Predictions are hard. Especially about the future. – variously attributed to either Physicist Neils Bohr or baseball player Yogi Berra
Oil and gas demand could continue to grow until the middle of the century, according to a new International Energy Agency scenario that shifts away from previous expectations of so-called peak oil demand because of slower adoption of green technologies.
The Paris-based agency, which represents oil-consuming nations, said that under this scenario, demand for oil and natural gas would continue to grow to 2050, while coal goes into a decline before the end of this decade.
The agency includes multiple scenarios in its annual report, which often serve as an influential baseline for governments and companies when mapping out energy policy and investment.
Hannah Ritchie in Sustainability by the Numbers:
Take a look at the headline clippings (above) (from the Financial Times, Wall Street Journal, Offshore Technology, and Telegraph India). There were many more.
These refer to the International Energy Agency’s newly published “World Energy Outlook 2025”. In this report, the IEA projects the evolution of global energy demand — and individual sources — in the coming decades under a number of scenarios (as we’ll see, this emphasis is important).
One of these, which was retired for a few years but has made a comeback, is the “Current Policies Scenario” (CPS). That’s the one that all of the headlines are referring to.
Before we get into what this scenario actually entails — and think about whether it’s likely — it’s worth clarifying what the IEA means, or does not mean, by it. It is very clear in its report that:
“The CPS is not a forecast or a prediction of the way the energy system will unfold. Nor should it be interpreted as a “business-as-usual” scenario.”
Again, it is a scenario. It is not a forecast or a prediction. So at least half of the headlines above are immediately incorrect. It might seem like I’m being pedantic on terminology (as are the IEA, since they dedicate entire articles trying to clarify this), but these distinctions matter.
A scenario is basically a “what if” story. It makes a bunch of assumptions, and asks what the outcome will be — in terms of energy supplies, or CO2 emissions — if those hold true. They’re useful in exploring what the future would look like if the world did x or y.
You be the judge. Take a look at the chart below, which shows the share of new cars that are electric in countries outside of the EU and China. Now imagine that those curves suddenly level off and never rise again. That’s what the CPS assumes.
I can’t tell you the pace of the global EV rollout. I also think that many countries will have temporary stalls in their EV sales for various reasons. Maybe we’ll see that in the US in the next few years. But given the historical rates of growth, the fact that electric cars continue to get better and cheaper, and national motivations to be free from the ups and downs of global oil markets, it seems implausible to me that all of these curves suddenly and permanently level off.
Moving from transport to the electricity grid, another interesting assumption in the Current Policies Scenario is that solar photovoltaic (PV) deployment stalls at its 2024 levels for more than a decade.
As it states:
“Solar PV and wind continue to expand, but they face mounting integration challenges in the CPS in the absence of additional government policies, which slow their deployment. Annual solar PV capacity additions average 540 GW to 2035, holding steady at roughly the 2024 level, and halting the trend that has seen deployment rise ten-fold from 2015 to 2024.”
To provide some context for what this looks like, I’ve plotted the IEA’s historical data on solar PV deployment (in red) and added a line that shows future deployments stalling at 540 GW through to 2035.
Does this trend also seem reasonable?
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Texas Energy and Power Newsletter:
Today, the world installs 230–240 gigawatts of solar every six months. That’s two massive coal plants’ worth of clean energy every single day.
This isn’t fringe. This isn’t boutique. It’s mainstream power.
Think Costco, not Whole Foods. Bulk, cheap, ready-to-go.
The shift is happening everywhere.
- In Pakistan, rooftop solar grew so fast that in just 8 months, citizens built the equivalent of half their national grid. Farmers led the way, cutting diesel use by 35 percent in a single year.
- In Texas, oil and gas operators in the Permian are connecting to the grid or tapping wind and solar because it is cheaper than running diesel generators.
When energy is more affordable, more reliable, and easier to deploy, people adopt it. That is true from Karachi to the Concho Valley.
UPDATE: This article on the same IEA report from the Guardian includes key context.
Renewables will grow faster than any major energy source in the next decade, according to the world’s energy watchdog, making the transition away from fossil fuels “inevitable”, despite a green backlash in the US and parts of Europe.
The world is expected to build more renewable energy projects in the next five years than has been rolled out over the last 40, according to the flagship annual report from the International Energy Agency (IEA).
The report shows that this increase in renewable energy could meet nearly all the world’s growing appetite for electricity, which is on track to rise by 40% over the next decade, fuelled by the growing demand for electric cars, heating, cooling and to power AI datacentres.
The rise in low-carbon electricity is expected to seal the transition away from the fossil fuel era, despite calls from the Trump administration to retreat from green investments in favour of drilling for oil and gas.
David Tong, a campaigner at Oil Change International, said the IEA’s report had confirmed that “no single country can stop the energy transition”. He called on world leaders gathered at Belém in Brazil for the UN’s Cop30 climate talks to reject “Donald Trump’s dystopian future” in favour of a “fast, fair, and funded fossil fuel phase-out”.
The IEA’s findings are expected to embolden leaders who plan to use the Cop30 talks to push for progress on reaching the global target to triple renewable energy by 2030 and transition away from fossil fuels, agreed to at Cop28 in Dubai.
The Paris-based agency has reportedly come under pressure from US Republicans to use its flagship report to present a more positive future for the fossil fuel industry than in previous forecasts. In response, the IEA reintroduced a scenario from previous reports that offers “a cautious perspective” on the speed of the energy transition.
Dave Jones, the chief analyst of Ember, a thinktank, said this scenario’s assumptions appeared to underestimate the rollout of electric vehicles (EVs), leading to higher forecasts for the consumption of oil than in the IEA’s central scenario. However, a rapid expansion of renewables was “inevitable”, he added.
One of the hurricane “models” that gets included in some ensembles has the hurricane continuing in the same direct with the same speed as the model run time (by design). All of the rest have the cyclone curving off and speeding or slowing, but only the gods know why they include the Clueless One. I see the CPS scenario as similarly stupid.