The global energy sector has experienced fundamental transformations over the last decade. These transformations have been shaped by global challenges such as combating climate change, security of energy supply and the need to accelerate the transition to clean energy. The 2024 World Energy Outlook (WEO) takes this transformation and examines changes in energy demand, the rise of renewables and the declining role of fossil fuels.[i]
Energy security has become an increasingly important issue in global energy markets in recent years. Geopolitical tensions have increased risks to oil and natural gas supply, especially in the Middle East. The IEA’s 2024 report emphasizes the strategic importance of oil and LNG shipments, especially through the Strait of Hormuz, on global energy supply. In 2023, energy markets rebalanced with the decline in natural gas prices, but this balance was reported to be fragile.[ii]
By 2030, global production capacity of crude oil is expected to reach 8 million barrels per day. LNG production capacity is predicted to increase by 50%. This increase will provide a significant relief on energy supply security. However, ensuring energy security will be possible not only through supply increases, but also through the widespread use of clean energy resources and increased energy efficiency. At this point, the rapid development and implementation of clean energy technologies will play a critical role in sustaining energy supply security.
The 2024 report clearly demonstrates the declining role of fossil fuels in the global energy system. By 2023, fossil fuels met 80% of global energy demand. However, the rapid increase in renewable energy sources indicates that this ratio will decrease by 2030. Solar and wind energy in particular are rapidly increasing their share in electricity generation. By 2035, the share of renewables in global electricity generation will exceed 40%, while the share of fossil fuels will fall to a 50-year low.[iii]
This transition process will be further accelerated by the deceleration in energy demand and the rapid growth in electricity demand. While global energy demand will increase by 0.7% annually between 2023 and 2030, the growth in electricity demand will exceed this rate. The proliferation of electric vehicles and the increase in demand in data centers are the key dynamics of this process. By 2050, 60% of electricity demand is projected to be met by renewable energy sources.[iv]
The 2024 World Energy Outlook makes it clear that the transition to clean energy in the global energy system needs to be accelerated. This process will increase energy security, reduce the environmental impacts of fossil fuels and make a significant contribution to the challenge of climate change. However, this transition requires strong policies, global cooperation and private sector investments. In particular, supporting energy efficiency, clean energy technologies and innovations is essential for a sustainable energy future.
Transformations in the global energy system provide great opportunities but also considerable challenges. The IEA’s 2024 report plays a critical role in setting the direction of these transformations and providing guidance for policymakers. Accelerating the transition to clean energy is crucial for energy security and achieving global climate goals.
One of the biggest challenges of energy security is geopolitical tensions affecting energy supply chains. Fossil fuels such as oil and natural gas are concentrated in certain regions around the world, and instability in these regions threatens global security of supply. In particular, political uncertainties in the Middle East can seriously affect the shipment of energy resources. For example, oil and LNG transportation through the Strait of Hormuz accounts for 20% of global supply, and any conflict or disruption in this region can lead to dramatic price fluctuations in energy markets.
While the transition to clean energy offers significant opportunities for global energy security, it also carries some risks. Although renewable energy sources are more stable and environmentally friendly than fossil fuels, their integration can be challenging due to infrastructure deficiencies and limitations in storage technologies. For example, seasonal and weather-related variability in solar and wind energy generation can put energy security at risk. Therefore, the development of energy storage technologies and the adaptation of electricity grids to renewable sources play a key role in the transition process.[v]
Climate change is another major factor threatening energy security. Extreme weather conditions can damage energy generation infrastructure and disrupt the supply-demand balance. Water-based power generation facilities such as hydroelectric, nuclear and coal plants are particularly vulnerable to climatic events such as water scarcity and drought. For example, the drought in Europe in 2022 affected many hydroelectric power plants, reducing energy production and causing energy prices to rise.[vi] In addition, it is only a matter of time before this effect is increasingly seen in Turkey. Energy economy models in Europe show flexibility in the face of potential crises and protect consumers with mechanisms to ease the burden of residential consumption.
Sea level rise is another climatic challenge that threatens energy infrastructure. Power generation facilities located in the coastal regions may be exposed to the risk of more frequent extreme weather events and flooding due to climate change. This situation creates additional costs and challenges in terms of protecting infrastructure and maintaining security of energy supply.[vii]
Solutions to ensure energy security include minimizing geopolitical risks, expanding renewable energy technologies and increasing the durability of energy infrastructure against climate change. First, diversifying energy supply is one of the most effective ways to protect against geopolitical risks. Europe’s efforts to reduce its dependence on Russia is an important example in this area. Increasing LNG imports is seen as a way to diversify energy supply sources.
Second, the adoption of energy efficiency policies is an effective way to increase energy security on the demand side. Energy efficiency eases pressure on supply by reducing energy consumption and reduces dependence on fossil fuels. Finally, the development of energy storage technologies will increase the reliability of renewable energy sources and contribute to energy security. The implementation of smart technologies in electricity grids can strengthen energy supply security by optimizing the supply-demand balance.[viii]
[i] International Energy Agency (IEA). (2024). World Energy Outlook 2024, https://www.iea.org/reports/world-energy-outlook-2024, (Date of Access: 19.10.2024).
[ii] Ibid.
[iii] Ibid.
[iv] Ibid.
[v] International Renewable Energy Agency (IRENA). (2021). World Energy Transitions Outlook: 1.5°C Pathway. IRENA, https://www.irena.org/publications/2021/Jun/World-Energy-Transitions-Outlook, (Date of Access: 19.10.2024).
[vi] Intergovernmental Panel on Climate Change (IPCC). (2022). Sixth Assessment Report. IPCC. https://www.ipcc.ch/report/ar6/wg2/, (Date of Access: 19.10.2024).
[vii] Ibid.
[viii] World Bank. (2020). Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099052423172525564/p16627806f5aa400508f8c0bdcba0878a3e, (Date of Access: 19.10.2024).
