Report: World Energy Outlook 2023 - Fragile Energy World

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(www.MaritimeCyprus.com) The World Energy Outlook 2023 provides in-depth analysis and strategic insights into every aspect of the global energy system. Against a backdrop of geopolitical tensions and fragile energy markets, this year’s report explores how structural shifts in economies and in energy use are shifting the way that the world meets rising demand for energy.

This Outlook assesses the evolving nature of energy security fifty years after the foundation of the IEA. It also examines what needs to happen at the COP28 climate conference in Dubai to keep the door open for the 1.5 °C goal. And, as it does every year, the Outlook examines the implications of today's energy trends in key areas including investment, trade flows, electrification and energy access.

This flagship publication of the International Energy Agency is the energy world’s most authoritative source of analysis and projections. Published each 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 change goals and economic development.

The energy world remains fragile but has effective ways to improve energy security and tackle emissions.

Some of the immediate pressures from the global energy crisis have eased, but energy markets, geopolitics, and the global economy are unsettled and the risk of further disruption is ever-present. Fossil fuel prices are down from their 2022 peaks, but markets are tense and volatile. Continued fighting in Ukraine, more than a year after Russia’s invasion, is now accompanied by the risk of protracted conflict in the Middle East. The macroeconomic mood is downbeat, with stubborn inflation, higher borrowing costs and elevated debt levels.

Today, the global average surface temperature is already around 1.2 °C above pre-industrial levels, prompting heatwaves and other extreme weather events, and greenhouse gas emissions have not yet peaked. The energy sector is also the primary cause of the polluted air that more than 90% of the world’s population is forced to breathe, linked to more than 6 million premature deaths a year. Positive trends on improving access to electricity and clean cooking have slowed or even reversed in some countries.

Against this complex backdrop, the emergence of a new clean energy economy, led by solar PV and electric vehicles (EVs), provides hope for the way forward. Investment in clean energy has risen by 40% since 2020. The push to bring down emissions is a key reason, but not the only one. The economic case for mature clean energy technologies is strong.

Energy security is also an important factor, particularly in fuel-importing countries, as are industrial strategies and the desire to create clean energy jobs. Not all clean technologies are thriving and some supply chains, notably for wind, are under pressure, but there are striking examples of an accelerating pace of change. In 2020, one in 25 cars sold was electric; in 2023, this is now one in 5. More than 500 gigawatts (GW) of renewables generation capacity are set to be added in 2023 – a new record. More than USD 1 billion a day is being spent on solar deployment. Manufacturing capacity for key components of a clean energy system, including solar PV modules and EV batteries, is expanding fast. This momentum is why the IEA recently concluded, in its updated Net Zero Roadmap, that a pathway to limiting global warming to 1.5 °C is very difficult – but remains open.

This new Outlook provides a strong evidence base to guide the choices that face energy decision-makers in pursuit of transitions that are rapid, secure, affordable and inclusive. The analysis does not present a single view of the future but instead explores different scenarios that reflect current real-world conditions and starting points. The Stated Policies Scenario (STEPS) provides an outlook based on the latest policy settings, including energy, climate and related industrial policies. The Announced Pledges Scenario (APS) assumes all national energy and climate targets made by governments are met in full and on time. Yet, much additional progress is still required to meet the objectives of the Net Zero Emissions by 2050 (NZE) Scenario which limits global warming to 1.5 °C. Alongside our main scenarios, we explore some key uncertainties that could affect future trends, including structural changes in China’s economy and the pace of global deployment of solar PV.

 

For more details, click below image to download the full report:

Source: IEA

 

 

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