The annual publication of the IEA’s World Energy Outlook (WEO) is a flagship event for energy markets and policymakers, as well as for anyone working on emissions. Everyone reads and debates its insights and its data.
WEO 2025 has four scenarios: Net Zero Emissions by 2050 (NZE), Accelerating Clean Cooking and Electricity Services Scenario (ACCESS), Stated Policies Scenario (STEPS), and the Current Policies Scenario (CPS). NZE and ACCESS are normative. STEPS and CPS are exploratory. These differences and their rationale are clearly explained in the WEO team’s excellent pre-launch note about the scenarios.
Surprisingly, many media reports claimed that the CPS scenario is a baseline case, indicating that oil demand is set to continue growing indefinitely. This was a lazy storyline that completely missed the key insights from WEO 2025.
First, in our troubled world, each of the scenarios has an equal objective credibility. Certainly, none is a more convincing base case than the others.
Electricity demand will drive at least two-thirds of global energy demand in the next decade, up to 2035.
Second, the major news from WEO 2025 is the huge increase in global electricity demand, accompanied by the electrification of energy end-uses, in STEPS, ACCESS, and NZE. Electricity demand will drive at least two-thirds of global energy demand in the next decade, up to 2035. How we meet that electricity demand and how we utilise electricity will determine the achievability of climate goals, the affordability of energy, and economic competitiveness. In fact, oil use only grows if solar PV and electric vehicle (EV and hybrid) deployment slows. That would be the opposite of the trends we’ve seen over the last half-decade.
The NZE has bad/good news on climate goals. On the one hand, it overshoots 1.5°C. But on the other hand, the overshoot pathway remains well below 2°C, in line with the Paris Agreement’s upper threshold, which is essentially the upper limit for safe overshoot. It remains important to underline that “well below 2°C” is a hard ceiling, and that NZE only just scrapes under this.
However, the NZE pathway is a world which needs unprecedented international cooperation, including most countries opening their markets to clean energy (Chinese) technology and countries (China) not hogging critical minerals. NZE also requires an acceleration of technological learning through widespread transfers of intellectual property. Geopolitics and real-world engineering timelines may seem to make this unlikely.
The savings are greatest, of course, for energy-importing regions, namely, the majority of the global economy.
But the economic incentives for NZE are strong: this pathway is projected to cost <20% less than STEPS by 2035, primarily due to improved energy efficiency and money saved from purchasing less fossil fuels. The savings are greatest, of course, for energy-importing regions, namely, the majority of the global economy. This is not just a long-term win: savings by 2035 are highly relevant for today’s policymakers.
Achieving NZE would require the ongoing electrification of transport, heating, and industry. This results in higher grid loads everywhere, necessitating grid expansion, digitalisation, and resilience. Electric power system stability is a political “must-have,” and requires a focus on investment frameworks and policy markets for flexibility, redispatch, and congestion management. This opportunity and challenge, obviously, is greatest in the dynamically growing energy systems of emerging and developing economies. India’s power grid is the world’s largest synchronous system, and a crucible for investment, technology learning, and macroeconomic benefits.
Third, the IEA has introduced the important ACCESS scenario, which brings crucial depth to its analysis by mapping country-by-country pathways to universal access to modern energy services, including clean cooking by 2040. As the IEA emphasises, “ACCESS is grounded in practical constraints and solutions, examining what historical rates of progress have been achieved in the past”. It then prioritises cost-effective, proven means to replicate those successes, using all relevant fuels and technologies, and examines closely the policies and financing needed to scale these up.
India’s power grid is the world’s largest synchronous system, and a crucible for investment, technology learning, and macroeconomic benefits.
In contrast, STEPS is a world in which the US blocks the deployment of clean energy (Chinese) technology at home, but emerging economies use solar and other clean energy sources to meet their growing demand for electricity, and Europe continues to deploy and develop clean energy technologies, including EVs.
Gas is a swing factor and highly unpredictable in all four scenarios.
Professor Jesse Scott is a Senior Fellow at the Observer Research Foundation, as well as adjunct faculty at the Hertie School in Berlin since 2019.
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Professor Jesse Scott is a Senior Fellow at the Observer Research Foundation, as well as adjunct faculty at the Hertie School in Berlin since 2019. ...
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