The world is projected to reach peak oil by 2030 if countries adhere to their “stated policies,” as reported by the International Energy Agency (IEA). However, the emissions outlook has worsened, largely due to shifts in U.S. climate policy under President Donald Trump, affecting growth forecasts for renewable energy and electric vehicles.
The IEA’s annual World Energy Outlook models various energy trends and global emissions based on different scenarios, including one reflecting “stated policies,” which predicts future actions against climate change.
Last year, the IEA anticipated renewable growth, pushing coal, oil, and natural gas past demand peaks by 2030. This year’s report still sees oil peaking around 2030 but declining at a slower pace. Coal’s peak is linked to reduced use in China’s power sector. Notably, the IEA now projects gas demand to peak in 2035, instead of 2030, due to U.S. policy changes and lower gas prices.
Despite setbacks in fossil fuels, renewables are set to grow faster than any other energy source over the next decade, driven by solar power. “It’s clear renewables are taking over,” stated Dave Jones, an electricity analyst at the think tank Ember. He noted the “stated policies” scenario predicts the power system doubling its renewables capacity by 2035.
The report highlights a 40% increase in electricity demand by 2035, fueled by air conditioners, advanced manufacturing, electric vehicles, and data centers. The latter is expected to account for under 10% of this growth, with 85% concentrated in the U.S., China, and the EU.
IEA Executive Director Fatih Birol stated in a statement that global investment in data centers will hit $580 billion by 2025, surpassing oil supply spending. This increase in electricity demand raises questions about future energy generation methods.
The report revises U.S. renewable growth projections for 2035 down by 30% under the “stated policies” scenario, with electric vehicle projections also lowered for advanced economies. Globally, renewables continue rapid expansion, with China as the largest market, accounting for 40-60% of global deployment over the next decade. Nuclear power is expected to rise by at least a third by 2035.
The report comes as countries meet in Belém, Brazil, for COP30, the UN’s annual climate talks. UN Secretary-General António Guterres noted that countries might miss the Paris Agreement’s 1.5-degree Celsius target. In the IEA’s “stated policies” scenario, the world could warm by 2.5 degrees by 2100, up from last year’s 2.4-degree estimate.
The IEA reintroduced a “current policy” scenario, dropped in 2020, assuming no new clean energy policies are adopted. Despite political pressure from the Trump administration, the IEA included this scenario, considering it essential to evaluate. Under this scenario, renewables meet the largest portion of energy demand growth, but oil and gas demand grows through 2050, and the world warms by 2.9 degrees Celsius by 2100.
Jones from Ember criticized the “current policy” scenario as unlikely, given the rapid rise in electric vehicle sales in emerging markets. The IEA report authors emphasized that neither scenario is a forecast, with the “current policies” scenario reflecting slower technology adoption.
A third net zero emissions scenario outlines a path to net zero emissions by 2050, requiring a rapid increase in renewable energy. A new scenario aims for universal electricity access by 2035 and clean cooking by 2040. A future scenario modeling countries’ UN climate targets is expected later this year, pending full commitment data from countries.
Original Story at insideclimatenews.org