The world is rapidly moving towards the "electric age."

The International Energy Agency's (IEA) World Energy Outlook (WEO), considered the most authoritative global source for energy analysis and projections, has released its report for this year. The report examines the impacts of increasing geopolitical uncertainties, new technologies, the clean energy transition, and climate change on energy security, emphasizing that current geopolitical tensions pose significant risks to global efforts to enhance energy security and reduce greenhouse gas emissions.

According to the report, geopolitical tensions reveal vulnerabilities in the global energy system, indicating a need for a faster transition to clean energy.

RENEWABLE ENERGY WILL ATTRACT MORE ATTENTION

ANOTHER JAPAN IS ADDED TO WORLD ELECTRICITY DEMAND EVERY YEAR

Despite the unprecedented growth of clean energy technologies, the distribution of this growth shows wide disparities among technologies and markets. In the last decade, global electricity demand has grown at twice the rate of energy demand. In this context, where an increase equivalent to Japan's demand is seen in global electricity demand every year, "the lines of a new and more electric energy system" are becoming clearer. For clean energy to continue to grow rapidly and meet the increasing demand with these resources, investments, especially in electricity grids and storage, need to increase rapidly. For the electricity sector to decarbonize safely, renewable energy investments must progress at an equal pace with grid and battery investments. According to the IEA, despite the increasing momentum in the clean energy transition, the world is still far from a path consistent with net-zero emission targets. Current policies will allow global carbon dioxide emissions to peak soon and then decline, but if this decline is not sharp, there is a risk that global temperature rise could exceed 2.4 degrees above pre-industrial averages by 2100. This is above the goal of limiting global temperature rise to 1.5 degrees in the Paris Agreement.

"THE ELECTRICITY AGE WILL DEFINE THE FUTURE GLOBAL ENERGY SYSTEM"

IEA President Fatih Birol, in his assessment of the report, stated that depending on how geopolitical tensions develop by 2025, a very different energy world could emerge with the possibility of higher oil and natural gas supplies.

Birol continued: This means downward pressure on prices and provides some relief to consumers who are severely affected by price increases. This breathing space resulting from price pressures could provide policymakers with the opportunity to focus on increasing investments in clean energy transition and removing inefficient fossil fuel subsidies. This means that government policies and consumer preferences will have significant implications for the future of the energy sector and the fight against climate change. " In previous WEO reports, we stated that the future of the global energy system is based on electricity," Birol recalled, "Now this has become visible to everyone. We have seen the coal age and the oil age in our energy history. Now we are rapidly moving towards the electricity age. This age will define the future global energy system and will increasingly be based on clean electricity sources." He emphasized that, as with many global energy trends, China is a significant part of this trend, stating that "almost every energy story has a Chinese story at its core," including investment, fossil fuel demand, electricity consumption, renewable energy, electric vehicles, and clean technologies.

"WE WILL CARE ABOUT THE PRICE OF ELECTRICITY PER KILOWATT-HOUR, NOT THE PRICE OF GASOLINE"

IEA Chief Energy Economist and lead author of the WEO, Tim Gould, stated that the risks affecting traditional oil and gas supply remain critical for energy security and that gas and oil producers in the Middle East are significant for global supply due to the escalating conflict in the region. In addition to these traditional elements, Gould noted that issues in the electricity sector, including the security and resilience of clean energy supply chains, including critical minerals, are part of energy security, stating: An increasing portion of our additional energy needs is being met solely by electricity. We are adding a new Japan equivalent to global electricity demand every year. The reason for this is that electricity is at the center of our modern lives, and some of our needs that we previously met with fossil fuels are now being met with electricity. Additionally, we are seeing an increase in electricity demand from data centers, partly related to the growing use of artificial intelligence."

"THE FUTURE WILL BE THE ELECTRICITY AGE"

Gould, referring to all these developments, stated that an energy system centered around electricity is emerging, and he continued: Therefore, we are talking about a new electricity age as a defining feature of the future energy system. This electricity should also be produced from clean energy technologies to help us reduce emissions. As consumers, I believe our main relationship with the energy system in the coming period will be our electricity bill. When we look at the energy system, the numbers we will care about the most will not be how much oil is sold per barrel or what the price of gasoline is at the gas station, but how much we pay per kilowatt-hour for electricity at home. This will be the most important number for consumers to be aware of."

"ELECTRICITY IS STARTING TO CHALLENGE OIL IN THE TRANSPORT SECTOR"

Gould reported that electrification is currently progressing fastest in the building sector, while the least progress is seen in the transport sector. He pointed out that oil consumption remains very high in the transport sector, stating, "However, we are seeing that electricity is starting to challenge oil. There is a very striking indicator of this in China. Recent data shows that half of all new vehicle sales in China are electric. This represents a significant change compared to China's situation just a few years ago, and this is already starting to impact oil markets.

" he stated. On the other hand, Gould emphasized that different sets of technologies are needed to accelerate electrification in sectors such as iron, steel, aluminum, and cement, and that the grid and storage infrastructure also need to develop rapidly.