The “age of electricity” is accelerating, with a rising share of low-emission power; grids and energy storage are becoming key levers to unlock the benefits of the energy transition.
In a volatile world, energy security takes centre stage
Pressing threats and longer term hazards are elevating energy to a core issue of economic and national security. Energy is at the heart of today’s geopolitical tensions, with traditional risks to fuel supply now accompanied by restrictions affecting supplies of critical minerals. The electricity sector – so essential to modern economies – is also increasingly vulnerable to cyber, operational and weather-related hazards. Decisions taken by energy policy makers will be crucial to address these risks, but they do so against a complex backdrop:
- Geopolitical fragility coexists with subdued oil prices. Ongoing conflicts and instability sit alongside oil market balances showing a large surplus of supply over demand.
- Countries are prioritising energy security and affordability but are reaching for different levers to achieve them. Some, including many fuel-importing countries, lean towards renewables and efficiency as solutions. Others focus more on ensuring ample supplies of traditional fuels.
- There are fractures in the international system and uncertainties over the outlook for trade, but energy trade is more important than ever. Abundant supplies of oil, solar panels, batteries and, before long, liquefied natural gas (LNG) create strong incentives for producers to seek out international markets.
- There is less momentum than before behind national and international efforts to reduce emissions, yet climate risks are rising. 2024 was the hottest year on record and the first in which global temperatures exceeded 1.5 degrees Celsius (°C) above pre- industrial levels.
At the same time, the world remains thirsty for energy. New technologies are entering the system at speed, and renewables set new records for deployment in 2024 for the 23rd consecutive year. Oil, natural gas and coal consumption, and nuclear output, all reached record highs as well. Driven mainly by China, since 2019 demand for coal has grown 50% faster than the next fastest growing fossil fuel, natural gas, a key reason why energy-related emissions have continued to grow. There is no single storyline about the future of energy, which is why the World Energy
Outlook presents multiple scenarios, none of which is a forecast. The framework presented in this Outlook is based on the latest and most comprehensive data on policies, technologies and markets, together with rigorous modelling. This allows readers to explore the implications of different choices and pathways.
Read the full report “IEA World Energy Outlook 2025” (PDF)
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