned.

The agency expects that more than half of the world's electricity will be generated from low-emission sources by 2030, and that demand for all three fossil fuels - coal, oil and gas - will peak by the end of the decade.

However, global demand for electricity is rising sharply, with consumption growing twice as fast as the overall demand for energy in the past 10 years. China has accounted for two-thirds of the global increase in electricity demand.

According to the IEA, high financing costs and project risks are also hindering the spread of cost-effective clean energy technologies in regions of the world where they are most urgently needed.

The report warned 750 million people - mainly in sub-Saharan Africa - still remain without access to electricity, while over 2 billion people have no access to clean fuels for cooking.

Meanwhile, new technologies such as artificial intelligence (AI) require enormous amounts of electricity, while more intense heatwaves are leaving many countries reliant on energy-intensive air-conditioning systems.

Despite the increasing momentum in the transition to clean energy, the world is still a long way from achieving climate neutrality, the agency said.

In the short term, an increased supply of oil and natural gas could lead to falling prices for consumers and more room for manoeuvre for governments to invest in clean energies.

But current scenarios forecast a 2.4-degree-Celsius rise in global average temperatures by the end of the century, far above the 1.5-degree target set by the Paris Agreement in 2016, the IEA said.

In many regions, this would entail major challenges to the operation of energy systems, with heatwaves, droughts, floods and storms all putting energy security at risk.