WEO 2021

World Energy Outlook 2021

The World Energy Outlook 2021, the latest edition of the International Energy Agency (EIA) annual flagship publication, has been released – a month earlier than usual – and intended as a handbook for COP26 just beginning in Glasgow, UK.

The World Energy Outlook (WEO) is generally recognised as the energy world’s most authoritative source of analysis and projections, and has appeared every year since 1998. Its objective data and dispassionate analysis provide critical insights into global energy supply and demand in different scenarios and the implications for energy security, climate targets and economic development.

An introduction to the report records that In 2020, even while economies bent under the weight of Covid-19 lockdowns, renewable sources of energy such as wind and solar PV continued to grow rapidly, and electric vehicles set new sales records. The new energy economy will be more electrified, efficient, interconnected and clean. Its emergence is the product of a virtuous circle of policy action and technology innovation, and its momentum is now sustained by lower costs. In most markets, solar PV or wind now represents the cheapest available source of new electricity generation. Clean energy technology is becoming a major new area for investment and employment – and a dynamic arena for international collaboration and competition.

At the moment, however, every data point showing the speed of change in energy can be countered by another showing the stubbornness of the status quo. The rapid but uneven economic recovery from last year’s Covid-induced recession is putting major strains on parts of today’s energy system, sparking sharp price rises in natural gas, coal and electricity markets. For all the advances being made by renewables and electric mobility, 2021 is seeing a large rebound in coal and oil use. Largely for this reason, it is also seeing the second-largest annual increase in CO2 emissions in history. Public spending on sustainable energy in economic recovery packages has only mobilised around one-third of the investment required to jolt the energy system onto a new set of rails, with the largest shortfall in developing economies that continue to face a pressing public health crisis. Progress towards universal energy access has stalled, especially in sub-Saharan Africa.

The direction of travel is a long way from alignment with the IEA’s Net Zero Emissions by 2050 scenario published in May 2021, which charts a narrow but achievable roadmap to a 1.5°C stabilisation in rising global temperatures and the achievement of other energy-related sustainable development goals.

Pressures on the energy system are not going to relent in the coming decades. The energy sector is responsible for almost three-quarters of the emissions that have already pushed global average temperatures 1.1°C higher since the pre-industrial age, with visible impacts on weather and climate extremes. The energy sector has to be at the heart of the solution to climate change.

At the same time, modern energy is inseparable from the livelihoods and aspirations of a global population that is set to grow by some 2 billion people to 2050, with rising incomes pushing up demand for energy services, and many developing economies navigating what has historically been an energy- and emissions-intensive period of urbanisation and industrialisation. Today’s energy system is not capable of meeting these challenges; a low emissions revolution is long overdue.

The full World Energy Outlook report can be downloaded from the EIA website here: WEO 2021 download