At the offices of the Centre for Global Energy Studies (CGES) at 17 Knightsbridge, London, UK, which I had the honour of visiting several times, the veteran Saudi oil minister, the late Sheikh Ahmed Zaki Yamani, once made a blunt statement: “Coal didn’t end, the coal era came to an end.” Looking into the future, he often prophesied: “Oil will not end; the oil era will come to an end.”
His words were especially prophetic, considering they were spoken during a time when the concept of Peak Oil was widely discussed.
Decades later, Fatih Birol, the Executive Director of the International Energy Agency (IEA), echoed similar thoughts. While unveiling the highly anticipated World Energy Outlook 2024, Birol said: “In energy history, we’ve seen the Age of Coal and the Age of Oil, and we’re now moving rapidly into the Age of Electricity.”
“In previous editions of the World Energy Outlook, the IEA had made clear that the future of the global energy system is electric – and now that reality is becoming visible to everyone,” Birol added.
Despite oil producers disputing this claim, the IEA maintains that global demand for fossil fuels will peak by the end of this decade due to the ongoing energy transition. This could lead to surplus oil and gas supplies, driving more investment into green energy and putting downward pressure on fossil fuel market prices.
“In the second half of this decade, the prospect of more ample – or even surplus – supplies of oil and natural gas, depending on how geopolitical tensions evolve, would move us into a very different energy world,” Birol said at the release of World Energy Outlook 2024 on Oct. 16.
He added that surplus fossil fuel supplies would likely lead to lower prices, allowing countries to allocate more resources to clean energy, helping to propel the world into the “Age of Electricity.”
The transition is unmistakable. The IEA reported that a record amount of clean energy came online globally last year, including over 560 gigawatts (GW) of renewable power capacity. 2024 around $2 trillion is expected to be invested in clean energy, nearly double the amount invested in fossil fuels. According to the World Energy Outlook 2024, the costs of most clean technologies are once again decreasing after temporary rises in the aftermath of the COVID-19 pandemic.
Renewable power generation capacity is projected to increase from 4,250 GW today to nearly 10,000 GW by 2030 under the current policy scenario. While this falls short of the target set at COP 28 – three times the current renewable output – it is still sufficient to meet rising global electricity demand and reduce coal-fired generation. Combined with nuclear power, which is experiencing renewed interest in many countries, low-emission energy sources are expected to generate more than half of the world’s electricity by 2030.
Nuclear power is one of seven key clean energy technologies crucial for a secure and affordable energy transition. However, overcoming obstacles to its deployment, such as upgrading network infrastructure, must become a global priority. According to World Energy Outlook 2024, the share of nuclear power is expected to remain around 10 percent across the three main long-term scenarios outlined in the report.
Electricity consumption has grown at twice the rate of overall energy demand over the past decade, with China contributing to two-thirds of the global increase in electricity demand during this time. This shift is a key driver of the global energy transition. For decades, China was a major driver of growth in the oil market, but its focus is now moving toward electricity as a primary energy source. According to the International Energy Agency (IEA), under the current policy scenario, China’s oil consumption for road transport is expected to decline as the country transitions to electric vehicles and cleaner energy sources. However, despite these advancements, fossil fuels – primarily coal – still account for around 65 percent of China’s electricity generation, reflecting its ongoing reliance on coal.
China was responsible for 60 percent of the new renewable energy capacity added worldwide in 2023. By 2030, World Energy Outlook 2024 projects that China’s solar PV generation will exceed the total electricity demand of the United States today. However, the decline in Chinese fossil fuel consumption, particularly for road transport, will be partially offset by a significant increase in oil use as a petrochemical feedstock.
Cost-competitive electric vehicles (EVs), many produced by Chinese manufacturers, are rapidly entering various markets, though uncertainty remains about how quickly their market share will grow. Currently, EVs account for around 20 percent of global new car sales, with projections indicating this could rise to 50 percent by 2030 in the current policy scenario. In China, EV sales are already expected to reach the 50 percent mark this year. By 2050, the shift to EVs is anticipated to reduce oil demand by around six million barrels per day (bpd).
Nonetheless, challenges remain regarding how quickly and efficiently new renewable energy capacity can be integrated into power systems, and whether grid expansions and permitting processes will keep pace with the growing demand for electricity. In many developing economies, policy uncertainty and high capital costs continue to hinder clean energy projects.
The contours of a new, electrified energy system are becoming clearer as global electricity demand surges. According to World Energy Outlook 2024, electricity demand is expected to grow even faster in the coming years, adding the equivalent of Japan’s entire electricity demand to global usage each year under the current policy scenario. This growth will accelerate even further under scenarios that aim to achieve national and global net-zero goals. The increase in demand is largely driven by sectors such as light industry, electric vehicles, cooling systems, data centers, and artificial intelligence (AI).
Despite this progress, the growth of renewable energy faces challenges. Currently, for every dollar spent on renewable power, 60 cents are invested in grid and storage infrastructure. By the 2040s, spending in these areas is expected to reach parity across all scenarios. However, many power systems remain vulnerable to extreme weather events and cyberattacks, highlighting the need for substantial investments in resilience and digital security.
One final note:
It’s important to remember that fossil fuels currently produce about 60 percent of the world’s electricity. Here’s a clearer breakdown:
- Fossil Fuels (Coal, Natural Gas, Oil): Around 60 percent
- Coal: 35 to 36 percent
- Natural Gas: 23 to 24 percent
- Oil: Less than three percent
- Renewable Energy: Around 30 percent
- Hydropower: 16 percent
- Wind: 7 to 8 percent
- Solar: 4 to 5 percent
- Biomass and Others: Around two percent
- Nuclear Energy: Around 10 percent
Toronto-based Rashid Husain Syed is a highly-regarded analyst specializing in energy and politics, with a particular emphasis on the Middle East. Besides his contributions to both local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.
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